The Internal Revenue Service, the IRS, on Friday unveiled its annual inflation adjustments for more than 60 tax provisions applicable to the 2026 tax year, with filing season set to begin early next year. Among the biggest changes is a modest bump in the Earned Income Tax Credit (EITC), an important refundable benefit that helps millions of low and moderate income working families across the country.
The changes, contained in Revenue Procedure 2025, and published on October 9, 2025, are part of the IRS regular effort to bring tax figures in line with increased cost of living. For eligible taxpayers, the boost in the EITC could mean bigger refunds, possibly as high as 8,231 for households with three or more qualifying children, a number that depicts the program’s effectiveness in boosting financial stability in times of economic stress.
Why the EITC Matters: A Refundable Boost for Everyday Earners
The Earned Income Tax Credit (EITC), created to incentivize work while providing direct relief, remains fully refundable. That means recipients can receive the full credit amount as a check from the government, even if they owe no federal income tax. According to IRS estimates, the program helps some 28 million households each year, though as many as one in five eligible people fail to claim it because they don’t know about it or find it too complicated to work through.
What makes the EITC stand out? It’s fully refundable, as previously mentioned. In simple terms, that means you can get the whole credit back as cash from the government, even if your tax bill comes to zero. the program reaches about 28 million households each year, rewarding everything from hourly jobs to freelancing. Yet, in a frustrating twist, roughly 20 of those who qualify simply don’t claim it often because the rules feel a bit labyrinthine.
How Much More Can You Expect in Tax Credit?
Not everyone qualifies, sadly. Your adjusted gross income should be lower than certain caps, which shift based on whether you’re married filing jointly or going it alone as a single parent, head of household, or qualifying surviving spouse. Qualifying children are usually under the age of 19 years or up to 24 if they’re full-time students, and if you have no kids, you’ll need to be between 25 and 64. One firm rule: Keep investment income under $12,200, or the credit vanishes.
The phase-out—where the benefit starts shrinking and eventually disappears—kicks in at lower earnings and ends higher up. For a quick reference:
| Number of Qualifying Children | Full Phase-Out for Married Filing Jointly | Full Phase-Out for Single/Head of Household/Qualifying Surviving Spouse |
|---|---|---|
| None | $26,820 | $19,540 |
| One | $58,863 | $51,593 |
| Two | $65,899 | $58,629 |
| Three or more | $70,244 | $62,974 |
It all starts winding down sooner: Say, $18,140 for joint filers without kids, or $10,860 if you’re single. The IRS offers a handy online tool, the EITC Assistant, to plug in your details and see exactly what you’d get no guesswork required.
Now, here’s a wider view: These EITC updates dovetail with elements of the fresh ‘One, Big, Beautiful Bill‘ legislation, which shores up family focused tax perks in other areas too. You’ll also see the standard deduction creep up, and income brackets nudge forward just enough to soften the bite for most middle class earners. For the families who need it most, those balancing part-time shifts with childcare or unexpected medical bills, this could mean a tangible difference.
Coverage from MassLive earlier this week echoed the IRS numbers closely, with only tiny discrepancies in the phase out figures that boil down to early reporting tweaks. As always, the advice from tax pros is clear: Don’ t leave money on the table. Lean on free services like the Volunteer Income Tax Assistance program, or VITA, for help sorting through the forms. With inflation still in the rearview, these quiet adjustments remind us how the tax code, for all its complexities, can still serve as a buffer against tougher times. Head to IRS. gov for the complete rundown, including that full Revenue Procedure document.
