“A bill to amend the Internal Revenue Code of 1986 to expand, and make permanent certain modifications of, the earned income credit.”
No CRS summary available for this bill.
This section permanently extends and enhances the earned income tax credit (EITC) for individuals without qualifying children—currently available only to those ages 25 through 64 with earned income below approximately $18,000 (phaseout complete)—for taxable years beginning after December 31, 2025, by (1) lowering the minimum eligibility age to 19 (from 25) generally, to 24 for non-qualified students, and to 18 for qualified former foster youth or qualified homeless youth; (2) eliminating the maximum age limit of 64; (3) doubling the credit rate and phaseout rate to 15.3% (from 7.65%); (4) increasing the phase-in ceiling to $9,820 (from $4,220) and phase-out threshold to $11,610 (from $5,280); and (5) establishing inflation adjustments for these amounts and others, generally using CPI and base years such as 2025 or 1995. (Thus, the maximum credit approximately doubles to roughly $1,500 before inflation, with eligibility expanding to more young and older low-wage workers.)
This section makes permanent the application of the earned income tax credit to (1) Puerto Rico, (2) possessions with mirror code tax systems, and (3) American Samoa (previously limited to calendar years 2021 through 2025).
This section allows a taxpayer whose earned income for a taxable year is less than the prior taxable year to elect to substitute the prior year's earned income for the current year's earned income in calculating the earned income tax credit (EITC). For joint returns, the prior year's earned income is the sum of each spouse's earned income; incorrect use of prior-year income is treated as a mathematical error, and the election does not otherwise affect gross income determinations. The provision applies to taxable years beginning after December 31, 2025.