What Is the Keep Your Pay Act, and Does It Help Americans Abroad?

On March 9, 2026, Sen. Cory Booker (D-NJ) introduced the Keep Your Pay Act, a bill that would more than double the standard deduction and eliminate federal income tax on the first $75,000 of household income for married couples filing jointly. Single filers would see their standard deduction rise to $37,500 and heads of household to $56,250.

If passed, the bill would reduce federal income taxes by an estimated 85% for the median American family. But there is a catch for Americans living abroad: the Keep Your Pay Act does not address citizenship-based taxation, the Foreign Earned Income Exclusion (FEIE), FBAR, FATCA, or any of the unique filing burdens that affect the estimated 9 million Americans overseas.

Here is what the bill proposes, how it compares to current law, and what it would actually mean for expats.

What Does the Keep Your Pay Act Propose?

The bill has three main components: a dramatically higher standard deduction, expanded child tax credits, and a larger Earned Income Tax Credit (EITC).

1. Standard Deduction Increase

The centerpiece of the bill is a massive increase to the standard deduction:

Filing Status	Current (2025 OBBB)	2026 (IRS adjusted)	Keep Your Pay Act
Married Filing Jointly	$31,500	$32,200	$75,000
Single	$15,750	$16,100	$37,500
Head of Household	$23,625	$24,150	$56,250

For perspective, a married couple earning $75,000 or less would owe zero federal income tax under this proposal. That is a standard deduction increase of nearly 140% over the current law.

2. Expanded Child Tax Credit

The Keep Your Pay Act would also expand the Child Tax Credit through the American Family Act framework:

$3,600 per child ages 6 to 17 (up from $2,000 under current law)
$4,320 per child under age 6
$2,400 “baby bonus” in the year a child is born
All credits would be fully refundable, meaning families receive the full amount even if they owe no federal income tax

3. Expanded Earned Income Tax Credit

The bill would triple the value of the EITC and expand eligibility to include workers ages 19 to 24 and those 65 and older without children at home. Under current law, the EITC is limited for childless workers and restricted to ages 25 to 64.

How Would It Be Paid For?

Sen. Booker’s proposal would offset the cost by increasing tax revenue from corporations and high-income individuals. The proposed pay-fors include raising the corporate tax rate, increasing taxes on stock buybacks, tightening limits on executive compensation deductions, and strengthening corporate tax enforcement.

How Does This Compare to Current Tax Law?

The Keep Your Pay Act arrives in a tax landscape already reshaped by the One Big Beautiful Bill Act (OBBB), signed into law on July 4, 2025. Here is how the proposals stack up:

Provision	Current Law (OBBB, 2025)	Keep Your Pay Act
Standard deduction (MFJ)	$31,500	$75,000
Standard deduction (single)	$15,750	$37,500
Child Tax Credit (ages 6-17)	$2,000	$3,600
Child Tax Credit (under 6)	$2,000	$4,320
CTC fully refundable?	Partially (up to $1,700 refundable under OBBB)	Yes, fully refundable
EITC	Current structure	Tripled, expanded eligibility
FEIE	$130,000 (permanent under OBBB)	Not addressed
Citizenship-based taxation	In effect	Not addressed
FBAR/FATCA requirements	In effect	Not addressed

The OBBB already made several changes relevant to Americans abroad, including making the FEIE permanent and raising the standard deduction. However, neither the OBBB nor the Keep Your Pay Act addresses the fundamental issue of citizenship-based taxation that requires Americans abroad to file U.S. returns regardless of where they live.

Does the Keep Your Pay Act Help Americans Living Abroad?

In limited ways, yes. In the most meaningful ways, no.

Where It Helps

Higher standard deduction: If the bill became law, the $37,500 standard deduction for single filers (or $75,000 MFJ) would shelter more income from U.S. taxation. For expats who do not qualify for or choose not to use the FEIE, a higher standard deduction would reduce their taxable income.
Expanded Child Tax Credit: American families abroad with children could benefit from the higher CTC amounts, especially if the credit becomes fully refundable. Under current law, the refundable portion is capped, which limits the benefit for expats who reduce their taxable income to zero through the FEIE and then cannot claim the full credit.

Where It Falls Short for Expats

No change to citizenship-based taxation: The U.S. remains one of only two countries that taxes citizens on worldwide income regardless of residence. The Keep Your Pay Act does nothing to change this. Americans abroad would still need to file annual U.S. tax returns, report foreign accounts, and comply with FATCA.
No mention of the FEIE: The bill does not modify, expand, or interact with the Foreign Earned Income Exclusion. For the majority of expats, the FEIE ($130,000 for 2025, $132,900 for 2026) already provides more relief than even the proposed $37,500 standard deduction for single filers. The FEIE excludes earned income entirely, while a higher standard deduction simply reduces taxable income, which is a less powerful benefit.
No FBAR or FATCA relief: The reporting burden that makes expat life uniquely difficult, including FBAR filings, Form 8938 (FATCA), and the associated penalties for non-compliance, is not addressed.
No relief from double taxation: For expats in high-tax countries who rely on the Foreign Tax Credit rather than the FEIE, the Keep Your Pay Act offers no additional benefit. The FTC already eliminates U.S. tax liability for most Americans in countries with higher tax rates than the U.S.
No EITC for most expats: The EITC requires U.S.-sourced earned income. Expats earning income abroad generally cannot claim it, regardless of how the credit is expanded.

Proposed Tax Changes Don’t Replace Current Filing Rules

Greenback helps Americans abroad stay compliant with existing U.S. tax laws while monitoring potential policy changes that could affect expats.

How Does This Compare to the Residence-Based Taxation Bill?

For Americans abroad, the more consequential legislation is the Residence-Based Taxation for Americans Abroad Act (H.R. 10468), which would allow qualifying U.S. citizens living abroad to elect non-resident status and pay U.S. taxes only on U.S.-sourced income.

Feature	Keep Your Pay Act	Residence-Based Taxation Bill (H.R. 10468)
Addresses citizenship-based taxation	No	Yes
Eliminates foreign income reporting	No	Yes (for qualifying expats)
Reduces FBAR/FATCA burden	No	Yes
Helps domestic taxpayers	Yes, significantly	No (expat-focused)
Likelihood of passage	Very low (Democrat minority in Senate)	Low (no current committee action)

Neither bill is likely to become law in the current Congress. Republicans hold a governing trifecta (House, Senate, and White House), and the Keep Your Pay Act is a Democrat proposal introduced by a senator facing a 2026 re-election campaign. The Residence-Based Taxation bill, while it has had bipartisan interest, has no active committee hearings scheduled.

What Should You Do Right Now?

Regardless of what happens with the Keep Your Pay Act or any other proposed legislation, your current tax obligations remain unchanged. Here is what matters for the 2025 tax year (filed in 2026):

The FEIE is your primary tool: You can exclude up to $130,000 of foreign earned income using Form 2555. This benefit was made permanent under the OBBB, so it is no longer subject to legislative renewal.
The standard deduction is $15,750 (single) or $31,500 (MFJ): These are the current amounts under the OBBB for the 2025 tax year. They rise to $16,100 and $32,200, respectively, for 2026.
FBAR and FATCA deadlines are approaching: If your foreign financial accounts exceeded $10,000 at any point in 2025, your FBAR is due April 15, 2026 (with an automatic extension to October 15). Form 8938 is due with your tax return.
If you are behind on filing, catch up now: The IRS Streamlined Filing Compliance Procedures allow qualifying expats to file three years of tax returns and six years of FBARs with no penalties. This program is available now, and waiting for future legislation to change the rules is not a strategy.

Frequently Asked Questions

What is the Keep Your Pay Act?

The Keep Your Pay Act is a tax bill introduced by Sen. Cory Booker (D-NJ) on March 9, 2026. It would raise the standard deduction to $75,000 for married couples filing jointly ($37,500 for single filers), expand the Child Tax Credit to up to $4,320 per child, and triple the Earned Income Tax Credit. The bill is designed to eliminate federal income tax on the first $75,000 of household income for most American families.

Has the Keep Your Pay Act passed?

No. The Keep Your Pay Act was introduced in the Senate on March 9, 2026, and has not been voted on or passed by either chamber. As a Democrat-sponsored bill in a Republican-controlled Congress, it faces very long odds of becoming law in its current form. Your tax obligations under current law remain unchanged.

Would the Keep Your Pay Act eliminate my taxes as an expat?

Not likely in any meaningful way beyond what the FEIE already provides. The FEIE allows you to exclude up to $130,000 of foreign earned income (2025), which is far more than the proposed $37,500 standard deduction for single filers. The bill does not address citizenship-based taxation, FBAR, FATCA, or any expat-specific filing requirements.

How does the Keep Your Pay Act differ from the OBBB tax changes?

The One Big Beautiful Bill Act (OBBB), signed July 4, 2025, is current law. It raised the standard deduction to $15,750 (single) and $31,500 (MFJ) for 2025 and made the FEIE permanent. The Keep Your Pay Act would more than double those standard deduction amounts, but it is only a proposal, not a law. Unlike the OBBB, the Keep Your Pay Act does not include any provisions specific to Americans abroad.

Is there any tax bill that would help Americans living abroad?

The most relevant proposal for expats is the Residence-Based Taxation for Americans Abroad Act (H.R. 10468), which would allow qualifying Americans abroad to elect non-resident status and pay U.S. taxes only on U.S.-sourced income. This bill would also reduce FBAR and FATCA reporting burdens. However, it has not advanced through committee and its prospects remain uncertain.

What is the current standard deduction for expats?

For the 2025 tax year (filed in 2026), the standard deduction is $15,750 for single filers and $31,500 for married filing jointly under the OBBB. For 2026, the IRS has set the amounts at $16,100 (single) and $32,200 (MFJ). These deductions apply to all U.S. taxpayers, including Americans abroad, but most expats benefit more from the FEIE, which excludes up to $130,000 (2025) or $132,900 (2026) of foreign earned income.

Should I wait for the Keep Your Pay Act before filing my taxes?

No. The Keep Your Pay Act is a proposal with no scheduled vote and a very low likelihood of passage in the current Congress. Your 2025 tax return is due April 15, 2026 (June 15 for Americans abroad with the automatic extension). File under current law using the FEIE, Foreign Tax Credit, and existing deductions. Waiting for legislation that may never pass is not a filing strategy.

The Bottom Line for Expats

The Keep Your Pay Act is a domestic-focused tax proposal that would benefit working American families earning under $75,000. For Americans abroad, it does not address the fundamental challenges of citizenship-based taxation, foreign income reporting, or FBAR/FATCA compliance. The existing FEIE ($130,000 exclusion) already provides more relief to most expats than the proposed standard deduction increase.

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Stay Compliant While Expat Tax Laws Evolve

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This article is for informational purposes only and does not constitute tax or legal advice. The Keep Your Pay Act is proposed legislation and has not been enacted into law. Tax obligations under current law remain unchanged. Always consult with a qualified tax professional about your specific situation.