Working families who count on one of the federal government’s most valuable tax breaks might face new hurdles if Senate Republicans approve changes tucked inside President Donald Trump’s sweeping budget bill.
The earned income tax credit (EITC), which can put thousands of dollars back in the pockets of low- and moderate-income workers, could become significantly harder to claim under provisions already passed by the House.
Starting in 2028, families would need to jump through additional hoops before they could receive what’s often their largest tax refund of the year.
For millions of Americans who rely on this credit to make ends meet, the proposed changes represent more than just extra paperwork. They could mean delayed refunds, denied claims, and lost income.
Who currently benefits from the earned income tax credit
The EITC serves as a financial lifeline for roughly 23 million working Americans, according to the IRS. Unlike most tax breaks that simply reduce what you owe, this credit is refundable, meaning you can receive money back even if you don’t owe any taxes.
For 2025, families with three or more children can receive up to $8,046 through the credit. Single filers can claim the maximum amount with adjusted gross income up to $61,555, while married couples filing jointly qualify with income up to $68,675. Smaller credits are available for families with fewer children or individuals without kids.
The credit targets workers who earn wages but struggle financially. Think restaurant servers, retail employees, home health aides, and others in lower-paying jobs. It’s designed to reward work by supplementing earnings, effectively boosting hourly wages for those who need it most.
Yet despite its value, the IRS estimates that 1 in 5 eligible taxpayers never claim the credit, often because they’re unaware it exists or find the eligibility rules too confusing.
What would change under the new legislation
The One Big Beautiful Bill Act passed by the House would fundamentally alter how families claim the EITC. Beginning in 2028, parents would need to obtain precertification for each qualifying child before filing their tax returns.
Under current rules, taxpayers simply claim the credit when they file, including their children’s information on Schedule EIC. The new system would require parents to submit documentation to the IRS in advance, proving their children meet all eligibility requirements.
According to the bill’s text, these changes aim to “avoid duplicative and other erroneous claims.” But tax policy experts warn the cure might be worse than the disease.
Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center, told CNBC, “You’re going to flood the IRS with all these documents. It’s just not clear how they’re going to process all this information.”
The precertification requirement isn’t a new concept. Similar proposals during the George W. Bush administration were studied and ultimately rejected. Research from that era found that precertification reduced EITC claims among eligible filers while yielding a lower return on investment compared to existing enforcement methods like audits.
Real-world consequences for working families
For families living paycheck to paycheck, these changes could create serious financial strain. Many low-income workers depend on their EITC refund to catch up on bills or handle unexpected expenses.
The precertification process would likely delay refunds for families who need them most. Parents would need to gather documentation, submit it to an already overburdened IRS, and wait for approval before they could even file their taxes.
Some families might give up entirely. Tax policy researchers found that when similar precertification was tested years ago, eligible families often failed to complete the process, forgoing thousands of dollars.
The timing couldn’t be worse. EITC claimants already face audit rates 5.5 times higher than other taxpayers, according to the Bipartisan Policy Center. Adding another layer of bureaucracy could push even more eligible families away from claiming the credit.
Single parents juggling multiple jobs might struggle to find time for the precertification process. Families with complicated living arrangements, such as children who split time between parents or live with grandparents, could face particular challenges proving residency requirements.
Nine Democratic senators recently expressed these concerns in a letter to Senate leadership, warning that the changes would “further complicate the EITC’s existing challenges and make it more difficult to claim.”
Steps to protect your tax credit
While these changes wouldn’t take effect until 2028 if approved by the Senate, families who rely on the EITC should start preparing now.
First, organize your documentation. Keep careful records of where your children live throughout the year, including school enrollment forms, medical records, and any custody agreements. The residency test often trips up EITC claimants, so maintaining clear proof of where children spend their time could prove crucial.
If you’ve been eligible but haven’t claimed the EITC in recent years, consider filing amended returns for the past three tax years to receive refunds you might have missed. The current process remains relatively simple, so take advantage while you can.
Look into free tax preparation services in your community. Many volunteer programs specifically help low-income workers claim the EITC. Building a relationship with these services now could prove valuable if the claiming process becomes more complex.
Don’t overlook other available benefits. The child tax credit provides another source of support for families with children. Many states also offer their own earned income credits that can supplement the federal version.
Stay informed about the bill’s progress through the Senate. The reconciliation process means Republicans need only a simple majority to advance the legislation, but specific provisions could still change. Contact your senators to share how these changes would affect your family.
Most importantly, don’t let potential future changes discourage you from claiming benefits you’re entitled to today.
The EITC is an effective anti-poverty program in the federal tax code, lifting millions of workers and children above the poverty line each year. Until the rules change, eligible families should continue claiming every dollar they deserve.
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