Tax Cut for Workers Act of 2025
Summary
What This Bill Does
The Tax Cut for Workers Act makes the American Rescue Plan-style childless earned income tax credit expansion permanent and adds a prior-year income option. It lowers the minimum age to 19, keeps students generally at age 24, allows qualified former foster youth and qualified homeless youth at age 18, removes the age-65 ceiling, doubles the childless EITC percentage from 7.65 to 15.3, raises the phaseout dollar amounts to $9,820 and $11,610, updates inflation rules, permanently removes the 2021-through-2025 limits on EITC payments to possessions, and lets taxpayers use prior-year earned income if current-year earned income is lower for taxable years after 2025.
Who Benefits and How
Low-wage workers without children benefit because the childless EITC percentage and phaseout levels increase. Qualified former foster youth benefit because eligibility can begin at age 18 instead of the ordinary age 19 rule. Qualified homeless youth benefit because the bill gives them the same age-18 entry point. Workers in Puerto Rico and other possessions benefit because the possession EITC payment rules are no longer limited to 2021 through 2025.
Who Bears the Burden and How
The Internal Revenue Service must update EITC eligibility, inflation, prior-year-income, and math-error rules. Possession tax administrators must coordinate permanent EITC payment rules with Treasury. Federal taxpayers bear the budget cost of larger and more widely available refundable EITC benefits. Tax return preparers must document foster-youth, homeless-youth, and prior-year income elections correctly.
Key Provisions
- Expands EITC eligibility by setting the minimum age at 19, age 24 for most students, and age 18 for qualified former foster or homeless youth.
- Repeals the upper age limit for childless EITC eligibility.
- Modifies the childless EITC percentage from 7.65 to 15.3 and increases phaseout amounts to $9,820 and $11,610.
- Extends EITC application to possessions by striking 2021-through-2025 limits.
- Creates a prior-year earned-income election when current-year earnings are lower after 2025.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Permanently expands the earned income tax credit for workers without qualifying children by lowering eligibility ages, removing the upper age cap, increasing credit percentages and phaseout amounts, extending possession payments, and allowing a prior-year earned-income election after 2025.
Key Policy Areas
Tax, Labor, Territories
Primary Purpose
Permanently expands the earned income tax credit for workers without qualifying children by lowering eligibility ages, removing the upper age cap, increasing credit percentages and phaseout amounts, extending possession payments, and allowing a prior-year earned-income election after 2025.
Policy Domains
Resolution provisions
Identified Gains
- Low-wage workers without children
- Qualified former foster youth
- Qualified homeless youth
- Workers in Puerto Rico
Identified Costs
- Internal Revenue Service
- Possession tax administrators
- Federal taxpayers
- Tax return preparers
Sponsors
Legislative Progress
In CommitteeMr. Evans of Pennsylvania (for himself, Mr. Khanna, Ms. Ansari, …
Referred to the House Committee on Ways and Means.
Introduced in House
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
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