Discussion on EITC Changes Amid Trump’s Bill

In a recent debate regarding President Donald Trump’s “Big Beautiful Building” bill, lesser-known provisions from the House-approved package have emerged that could complicate the process for claiming low-income tax credits.

If implemented as outlined, the “One Big Beautiful Bill Act” mandates advance certification for each qualified child of a taxpayer claiming the Earned Income Tax Credit (EITC) starting in 2028.

Currently, taxpayers simply claim the EITC on their returns, using a schedule for qualified children. The purpose of this new requirement, according to the bill, is to “avoid duplicate false claims and other false claims.” However, experts indicate that these new regulations may unintentionally impact eligible filers. This could potentially delay tax refunds for these taxpayers, especially in light of cuts to the IRS, analysts suggest.

Janet Holtzblatt from the Urban-Brookings Tax Policy Center remarked, “You’re overflowing with the IRS with all this [EITC].” Holtzblatt, who advocates for simplifying the EITC, highlighted these challenges in a recent proposal.

Greg Razerson, a senior fellow at the New York University Law Center for Tax Law, noted that the concept isn’t new. It has been considered before but ultimately discarded for valid reasons. Past studies, dating back to the George W. Bush administration, found that implementing a pre-certification process could actually reduce the number of valid EITC claims, which, he argued, is not the direction intended.

EITC Eligibility Complexity

The EITC is particularly advantageous because it is “refundable,” meaning individuals can receive a refund even if they owe no taxes. This characteristic is crucial for low-income earners who may not have a tax bill.

To qualify, individuals must earn income through employment, and eligibility is determined through several IRS criteria. Holtzblatt pointed out that residency requirements for qualified children often lead to mistakes, complicating the eligibility process.

In 2025, eligible families could see tax credits valued up to $8,046. For single filers, the adjusted gross income threshold stands at $61,555. Married couples can earn up to $68,675, with phase-outs applying to families with three or more children. Despite the potential benefits, about one in five eligible taxpayers fail to claim the EITC, according to IRS estimates.

Concerns Over Proposed Changes

Recently, nine Democratic Senators voiced their concerns to Senate Majority Leader John Tune and House Speaker Mike Johnson regarding changes to the EITC that were approved by the House. They highlighted that these updates could further complicate advocacy for the program.

While audits tend to target higher earners more frequently, those claiming the EITC face an audit rate that is significantly higher—5.5 times greater than other taxpayers—due to the prevalence of improper payments.

The proposed modifications to the EITC, along with various House regulations, still require Senate approval. As it stands, Senate Republicans only need a simple majority to push the bill forward, leaving the future of these changes somewhat uncertain.