Whitmer Warns If IRS Wacks Earned Income Tax Credit, Cuts Could Cost Families $10K — Here’s What to Know

Proposed Republican budget changes threaten Michigan households’ federal Earned Income Tax Credit access, potentially impacting over 700,000 families financially. State leaders pledge to shield residents through local measures amid ongoing economic uncertainty.

IRS data shows Michigan households could lose crucial federal tax refunds if proposed Republican budget changes take effect.

In Lansing on June 18, 2025, Gov. Gretchen Whitmer warned that a proposed U.S. House Republican budget bill would impose “dangerous attacks” on the federal Earned Income Tax Credit Michigan, potentially stripping more than 700,000 Michigan households of thousands of dollars in annual refunds.

Earned Income Tax Credit in Michigan could drop by thousands for large families

Earned Income Tax Credit Will Affect Large Families

Under the plan, families with three or more children in Michigan—who currently receive up to $10,000 annually via the EITC—could see that support evaporate due to new red tape and documentation requirements. The IRS data shows roughly 676,000 Michigan claims averaging $2,813 per filer for 2023.

New federal pre-certification hurdles threaten access and equity

The proposed legislation would compel EITC claimants to pre?certify each qualifying child annually, requiring a certificate before filing. This added bureaucracy, combined with ongoing IRS staffing shortfalls, could prevent hundreds of thousands from submitting valid claims starting in 2028.

State-level EITC expansion offers a partial buffer

Since 2023, Michigan has boosted its state-level credit, increasing its match to 30% of the federal EITC via the Michigan Working Families Tax Credit. This move quintupled the credit from 6%, delivering an average total refund of approximately $3,150 to around 700,000 families.

Voices of support: unions, nonprofits, and aging advocates speak out

Ron Bieber, president of the Michigan AFL?CIO, condemned the Republican plan as “taking from the working class so they can give billionaires a tax cut,” calling it “unacceptable”. Monique Stanton of the Michigan League for Public Policy said the changes would burden low-income families, asserting the EITC “helps hundreds of thousands of Michiganders make ends meet each year,” noting its origins under President Gerald Ford. Lori Stephens?Brown, director of Marquette Aging Services, described the credit as “a lifeline,” especially for seniors.

Why Michigan stands to lose the most

Michigan’s reliance on EITC is slightly above the national average, with a 2023 average credit of $2,813, compared to a nationwide average of $2,743. With most of the state’s credit tied to low?income parents and seniors, increased barriers may exacerbate food, housing, and utility insecurity.

What this means for Michigan: households strapped for essentials

Families often spend EITC funds on groceries, utilities, fuel, and school supplies. The Whitmer administration noted that nearly 50% of Michigan children live in households benefiting from the tax credit. Blocking access will magnify hardship during economic uncertainty.

State leaders vow to shield residents from federal cuts

Whitmer and Lieutenant Governor Garlin Gilchrist II pledged to “Stand Tall for Michigan” by continuing state support through the Working Families Tax Credit and other cost-saving measures. Their defense of the credit complements broader initiatives: codifying the ACA into state law, expanding school meal programs, affordable housing investments, rural broadband projects, and workforce grants .

Expert perspective reinforces warning

Economists stress the EITC’s efficiency. A recent IRS analysis shows low-income workers benefit more from an expanded EITC than from minimum-wage increases. Crippling access may undercut progress in poverty alleviation.

Looking ahead: what’s next in the EITC Michigan debate

The House bill must pass the Senate and be signed by the president. Michigan’s congressional delegation has largely opposed the changes. Activists are urging citizens to contact lawmakers. Meanwhile, state officials are exploring potential legal challenges or state-level compensatory measures.

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