119-hr2338

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2338 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2338

 To amend the Internal Revenue Code of 1986 to expand and improve the 
 earned income tax credit.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 March 25, 2025

 Ms. Moore of Wisconsin (for herself, Ms. Chu, Mr. Davis of Illinois, 
Mr. Gomez, Ms. Pingree, Ms. Norton, Ms. Tlaib, Ms. Scanlon, Mr. Khanna, 
 and Ms. Jayapal) introduced the following bill; which was referred to 
 the Committee on Ways and Means

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to expand and improve the 
 earned income tax 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 ``Worker Relief and Credit Reform Act 
of 2025'' or as the ``WRCR Act of 2025''.

SEC. 2. EXPANSION AND IMPROVEMENT OF EARNED INCOME TAX CREDIT.

    (a) Application to Students.--

    (1) In general.--

Section 32
            (c) (1)
        (A)
            (i) of the Internal 
 Revenue Code of 1986 is amended by inserting ``who is a 
 qualifying student or'' after ``any individual''.

    (2) Qualifying student.--

Section 32
            (c) of such Code is 
 amended by redesignating paragraph

    (4) as paragraph

    (5) and 
 inserting after paragraph

    (3) the following new paragraph:
 ``

    (4) Qualifying student.--
 ``
        (A) In general.--The term `qualifying student' 
 means, with respect to any taxable year, any individual 
 who--
 ``
            (i) is an eligible student (as defined in 
 

section 25A

    (b)

    (3) ) with respect to at least one 
 academic period beginning during such taxable 
 year,
 ``
            (ii) either--
 ``
            (I) qualifies for a Federal Pell 
 Grant with respect to such academic 
 period, or
 ``
            (II) meets the requirements of 
 subparagraph
        (B) or
            (C) for the taxable 
 year, and
 ``
            (iii) is not a dependent for whom a 
 deduction is allowable under 

section 151 to 
 another taxpayer for any taxable year beginning 
 in the same calendar year as such taxable year.
 ``
        (B) Independent students.--In the case of any 
 independent student, the requirements of this 
 subparagraph are met for such taxable year if the 
 household income of the taxpayer is less than 300 
 percent of the poverty line for the size of the family 
 involved for the taxable year.
 ``
            (C) Other students.--
 ``
            (i) In general.--In the case of any 
 individual who is not an independent student, 
 the requirements of this subparagraph are met 
 for such taxable year if the aggregate 
 household incomes of all the individual's 
 specified supporters (and the taxpayer if not 
 otherwise taken into account) for the taxable 
 years of such supporters which end in or with 
 the calendar year in which such individual's 
 taxable year begins is less than 300 percent of 
 the poverty line for the size of the family 
 involved (determined on a single aggregate 
 basis) for the taxable year.
 ``
            (ii) Specified supporter.--The term 
 `specified supporter' means, with respect to 
 any individual described in clause
            (i) , any 
 taxpayer with respect to whom such individual 
 was a dependent for any taxable year ending in 
 the 3-year period described in subparagraph
            (D) 
            (i) .
 ``
            (D) Independent student defined.--
 ``
            (i) In general.--The term `independent 
 student' means any individual if such 
 individual was not a dependent of another 
 taxpayer for any taxable year ending in the 3-
 year period which ends on the first day of the 
 first academic period with respect to which 
 such individual is an eligible student (as 
 defined in 

section 25A

    (b)

    (3) ).
 ``
            (ii) Certain academic periods 
 disregarded.--An academic period shall be 
 disregarded under clause
            (i) if such academic 
 period ends more than 2 years before the 
 beginning of the next academic period with 
 respect to which the individual is an eligible 
 student (as defined in 

section 25A

    (b)

    (3) ).
 ``
        (E) Other 

=== definitions. ===
-
 ``
            (i) Household income.--The term 
 `household income' has the meaning given such 
 term in 

section 36B
            (d) (2) .
 ``
            (ii) Poverty line.--The term `poverty 
 line' has the meaning given such term in 
 

section 36B
            (d) (3)
        (A) .
 ``
            (iii) Family size.--The family size 
 involved with respect to any taxpayer shall be 
 determined under rules similar to the rules of 
 

section 36B
            (d) (1) .''.

    (3) Conforming amendment.--

Section 32
            (c) (1)
        (A)
            (ii) of such 
 Code is amended by striking ``any other individual who does not 
 have a qualifying child'' and inserting ``any individual not 
 described in clause
            (i) ''.

    (b) Modification of Age Requirements.--

Section 32
            (c) (1)
        (A)
            (ii) 
            (II) of such Code is amended by striking ``has attained age 25 but not 
attained age 65'' and inserting ``has attained age 18''.
            (c) Care-Giving and Learning Taken Into Account as Compensated 
Work.--

Section 32

    (a) of such Code is amended by adding at the end the 
following new paragraph:
 ``

    (3) Special rule for qualifying students and certain 
 individuals with one or more qualifying dependents.--For 
 purposes of paragraph

    (1) , any individual--
 ``
        (A) who is a qualifying student, or
 ``
        (B) who has a qualifying dependent,
 shall be treated as having earned income for the taxable year 
 which is equal to the earned income amount with respect to such 
 individual for such taxable year.''.
            (d) Treatment of Certain Qualifying Relatives.--

    (1) In general.--

Section 32
            (c) (3) of such Code is amended 
 by striking all that precedes subparagraph
        (B) and inserting 
 the following:
 ``

    (3) Qualifying dependent.--
 ``
        (A) In general.--The term `qualifying dependent' 
 means--
 ``
            (i) a qualifying child of the taxpayer, 
 as defined in 

section 152
            (c) , determined--
 ``
            (I) by substituting `12' for `19' 
 in paragraph

    (3)
        (A)
            (i) thereof, and
 ``
            (II) without regard to paragraphs

    (1)
            (D) and

    (3)
        (A)
            (ii) thereof and 
 

section 152

    (e) ,
 ``
            (ii) any individual who is physically or 
 mentally incapable of caring for himself or 
 herself (within the meaning of 

section 21

    (b)

    (1) ) and who--
 ``
            (I) is the taxpayer's spouse, or
 ``
            (II) is a qualifying relative of 
 the taxpayer, as defined in 

section 152
            (d) , determined without regard to 
 paragraph

    (1)
        (B) thereof and by 
 treating an individual as a qualifying 
 child of the taxpayer for purposes of 
 paragraph

    (1)
            (D) thereof only if such 
 individual is a qualifying child of the 
 taxpayer as determined under clause
            (i) of this subparagraph, or
 ``
            (iii) any qualifying relative of the 
 taxpayer (as defined in 

section 152
            (d) , 
 determined without regard to paragraph

    (1)
        (B) thereof) who has attained age 65 as of the 
 close of the calendar year in which the taxable 
 year of the taxpayer begins.
 For purposes of determining if any individual is a 
 qualifying relative of the taxpayer under clause
            (ii) 
            (II) or
            (iii) , 

section 152
            (d) (1)
            (C) shall be 
 applied by not taking into account any benefits 
 received by such individual pursuant to any Federal 
 program (or any State or local program financed in 
 whole or in part with Federal funds) related to 
 retirement (including social security benefits), 
 disability, health care, cash aid, child care, food 
 assistance, housing and development, social services, 
 employment and training, or energy assistance.''.

    (2) Conforming amendments.--
        (A) Section 32
            (c) (1)
        (A)
            (i) of such Code is amended 
 by striking ``qualifying child'' and inserting 
 ``qualifying dependent''.
        (B) Section 32
            (c) (1)
        (B) of such Code is amended--
            (i) by striking ``qualifying child'' and 
 inserting ``qualifying dependent'', and
            (ii) by striking ``child'' in the heading 
 and inserting ``dependent''.
            (C) Section 32
            (c) (3)
            (D) 
            (i) of such Code is amended 
 by striking ``qualifying child'' both places it appears 
 and inserting ``qualifying dependent''.

    (e) Modification of Percentages and Amounts.--

    (1) 100 percent credit percentage.--Paragraph

    (1) and 
 paragraph

    (2)
        (A) of 

section 32

    (a) of such Code are each amended 
 by striking ``the credit percentage of''.

    (2) 20 percent phaseout percentage.--

Section 32

    (a)

    (2)
        (B) of 
 such Code is amended by striking ``the phaseout percentage'' 
 and inserting ``20 percent''.

    (3) Modification of earned income and phaseout amounts.--
 

Section 32

    (b) of such Code is amended to read as follows:
 ``

    (b) Earned Income Amount; Phaseout Amount.--For purposes of this 
section--
 ``

    (1) Earned income amount.--The term `earned income 
 amount' means $4,000 (twice such amount in the case of a joint 
 return).
 ``

    (2) Phaseout amount.--The term `phaseout amount' means 
 $30,000 ($50,000 in the case of a joint return).
 ``

    (3) Inflation adjustment.--In the case of any taxable 
 year beginning after 2025, the $4,000 amount in paragraph

    (1) and each dollar amount in paragraph

    (2) shall be increased by 
 an amount equal to--
 ``
        (A) such dollar amount, multiplied by
 ``
        (B) the cost-of-living adjustment determined 
 under 

section 1

    (f)

    (3) for the calendar year in which 
 the taxable year begins, determined by substituting 
 `2024' for `2016' in subparagraph
        (A)
            (ii) thereof.
 If any increase under the preceding sentence is not a multiple 
 of $50, such increase shall be rounded to the next lowest 
 multiple of $50.''.

    (4) Conforming amendments.--
        (A) Section 32
            (i) of such Code is amended by adding 
 at the end the following new paragraph:
 ``

    (3) Inflation adjustment.--
 ``
        (A) In general.--In the case of any taxable year 
 beginning after 2021, the $10,000 amount in subsection
            (i) (1) shall be increased by an amount equal to--
 ``
            (i) such dollar amount, multiplied by
 ``
            (ii) the cost-of-living adjustment 
 determined under 

section 1

    (f)

    (3) for the 
 calendar year in which the taxable year begins, 
 determined by substituting `2020' for `2016' in 
 subparagraph
        (A)
            (ii) thereof.
 ``
        (B) Rounding.--If any increase under subparagraph
        (A) is not a multiple of $50, such increase shall be 
 rounded to the next lowest multiple of $50.''.
        (B) Section 32 of such Code is amended by striking 
 subsection

    (j) .

    (f) Increased Credit for Certain Unmarried Individuals With 2 or 
More Qualifying Children.--

    (1) In general.--

Section 32 of such Code is amended by 
 inserting after subsection

    (f) the following new subsection:
 ``

    (g) Increased Credit for Certain Unmarried Individuals With 2 or 
More Qualifying Children.--
 ``

    (1) In general.--In the case of a qualified individual, 
 the amount of the credit otherwise determined under subsection

    (a) shall be increased by the amount of the credit determined 
 under this section as such section was in effect for taxable 
 years beginning in 2018 but with the modifications described in 
 paragraph

    (2) .
 ``

    (2) Modifications.--Solely for purposes of determining 
 the increase under paragraph

    (1) --
 ``
        (A) Credit percentage.--The credit percentage 
 shall be equal to--
 ``
            (i) in the case of a qualified individual 
 with 2 qualifying children, 12.5 percent, and
 ``
            (ii) in the case of a qualified 
 individual with 3 or more qualifying children, 
 18.75 percent.
 ``
        (B) Phaseout percentage.--The phaseout percentage 
 shall be equal to 5 percent.
 ``
            (C) Application of inflation adjustment.--

Section 32

    (j) as in effect for taxable years beginning in 2018 
 shall be applied by taking into account the taxable 
 year for which the increase under paragraph

    (1) is 
 determined.
 ``

    (3) Qualified individual.--For purposes of this 
 subsection, the term `qualified individual' means any 
 individual who--
 ``
        (A) is not married (as determined under 

section 7703), and
 ``
        (B) has 2 or more qualifying children.
 ``

    (4) Qualifying child.--For purposes of this subsection, 
 the term `qualifying child' means a child described in 
 subsection
            (c) (3)
        (A)
            (i) determined without regard to subclause
            (I) thereof.''.

    (g) Advance Payment.--

    (1) In general.--Chapter 77 of such Code is amended by 
 adding at the end the following new section:

``

SEC. 7531. ADVANCE PAYMENT OF EARNED INCOME CREDIT; EARNED INCOME 
 SAVINGS ACCOUNTS.

 ``

    (a) In General.--Not later than the date that is 2 years after 
the date of the enactment of this section, the Secretary shall 
establish a program for making direct advance monthly payments of the 
credit allowable under 

section 32 to taxpayers who elect to receive 
such payments.
 ``

    (b) Limitation.--The aggregate monthly payments made under 
subsection

    (a) with respect to any taxpayer for any taxable year shall 
not exceed 75 percent of the estimated amount of the credit allowable 
under 

section 32 to such taxpayer for such taxable year.
 ``
            (c) Election.--The election under subsection

    (a) may be made or 
changed for subsequent periods at any time during the taxable year. In 
the case of an election made after the beginning of a taxable year, the 
monthly advance payments shall be made for months beginning after the 
date that such election becomes effective and the total amount of 
advance payments (subject to the limitation of subsection

    (b) ) shall be 
prorated among the remaining months.
 ``
            (d) Method of Payment.--The program established under subsection

    (a) shall include an option for taxpayers to elect to receive payments 
under such program by prepaid debit card.
 ``

    (e) Reports to Taxpayers.--
 ``

    (1) In general.--With respect to payments made under this 
 section for any calendar year, not later than January 31 of the 
 following calendar year, the Secretary shall issue a statement 
 to each individual with respect to whom payments were made 
 under this section setting forth--
 ``
        (A) the name, address, and TIN of such person,
 ``
        (B) the aggregate amount of payments made under 
 this section with respect to such person for such 
 calendar year,
 ``
            (C) a statement that such individual is required 
 to file a return of tax with respect to taxable years 
 which include any portion of such calendar year 
 regardless of whether such individual has income tax 
 liability with respect to such taxable years, and
 ``
            (D) such other information as the Secretary may 
 provide.
 ``

    (2) Election to receive statement through on-line 
 portal.--A taxpayer may elect to receive the statement 
 described in paragraph

    (1) through the on-line portal described 
 in subsection

    (f) .
 ``

    (f) Recapture of Excess Payments.--If the aggregate payments made 
to any taxpayer under subsection

    (a) with respect to any taxable year 
exceed the credit allowable under 

section 32 (determined without regard 
to subsection

    (h) thereof) with respect to such taxpayer for such 
taxable year, the tax imposed by chapter 1 with respect to such 
taxpayer for such taxable year shall be increased by such excess.
 ``

    (g) Restriction on Allowance of Advance Payment if Excess 
Payments Not Repaid.--In the case of a taxpayer who fails to pay any 
tax liability which includes an increase determined under subsection

    (f) before the date on which payment of such tax is due, no payment 
shall be made under subsection

    (a) to such taxpayer during the period 
beginning on such date and ending with the end of the 2-year period 
which begins on the date that such tax liability (and any interest or 
penalties in connection with such liability) has been paid in full.''.

    (2) Coordination with credit.--

Section 32 of such Code, as 
 amended by subsection

    (f) , is amended by inserting after 
 subsection

    (g) the following new subsection:
 ``

    (h) Coordination With Advance Payment of Credit.--With respect to 
any taxable year, the amount which would (but for this subsection) be 
allowed as a credit to the taxpayer under this section shall be reduced 
(but not below zero) by the aggregate payments made under 

section 7531 
to such taxpayer for such taxable year.''.

    (3) One-on-one consultations.--The Secretary of the 
 Treasury (or the Secretary's delegate) shall ensure that in-
 person, telephonic, and virtual one-on-one consultations 
 between taxpayers and the Internal Revenue Service are 
 available to assist taxpayers at all times during regular 
 business hours (and, in the case of in-person consultations, at 
 all taxpayer assistance centers of the Internal Revenue 
 Service) in determining--
        (A) their eligibility for the advance payment 
 program established under 

section 7531,
        (B) the amount of the monthly payment for which the 
 taxpayer is eligible under such program,
            (C) the circumstances or changes in circumstances 
 which, based on the particular characteristics of such 
 taxpayer, are most likely to result in excess payments 
 to such taxpayer which would be subject to recapture 
 under 

section 7531

    (f) , and
            (D) such other matters as such Secretary or 
 delegate determines appropriate.

    (4) On-line portal.--The Secretary of the Treasury (or the 
 Secretary's delegate) shall establish an on-line portal which 
 allows taxpayers to--
        (A) elect to receive advance monthly payments under 
 

section 7531, including determining the estimated 
 amount described in subsection

    (b) of such section and 
 determining the amount of such monthly payments,
        (B) report changes in circumstances and modify the 
 amount of future advance monthly payments under such 
 section, and
            (C) stop future advance monthly payments under such 
 section and pay back any advance monthly payments.

    (5) Clerical amendment.--The table of sections for chapter 
 77 of such Code is amended by adding at the end the following 
 new item:

``

Sec. 7531. Advance payment of earned income credit; earned income 
 savings accounts.''.

    (h) Outreach Pilot Program.--

    (1) In general.--Not later than 1 year after the date of 
 the enactment of this Act, the Secretary of the Treasury (or 
 the Secretary's designee) shall establish a program to educate 
 taxpayers regarding the availability of the earned income tax 
 credit and the advance monthly payments of such credit. 
 Pursuant to such program--
        (A) EITC educational letters.--The Secretary (or 
 designee) shall provide a written notice describing the 
 earned income tax credit, the qualifications for 
 receiving such credit, and the program for the advance 
 payment of such credit to each taxpayer that the 
 Secretary (or designee) determines is likely to qualify 
 for such credit.
        (B) District office workshops.--Each district 
 office of the Internal Revenue Service shall provide 
 workshops and seminars to assist and educate taxpayers 
 regarding the earned income tax credit and the program 
 to provide advance monthly payments of such credit.
            (C) Quarterly reminders.--The Internal Revenue 
 Service shall provide written reminders each calendar 
 quarter to taxpayers participating in the program to 
 provide advance monthly payments of the earned income 
 tax credit that the amount of such payments are 
 determined on the basis of estimates based on 
 information previously provided by the taxpayer, that 
 the taxpayer is responsible for repaying any amounts 
 received that are in excess of the actual amount of the 
 earned income tax credit, and that the taxpayer should 
 review all the facts and circumstances that may affect 
 the amount of the earned income tax credit of the 
 taxpayer which the taxpayer is receiving in advance.

    (2) Termination.--The program established under paragraph

    (1) shall terminate at the close of the 10-year period 
 beginning on the date that such program is established by the 
 Secretary (or designee).

    (3) Report on effectiveness of program.--On the date which 
 is 5 years after the establishment of the program under 
 paragraph

    (1) , the Secretary shall submit to Congress a report 
 evaluating the effectiveness of the program, including a 
 detailed examination of the effectiveness of each of the 
 initiatives described in subparagraphs
        (A) ,
        (B) , and
            (C) of 
 paragraph

    (1) .
            (i) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
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