H.R. 2764: Tax Cut for Workers Act of 2025

HR2764, the Tax Cut for Workers Act of 2025, would permanently extend and expand the Earned Income Credit for workers without qualifying children starting with taxable years beginning after December 31, 2025. The bill lowers the general minimum age for this credit to 19, sets it at 24 for students as defined in section 152(f)(2), and sets it at 18 for qualified former foster youth and qualified homeless youth. It also removes the old maximum age cap of 65, opening the credit to older workers who were previously shut out.

The bill also makes the childless worker credit much larger. It raises both the credit percentage and the phaseout percentage from 7.65% to 15.3%. It increases the earned income amount from $4,220 to $9,820 and the phaseout amount from $5,280 to $11,610. Those are not minor tweaks — they significantly increase the value of the credit and allow workers to earn more before the benefit phases down.

HR2764 also makes permanent the Earned Income Credit rules that apply in Puerto Rico, American Samoa, and U.S. possessions with mirror code tax systems by removing a sunset that had limited that treatment to calendar years 2021 through 2025. On top of that, it lets taxpayers use their prior year's earned income if their current year's earned income is lower, which can help workers whose hours were cut or whose jobs changed. For joint returns, the prior-year amount is the sum of each spouse's earned income from that preceding year.

The bill includes enforcement teeth, though not a new dollar penalty. If a taxpayer wrongly uses prior-year earned income, the IRS can treat that mistake as a mathematical or clerical error under section 6213 of the Internal Revenue Code, which can speed up corrections. The bill also says this prior-year substitution only applies to calculating the Earned Income Credit and does not change gross income or other tax rules. Inflation adjustments are preserved with specific base years, including 2025 for the third row of the table in section 32(b)(2)(A), 1995 for other amounts in that table, 2008 for the $5,000 amount in section 32(b)(2)(B), and 2020 for the $10,000 amount in section 32(i)(1).