Tax Cut for Workers Act of 2025

Key Points

• The bill permanently expands the Earned Income Tax Credit (EITC) for workers without qualifying children, making temporary pandemic-era improvements a lasting part of the tax code starting in 2026.
• The minimum age to claim the credit drops from 25 to 19 for most workers, to 24 for students, and to 18 for former foster youth and homeless youth. The maximum age cap of 65 is eliminated entirely.
• The credit percentage doubles from 7.65% to 15.3%, and the earned income threshold more than doubles from $4,220 to $9,820, significantly increasing the maximum credit available to childless workers.
• Workers who had a drop in income can elect to use the prior year's earnings to calculate their credit, protecting people who lost a job or had their hours cut from getting a smaller refund.
• The bill extends these EITC benefits permanently to U.S. territories including Puerto Rico, American Samoa, and possessions with mirror code tax systems, removing the 2025 expiration date.
• All changes take effect for tax years beginning after December 31, 2025, with built-in inflation adjustments so the credit keeps pace with rising costs over time.