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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1372 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 1372
To amend the Internal Revenue Code of 1986 to expand, and make
permanent certain modifications of, the earned income credit.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 9, 2025
Ms. Cortez Masto (for herself, Mr. Bennet, Ms. Alsobrooks, Ms. Baldwin,
Mr. Blumenthal, Ms. Blunt Rochester, Mr. Booker, Ms. Cantwell, Mr.
Coons, Ms. Duckworth, Mr. Durbin, Mr. Fetterman, Mr. Gallego, Mrs.
Gillibrand, Mr. Heinrich, Mr. Hickenlooper, Ms. Hirono, Mr. Kaine, Mr.
Kelly, Mr. Kim, Mr. King, Ms. Klobuchar, Mr. Lujan, Mr. Markey, Mr.
Merkley, Mr. Murphy, Mrs. Murray, Mr. Padilla, Mr. Peters, Mr. Reed,
Ms. Rosen, Mr. Sanders, Mr. Schatz, Mr. Schiff, Mr. Schumer, Mrs.
Shaheen, Ms. Slotkin, Ms. Smith, Mr. Van Hollen, Mr. Warner, Mr.
Warnock, Ms. Warren, Mr. Welch, Mr. Whitehouse, and Mr. Wyden)
introduced the following bill; which was read twice and referred to the
Committee on Finance
_______________________________________________________________________
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.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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