The Earned Income Tax Credit (EITC) helps tens of millions of low- and moderate-income working Americans by giving them a refundable federal tax credit. This bill would significantly expand who can claim it. It would let workers caring for aged parents (65+) and disabled adult dependents claim the credit — currently the credit centers on qualifying children only. It would also extend eligibility to qualifying students enrolled in college (those receiving Pell Grants or with family income under 250% of the poverty line), and lower the minimum age for childless workers from 25 to 18. A new $1,200 minimum credit floor would apply to students and certain caregivers, regardless of how income calculations would otherwise work out. The bill also lets recipients elect to receive their refund as monthly installments rather than as a single lump-sum refund, and creates a new federal matching-grant program for community-based Volunteer Income Tax Assistance programs that prepare free tax returns for low-income filers (capped at $30 million per year).
Average Household Impact
- EITC eligibility — Expanded to include workers caring for aged parents or disabled adult dependents and qualifying college students
- EITC minimum age for childless workers — Lowered from 25 to 18
- EITC minimum credit floor — New $1,200 minimum for qualifying students and certain dependent caregivers
- EITC monthly-payment option — New election to receive credit in monthly installments rather than as a lump-sum refund
- Federal funding for free tax-preparation help — New VITA matching-grant program ($30M/year cap) for community return-prep programs serving low-income filers
Congressional Summary
EITC Modernization ActThis bill expands eligibility for the earned income tax credit (EITC), provides a minimum EITC amount of $1,200 (subject to limitations), and allows an individual to receive the EITC as monthly payments. The bill also establishes a grant program for tax return preparation assistance for low-income individuals.Under the bill, EITC eligibility is expanded to include a student who meets certain requirements and an individual with a qualifying dependent, which includes aqualifying child,dependent who attains the age of 65 within the tax year and for whom the individual may claim a tax deduction for a personal exemption, anddependent or spouse who is physically or mentally incapable of caring for themselves and meets certain residency requirements.Further, for an individual who does not have a qualifying dependent, the bill lowers the EITC eligibility age to 18 years (from 25 years) and eliminates the maximum age limit.The bill allows an individual who meets certain requirements to receive the EITC in monthly payments and provides for a one-time increase in the first monthly payment. The bill also provides a new parent (through birth or adoption) an increase in their monthly EITC payments (subject to limitations).Finally, the bill establishes a grant program, which is similar to the existing Volunteer Income Tax Assistance program and provides funding for tax return preparation assistance for low-income taxpayers and members of underserved populations.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-01-31
- Date Added
- 2026-05-02
- Source
- Congress.gov →
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