The Keep Your Pay Act makes significant changes to how taxes are calculated and provides new financial support for families with children. Starting in 2026, the bill nearly doubles the standard deduction—the amount of income you don't have to pay taxes on—from $23,625 to $56,250 for single filers and from $15,750 to $37,500 for married couples filing separately. This means most people will owe less in federal income taxes. The bill also adjusts tax brackets, reducing the top tax rate from 37% to 35% and the second-highest rate from 35% to 41%, providing tax relief across income levels.

The act creates a new monthly child allowance that provides $300 per month for each child under age 6 and $360 per month for each child under age 18 (120% of $300). Families with higher incomes will see this benefit gradually reduced. The bill also expands the Earned Income Tax Credit (EITC), which helps low- and moderate-income working people, by lowering age requirements and allowing workers to use prior-year earnings if their income dropped. Additionally, it creates a $500 credit for dependents who don't qualify as children under the new rules—such as elderly parents or disabled adult relatives you support.

These changes apply to tax years beginning after December 31, 2025, and are set to expire on December 31, 2035. The bill includes provisions for advance monthly payments of the child allowance, allowing families to receive money throughout the year rather than waiting until tax time. Various eligibility rules apply, including requirements that children live with you, that you provide their care, and that you have a valid taxpayer identification number.