H.R. 2764

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2764 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 2764

To amend the Internal Revenue Code of 1986 to expand, and make 
permanent certain modifications of, the earned income credit.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 9, 2025

Mr. Evans of Pennsylvania (for himself, Mr. Khanna, Ms. Ansari, Ms. 
Crockett, Ms. DeLauro, Mrs. Foushee, Mr. McGovern, Mr. Nadler, Ms. 
Norton, Ms. Ocasio-Cortez, Mrs. Ramirez, Ms. Sanchez, Ms. Scanlon, Ms. 
Sewell, Ms. Simon, Mr. Thanedar, Ms. Titus, Ms. Tlaib, and Mr. 
Horsford) introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to expand, and make 
permanent certain modifications of, the earned income credit.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Tax Cut for Workers Act of 2025''.

SEC. 2. PERMANENT EXTENSION OF EARNED INCOME CREDIT RULES FOR 
INDIVIDUALS WITHOUT QUALIFYING CHILDREN.

(a) Decrease in Minimum Age for Credit.--
(1) In general.--Subclause (II) of section 32(c)(1)(A)(ii) 
of the Internal Revenue Code of 1986 is amended by striking 
``age 25'' and inserting ``the applicable minimum age''.
(2) Applicable minimum age.--Paragraph (1) of section 32(c) 
of such Code is amended by adding at the end the following new 
subparagraph:
``(F) Applicable minimum age.--For purposes of this 
paragraph--
``(i) In general.--The term `applicable 
minimum age' means--
``(I) except as otherwise provided 
in this clause, age 19,
``(II) in the case of a student (as 
defined in section 152(f)(2)), other 
than a qualified former foster youth or 
a qualified homeless youth, age 24, and
``(III) in the case of a qualified 
former foster youth or a qualified 
homeless youth, age 18.
``(ii) Qualified former foster youth.--For 
purposes of this subparagraph, the term 
`qualified former foster youth' means an 
individual who--
``(I) on or after the date that 
such individual attained age 14, was in 
foster care provided under the 
supervision or administration of an 
entity administering (or eligible to 
administer) a plan under part B or part 
E of title IV of the Social Security 
Act (without regard to whether Federal 
assistance was provided with respect to 
such child under such part E), and
``(II) provides (in such manner as 
the Secretary may provide) consent for 
entities which administer a plan under 
part B or part E of title IV of the 
Social Security Act to disclose to the 
Secretary information related to the 
status of such individual as a 
qualified former foster youth.
``(iii) Qualified homeless youth.--For 
purposes of this subparagraph, the term 
`qualified homeless youth' means, with respect 
to any taxable year, an individual who 
certifies, in a manner as provided by the 
Secretary, that such individual is either an 
unaccompanied youth who is a homeless child or 
youth, or is unaccompanied, at risk of 
homelessness, and self-supporting.''.
(b) Elimination of Maximum Age for Credit.--Subclause (II) of 
section 32(c)(1)(A)(ii) of the Internal Revenue Code of 1986 is amended 
by striking ``but not attained age 65''.
(c) Increase in Credit and Phaseout Percentages.--The table 
contained in paragraph (1) of section 32(b) of the Internal Revenue 
Code of 1986 is amended by striking ``7.65'' each place it appears and 
inserting ``15.3''.
(d) Increase in Earned Income and Phaseout Amounts.--The table 
contained in subparagraph (A) of section 32(b)(2) of the Internal 
Revenue Code of 1986 is amended--
(1) by striking ``$4,220'' and inserting ``$9,820'', and
(2) by striking ``$5,280'' and inserting ``$11,610''.
(e) Inflation Adjustments.--
(1) In general.--Paragraph (1) of section 32(j) of the 
Internal Revenue Code of 1986 is amended to read as follows:
``(1) In general.--In the case of any taxable year 
beginning after--
``(A) 2021, in the case of the dollar amount in 
subsection (i)(1),
``(B) 2026, in the case of the dollar amounts in 
the third row of the table in subsection (b)(2)(A), and
``(C) 2015, in any other case,
each of the dollar amounts in subsections (b)(2) and (i)(1) 
shall be increased by an amount equal to the inflation 
amount.''.
(2) Inflation amount.--Subsection (j) of section 32 of such 
Code is amended by adding at the end the following new 
paragraph:
``(3) Inflation amount.--For purposes of paragraph (1), the 
inflation amount with respect to any dollar amount for any 
taxable year is the amount equal to--
``(A) such dollar amount, multiplied by
``(B) the percentage (if any) by which--
``(i) the CPI (as defined in section 
1(f)(4)) for the calendar year preceding the 
year in which the taxable year begins, exceeds
``(ii) the CPI (as so defined) for--
``(I) in the case of amounts in the 
third row of the table in subsection 
(b)(2)(A), 2025,
``(II) in the case of any other 
amount in subsection (b)(2)(A), 1995,
``(III) in the case of the $5,000 
amount in subsection (b)(2)(B), 2008, 
and
``(IV) in the case of the $10,000 
amount in subsection (i)(1), 2020.''.
(f) Conforming Amendment.--Section 32 of the Internal Revenue Code 
of 1986 is amended by striking subsection (n).
(g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.

SEC. 3. APPLICATION OF EARNED INCOME CREDIT TO POSSESSIONS OF THE 
UNITED STATES.

(a) Puerto Rico.--Subparagraph (B) of section 7530(a)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``in the case of 
calendar years 2021 through 2025,''.
(b) Possessions With Mirror Code Tax Systems.--Subparagraph (B) of 
section 7530(b)(1) of the Internal Revenue Code of 1986 is amended by 
striking ``in the case of calendar years 2021 through 2025,''.
(c) American Samoa.--Subparagraph (B) of section 7530(c)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``in the case of 
calendar years 2021 through 2025,''.

SEC. 4. ELECTION TO USE PRIOR YEAR EARNED INCOME.

(a) In General.--Paragraph (2) of section 32(c) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
``(C) Election to use prior year earned income.--
``(i) In general.--If the earned income of 
the taxpayer for any taxable year is less than 
the earned income of the taxpayer for the 
preceding taxable year, the credit allowed 
under subsection (a) may, at the election of 
the taxpayer, be determined by substituting--
``(I) such earned income for such 
preceding taxable year, for
``(II) such earned income for the 
taxable year for which such credit is 
being determined.
``(ii) Application to joint returns.--For 
purposes of clause (i), in the case of a joint 
return, the earned income of the taxpayer for 
the preceding taxable year shall be the sum of 
the earned income of each spouse for such 
taxable year.
``(iii) Special rules.--
``(I) Errors treated as 
mathematical errors.--For purposes of 
section 6213, an incorrect use on a 
return of earned income pursuant to 
clause (i) shall be treated as a 
mathematical or clerical error.
``(II) No effect on determination 
of gross income, etc.--Except as 
otherwise provided in this 
subparagraph, this title shall be 
applied without regard to any 
substitution under clause (i).''.
(b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2025.
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