Tax Cut for Workers Act of 2025
Sen. Cortez Masto Introduces the Tax Cut for Workers Act to Double Tax Credits for Millions of Low-Wage Workers
The Tax Cut for Workers Act of 2025 is currently in the early stages of the legislative process. It was recently introduced in the Senate and sent to the Committee on Finance for review. The bill is actively moving forward as it waits for the committee to discuss its contents.
Part of: story →Legislative Progress
This bill is supported only by Democrats and Independents, making it very difficult to pass in a divided Congress where Republicans typically oppose expanding these types of tax credits.
Key Points
- This bill would permanently double the Earned Income Tax Credit rate for workers without children, increasing it from 7.65% to 15.3%. This means significantly larger tax refunds for millions of low-wage workers who file taxes each year.
From policy text
“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''.”
View in full text - The minimum age to claim the credit drops from 25 to 19 for most workers, to 18 for former foster youth and homeless youth, and to 24 for students. The maximum age cap of 65 is eliminated entirely, opening the credit to older workers for the first time.
- The bill more than doubles the earned income threshold for the full credit (from $4,220 to $9,820) and the phaseout amount (from $5,280 to $11,610), meaning workers can earn more and still qualify for a larger credit.
From policy text
“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''.”
View in full text - Workers who experience a drop in income can elect to use their prior year's earnings to calculate the credit, protecting people who lose hours or take a pay cut from also losing their tax benefit.
- The bill permanently extends the Earned Income Tax Credit to U.S. territories including Puerto Rico, American Samoa, and possessions with mirror code tax systems. A temporary provision set to expire after 2025 would become permanent.
From policy text
“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,''.”
View in full text - All changes would take effect for tax years beginning after December 31, 2025, meaning workers would first see the benefits when filing their 2026 tax returns.
From policy text
“The amendments made by this section shall apply to taxable years beginning after December 31, 2025.”
View in full text
Impact Analysis
Personal Impact
State Impacts
Milestones
Read twice and referred to the Committee on Finance.
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
2 articlesDurbin, Duckworth Join Introduction Of Legislation To Increase Value Of Tax Credits That Help Working Class Americans
Illinois Senators Durbin and Duckworth co-sponsored the Tax Cut for Workers Act of 2025. The bill targets working-class Americans without children, who currently receive a significantly smaller EITC, by nearly tripling the average tax break and expanding age eligibility.
BOOKER ANNOUNCES Keep Your Pay Act to Deliver Massive Tax Cut for Working Families
The 'Keep Your Pay Act' includes the Tax Cut for Workers Act as a core pillar. The bill focuses on delivering tax relief to workers without children by expanding EITC eligibility to those aged 19 to 24 and those 65 and above, while significantly increasing the credit's value.
Source Information
Document Type
Congressional Bill
Official Title
Tax Cut for Workers Act of 2025
Data Sources
Sponsor
Cosponsors
(44)Analysis generated by AI. Always verify with official sources.