S.1372 - Tax Cut for Workers Act of 2025 (119th Congress)
Summary
S.1372, the "Tax Cut for Workers Act of 2025," proposes to amend the Internal Revenue Code of 1986 to expand and make permanent certain modifications to the Earned Income Credit (EIC). The bill aims to lower the minimum age for EIC eligibility for individuals without qualifying children, eliminate the maximum age, and increase credit and phaseout percentages and amounts. It also addresses inflation adjustments and the application of the EIC to U.S. possessions.
Expected Effects
The bill's passage would result in more low-income workers, particularly younger individuals and those without children, becoming eligible for the EIC. The increased credit amounts and adjustments for inflation would provide greater financial assistance to eligible individuals and families. Additionally, making these changes permanent would provide long-term stability and predictability for those relying on the EIC.
Potential Benefits
- Increased financial support for low-income workers, especially those without qualifying children.
- Expanded eligibility for younger workers and former foster youth/homeless youth.
- Inflation adjustments to maintain the real value of the credit over time.
- Simplification of the EIC rules by eliminating the maximum age limit.
- Application of EIC to possessions of the US.
Potential Disadvantages
- Increased government spending and potential budget deficits.
- Potential for increased complexity in tax administration and compliance.
- Possible disincentive to work for some individuals due to the phase-out of the credit.
- The cost of the expansion may need to be offset by other tax increases or spending cuts.
- Potential for fraud and abuse in claiming the credit, especially with expanded eligibility.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Constitution's mandate to "provide for the general Welfare" (Preamble) by offering financial assistance to low-income workers. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The expansion and modification of the Earned Income Credit falls under this power.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).