What does Preamble of Lower Your Taxes Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The stated purpose is to expand the earned income and child tax credits. The bill was introduced in the House of Representatives on January 15, 2025.

What does SENSE OF CONGRESS. of Lower Your Taxes Act do?

This section expresses the sense of Congress regarding the use of net revenue generated by the Act. The Act's net revenue should be used to reduce the national deficit. After reducing the deficit, any remaining revenue should be used to reduce the national debt.

What does EXPANSION OF EARNED INCOME TAX CREDIT. of Lower Your Taxes Act do?

This section amends various provisions of the Internal Revenue Code of 1986 related to the Earned Income Tax Credit (EITC). The credit percentage and phaseout percentage are adjusted, increasing the maximum credit and reducing phaseout rates. Earned income amounts and phaseout amounts are increased. Age limitations for EITC eligibility are lowered from age 25 to age 18. The Secretary of the Treasury is directed to establish a program to notify individuals who may be eligible for the EITC. The EITC's earned income and phaseout amounts will be adjusted for inflation beginning in 2026, using GDP data. The amendments apply to taxable years beginning after December 31, 2025.

What does PAYMENTS TO TAXPAYERS DETERMINED BY TREATING STATE NON- of Lower Your Taxes Act do?

This section establishes a program for annual payments to eligible individuals. Payments will be equal to the State refundable earned income tax credit equivalency amount for taxable years beginning after 2025. An 'eligible individual' is someone who is eligible for and claims a non-refundable earned income tax credit in an 'eligible State'. An 'eligible State' must have a non-refundable earned income tax credit and enter into an agreement with the Secretary to provide information. The 'non-refundable earned income tax credit' is a credit against state income tax, based on earned income, and limited to the taxpayer's tax liability. Credits modified to increase payments under this section will not be considered non-refundable. The 'State refundable earned income tax credit equivalency amount' is the excess of the non-refundable credit if not limited by tax liability, over the increase in state income tax liability. Payments made under this program will be treated as payments of Federal income tax and any overpayment will be refunded. The Secretary (Secretary of the Treasury or their delegate) is responsible for administering this section.

What does ESTABLISHMENT OF REFUNDABLE CHILD TAX CREDIT WITH MONTHLY of Lower Your Taxes Act do?

This section amends the Internal Revenue Code of 1986 to establish a monthly refundable child tax credit. The monthly specified child allowance is $300 for children aged 6 and older, and $350 for children younger than 6. The credit is subject to reduction based on modified adjusted gross income, with different threshold amounts for joint returns, married individuals filing separately, and other filers. Inflation adjustments will be applied to the dollar amounts and threshold amounts beginning after December 31, 2025. The bill defines 'specified child' based on residency, age, care provided by the taxpayer, and citizenship/residency status. Certain information disclosures are permitted to facilitate the determination of monthly advance child payments.

What does CAPITAL GAINS RATES NOT APPLICABLE TO CERTAIN HIGH INCOME of Lower Your Taxes Act do?

This section amends Section 1(h)(1) of the Internal Revenue Code of 1986 to specify that capital gains rates do not apply to taxpayers with taxable income not exceeding $1,000,000 (or half that amount for those filing separately). It adds a new paragraph (12) to Section 1(h) to provide for an inflation adjustment to the $1,000,000 threshold, beginning after 2026. The inflation adjustment will be based on the cost-of-living adjustment determined under section 1(f)(3), using 2025 as the base year. Any increase resulting from the inflation adjustment will be rounded to the nearest multiple of $50. The amendments in this section apply to taxable years beginning after December 31, 2025.

What does INCREASE IN RATES OF CERTAIN CORPORATE TAXES. of Lower Your Taxes Act do?

This section amends the Internal Revenue Code of 1986 to increase corporate tax rates. The corporate income tax rate is increased from 21 percent to 28 percent. The rate of tax on repurchase of corporate stock is increased from 1 percent to 4 percent. The corporate alternative minimum tax rate is modified, establishing a 15 percent rate on the first $5,000,000,000 of adjusted financial statement income and a 25 percent rate on amounts exceeding that threshold. These amendments apply to taxable years beginning after December 31, 2025.

Back to bills

Lower Your Taxes Act

Last updated: 1/15/2025 · Introduced: 1/15/2025

Author: Emilia Sykes (D-OH)

TL;DR (AI)

This bill expands the Earned Income Tax Credit (EITC) by adjusting credit percentages, phaseout rates, and income thresholds, and lowers the age requirement for eligibility to 18.
The bill establishes a new monthly refundable child tax credit of $300 to $350 per child, depending on age, subject to income-based reductions and inflation adjustments.
Corporate income tax rates are increased from 21% to 28%, the tax on stock repurchases increases from 1% to 4%, and a modified alternative minimum tax is established for large corporations.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, sense of congress., and 5 more.

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