Bill · H.R. 905· House(119-HR-905)
EITC Modernization Act
- Introduced
- 1/31/2025
- Last activity
- 1/31/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Bonnie Watson Coleman
- Cosponsors
- - 17 - 0
- Introduced
- In Committee
What this bill would do
The EITC Modernization Act aims to amend the Internal Revenue Code of 1986 to expand the earned income tax credit. It extends the credit to all taxpayers with dependents, including aged dependents, and to qualifying students. The bill also establishes a minimum credit amount for students and certain dependents. Additionally, it introduces an option for monthly payments of the credit rather than a single lump sum. Finally, the legislation creates a matching grant program to support tax return preparation services for low-income and underserved populations.
Yes· 3 of 12
Would households on low incomes be better off under this?+7
The bill expands the EITC, establishes minimum credit amounts for students, and funds tax preparation assistance for low-income taxpayers.
Would students be better off under this?+6
The bill extends the earned income tax credit to qualifying students and establishes a minimum credit of $1,200 for them.
Is this likely to lift people out of poverty?+6
The bill expands the EITC to include students and aged dependents, which directly increases the income of low-income households.
The opposite
Does this reduce what the federal government spends?-3
The bill increases government spending through expanded tax credits and new grant programs for tax preparation.
Who it would affect, and how
Potential Positive Impacts for People
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Expanded Tax Credit Access: The bill expands the earned income tax credit to include taxpayers with "qualifying dependents," which includes "aged dependents" (those 65 or older) and other qualifying individuals (Section 3, subsection a).
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Support for Students: The credit is extended to "qualifying students," which includes individuals who are eligible students at an institution of higher education and meet specific income or Pell Grant requirements (Section 3, subsection b).
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Guaranteed Minimum Credit: A minimum credit of $1,200 is established for qualifying students and individuals with certain qualifying dependents (Section 3, subsection c).
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Increased Cash Flow Options: Taxpayers may elect to receive their credit through monthly payments rather than a single refund, which can include a one-time higher initial payment (Section 3, subsection d).
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Adjustments for New Parents: The bill provides a special rule to adjust monthly payments for new low-income parents when a qualifying child is born or adopted (Section 3, subsection e).
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Enhanced Tax Preparation Assistance: The creation of the Community Volunteer Income Tax Assistance Matching Grant Program provides funds for the development and expansion of return preparation programs for low-income and underserved populations (Section 4, subsection a).
Potential Negative Impacts for People
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Strict Identification Requirements: To receive the credit for a qualifying dependent, taxpayers are required to include the name, age, and TIN of that individual on their tax return (Section 3, subsection a).
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Residency Restrictions: A qualifying dependent must have a principal place of abode in the United States for more than one-half of the taxable year to be eligible (Section 3, subsection a).
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Grant Limitations: The matching grant program for tax preparation assistance is subject to the availability of appropriated funds and is limited to a maximum of $30,000,000 per fiscal year (Section 4, subsections a and f).
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Accuracy Requirements for Programs: Programs receiving grants that fail to maintain a 90 percent average accuracy rate for tax return preparation may be ineligible for additional grants until corrective measures are documented (Section 4, subsection d).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Low Income Households+7Good For Students+6Good For Children+5Good For Seniors+5Good For Native Americans+4Good For Rural Residents+4Good For Middle Class Households+3
- Social Issues And Justice
- Improves Poverty Reduction+6
- Economy And Finance
- Reduces Middle Class Taxes+5Improves Economic Growth+3Reduces Government Spending-3
- Education And Technology
- Improves College Affordability+4
- Governance And Ideology
- Improves Government Transparency+2
- 2/25/2025
- 1 Cosponsor added.
- 1/31/2025
- Referred to the House Committee on Ways and Means.
- 16 Cosponsors added.
- Introduced in House
Yassamin AnsariDemocrat · Arizona
Sanford BishopDemocrat · Georgia
Shontel BrownDemocrat · Ohio
Yvette ClarkeDemocrat · New York
Sheila Cherfilus-McCormickDemocrat · Florida
Valerie FousheeDemocrat · North Carolina
Jahana HayesDemocrat · Connecticut
Henry JohnsonDemocrat · Georgia
Sydney Kamlager-DoveDemocrat · California
Kweisi MfumeDemocrat · Maryland
Jennifer McClellanDemocrat · Virginia
LaMonica McIverDemocrat · New Jersey
Kristen McDonald RivetDemocrat · Michigan
Eleanor NortonDemocrat · District of Columbia
Bennie ThompsonDemocrat · Mississippi
Jill TokudaDemocrat · Hawaii
Frederica WilsonDemocrat · Florida