HB2764, titled the Tax Cut for Workers Act of 2025, would substantially expand and make permanent several changes to the federal Earned Income Tax Credit (EITC). The bill lowers the minimum age for childless workers to claim the credit from 25 to 19, with special lower thresholds for students, former foster youth, and homeless youth, and it eliminates the current upper age limit of 65. It also increases the credit rate and phaseout percentages, raises the earned income and phaseout thresholds, and updates inflation indexing rules so the larger amounts continue to adjust over time.
The bill also extends EITC eligibility to U.S. territories and possessions by removing the current sunset language for Puerto Rico, mirror-code territories, and American Samoa. In addition, it creates a new option allowing taxpayers whose earnings fall from one year to the next to elect to use prior-year earned income when calculating the credit, which could help stabilize benefits for workers with fluctuating wages. Most of the changes would apply to taxable years beginning after December 31, 2025.
Impact
If enacted, the bill would amend multiple provisions of the Internal Revenue Code, especially section 32 governing the Earned Income Credit, and would repeal a related subsection that would no longer be needed. It would expand eligibility for childless workers, increase potential credit amounts, change inflation adjustment mechanics, and add a new election for using prior-year earnings. It would also permanently extend EITC treatment in certain U.S. territories and possessions, affecting taxpayers in Puerto Rico, American Samoa, and mirror-code jurisdictions.
Sentiment
The available context suggests the bill is framed positively as a tax cut for workers and a pro-income-support measure for low- and moderate-income taxpayers. The introduction by a large group of Democratic sponsors indicates support from lawmakers who favor expanding the EITC and making its temporary provisions permanent. No committee transcript or vote record is provided, so there is no recorded opposition or amendment debate in the supplied materials.
Contention
The main policy points likely to draw debate are the size and permanence of the EITC expansion, the lower age threshold for childless workers, and the elimination of the age-65 cap. Some lawmakers may also scrutinize the cost of increasing credit rates and thresholds, as well as the administrative complexity of the prior-year income election and the special eligibility rules for students, foster youth, and homeless youth. The territorial provisions may also be a point of interest because they extend federal tax benefits beyond the mainland tax system.