A bill has been introduced in Congress that would lower the earned income portion of the federal Child Tax Credit to $1, potentially impacting low-income families nationwide. The Stronger Start for Working Families Act, introduced by Republican Representatives Carol Miller and María Salazar alongside Democrats Steven Horsford and Chris Pappas to the House of Representatives, would see the earned-income threshold for the refundable Child Tax Credit dropped from $2,500 to $1. The Child Tax Credit is a federal tax break for families with qualifying children under the age of 17.
It reduces a household’s federal income-tax bill, while a portion, known as the Additional Child Tax Credit (ACTC), can be paid as a refund to eligible lower-income families even if they owe little or no income tax. For 2025, the refundable portion is worth up to $1,700 per child. The federal Child Tax Credit has an earned-income threshold of $2,500 for families seeking the refundable portion of the credit, known as the Additional Child Tax Credit (ACTC).
A household generally needs at least $2,500 in earnings from work or self-employment before it can receive any of the credit as a refund. Above that threshold, the refundable credit generally builds at a rate of 15 percent of earnings over $2,500, subject to the maximum refundable amount per qualifying child. For example, someone earning $10,000 would have $7,500 of income above the threshold; 15 percent of that is $1,125, meaning their refundable credit could be up to $1,125.
The bill would lower the earnings threshold for the refundable Child Tax Credit from $2,500 to $1, allowing low-income parents to begin building up the refundable credit from virtually their first dollar of work rather than receiving nothing on their first $2,500 of earnings. For tax year 2026, the maximum refundable portion remains $1,700 per qualifying child. Lawmakers say the change will provide "meaningful tax relief to families and encourage more Americans to enter into the workforce." “The Stronger Start for Working Families Act is a common-sense piece of legislation designed to help our families across the country who are struggling with the rising costs of raising a child," Miller said.
"By lowering the earned income limit, we can ensure parents start receiving much-needed Child Tax Credit benefits from the very first dollar they earn, providing tax relief and improved peace of mind to those needing it most." "Families in New Hampshire are working hard and still coming up short. Child care for a family with two kids costs close to $32,000 a year here, more than a quarter of our state's median family income," Pappas explained. "It makes no sense that parents who need the Child Tax Credit most are the ones missing out.
This bill is a simple and straightforward fix: let families start earning the credit with their first dollar of work so we can put money back in their pockets." The bill is also supported by several charities and family and children's advocacy groups, including Save The Children, the Bipartisan Policy Center Action, and Bread for the World, among others. The proposal comes as millions of children remain unable to receive the full Child Tax Credit because their families earn too little. An estimated 19 million children under 17, more than one in four nationwide, will receive less than the full $2,200 credit, or no credit at all, in 2026 because of their families' income, according to an analysis published earlier this year by the left-leaning Center on Budget and Policy Priorities.
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