Parents could see $5,500 boost to earned income tax credit under new Democratic measure

Rep. Kristen McDonald Rivet, D-Mich., said Wednesday she will introduce a new bill to expand the earned income tax credit to provide a credit of up to $5,500 per child to parents of young children.

The bill, shared exclusively with CNBC, is dubbed the "Working Parents Tax Relief Act" and would provide qualifying single or joint filers claiming the EITC an additional credit of up to $5,500 for up to three children under the age of four.

The bill would also increase the maximum qualifying income to claim the EITC to nearly $100,000 annually if the filer has children under the age of four, and it would require the Treasury Department to create a monthly payment system for the enhancement.

It comes as Democrats campaign across the country on a message of affordability, arguing that Republicans and President Donald Trump have failed to lower costs for Americans. Polls show Democrats have the upper hand in the 2026 midterm elections and could see Trump lose his majorities in the House of Representatives and Senate.

"Bringing home a baby is the most magical moment of a parent's life, but it is also the most expensive. Parents with toddlers today are working harder than ever, but still find it impossible to keep up with the out-of-control costs of housing, child care, groceries, and so much more," McDonald Rivet said. "We need to cut their taxes now. Our bill puts thousands of hard-earned dollars back in their pockets, helping parents keep up with their bills while raising their families."

The EITC is available to low- to moderate-income workers and families. In the 2024 tax year, the average EITC amount paid to individuals and families in the U.S. was $2,894, according to the Internal Revenue Service.

Congress has in the past enhanced tax credits. In 2021, the American Rescue Plan expanded the child tax credit from $2,000 to $3,000, or $3,600 per child. The boost cut child poverty nearly in half, but was allowed to lapse by Congress and never renewed, despite multiple attempts.

The House is Republican-controlled, so McDonald Rivet's bill has little chance of advancing. But bills like this provide the groundwork for Democratic messaging in an election year.

The new bill has support from groups such as moderate think tank Third Way and progressive coalition Americans for Tax Fairness.

"The Working Parents Tax Relief Act of 2026 would deliver real relief for working- and middle-class parents," said Zach Moller, senior director of Third Way's economic program.

While she was a member of the Michigan state Senate, McDonald Rivet helped pass a similar bill, which boosted Michigan's match of the EITC from 6% to 30%.

Eligible Michigan families received an average credit of $3,856 in 2025, according to the state's Department of Treasury.