Three Democrats on the tax-writing House Ways and Means Committee have introduced legislation to expand the Earned Income Tax Credit, the American Opportunity Tax Credit and the Child Tax Credit.
One of the bills, the Earned Income Tax Credit Improvement and Simplification Act, introduced last week by Ways and Means Committee ranking member Richard Neal, D-Mass., would build on some of the enhancements to the EITC that were made permanent in 2015’s PATH Act. It would allow the EITC for an individual with no qualifying children if the taxpayer is between the ages of 21 and 25 and is not a full-time student.
The bill would allow families with children who do not have a valid Social Security Number to qualify for tax credits similar to the EITC for individuals with no qualifying children. It would also revise the credit eligibility rules for married individuals who are living apart and for qualifying children claimed by another family member. In addition, the bill would repeal provisions that would deny the credit to taxpayers who have excess investment income.
“My bill expands the EITC to apply to childless workers,” Neal said in a statement. “It would also simplify and improve other aspects of the EITC to improve support for working parents and adults.”
Another bill, the Expand American Educational Opportunity Act, sponsored by Ways and Means Tax Policy Subcommittee ranking member Lloyd Doggett, D-Texas, would increase the portion of the AOTC that is refundable and allow Pell Grant recipients to get its full benefit. The bill would also simplify the credit by eliminating the need for two separate higher education credits, while increasing the credit’s lifetime maximum limit.
“This legislation would strengthen and simplify the education credit, which already helps millions to pay for college,” Doggett said in a statement. “Better coordinating the credit with Pell Grants will provide greater support for those who need it most.”
A third bill, the Child Tax Credit Improvement Act, sponsored by Rep. Rosa DeLauro, D-Conn., would index the value of the Child Tax Credit with inflation and increase the value of the credit for families with young children under the age of six to $3,600 to help families maintain the purchasing power of the tax credit.
“The Child Tax Credit Improvement Act will help millions of families across the United States who are striving to provide the best possible future for their children,” DeLauro said in a statement. “The greatest economic challenge facing our country today is that Americans are working in jobs that just do not pay them enough, but we must do everything we can to ensure that families have the resources to succeed. Increasing the value of the Child Tax Credit for families with a child under the age of six has the potential to positively impact a child’s health, education and future.”
Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.