Tax Cut for Workers Act of 2025

Lower age requirements for the credit: The bill reduces the minimum age for the credit, setting it at 19 for most, 24 for students, and 18 for qualified former foster or homeless youth (Section 2(a)).

Increased access for students and vulnerable youth: By setting a minimum age of 24 for students and 18 for qualified former foster or homeless youth, the bill expands credit access for these groups (Section 2(a)).

Elimination of age limits: The bill removes the maximum age cap of 65, allowing older individuals to remain eligible for the credit (Section 2(b)).

Higher credit amounts: The bill increases credit and phaseout percentages from 7.65 to 15.3 (Section 2(c)).

Increased income thresholds: The bill raises the earned income and phaseout amounts, specifically increasing the $4,220 amount to $9,820 and the $5,280 amount to $11,610 (Section 2(d)).

Inflation protection: The bill implements inflation adjustments for various dollar amounts to account for economic changes (Section 2(e)).

Extended coverage for U.S. possessions: The bill makes certain provisions permanent for Puerto Rico, American Samoa, and other possessions with mirror code tax systems (Section 3).

Flexibility for taxpayers with lower income: Taxpayers whose current year income is less than the previous year can elect to use their prior year's earned income to determine their credit (Section 4(a)).