[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2927 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2927
To amend the Internal Revenue Code of 1986 to increase the earned
income tax credit, child tax credit, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 17, 2025
Mrs. Cherfilus-McCormick (for herself, Mrs. McIver, Mr. Johnson of
Georgia, and Ms. Tlaib) 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 increase the earned
income tax credit, child tax credit, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``All-Americans Tax
Relief Act of 2025''.
(b) References.--Except as otherwise expressly provided, whenever
in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; references; table of contents.
Sec. 2. Expansion of earned income tax credit.
Sec. 3. Child tax credit made fully refundable.
Sec. 4. Medical expenses deduction expanded and allowed to non-
itemizers.
Sec. 5. Deduction for daycare expenses.
Sec. 6. Commuting expense deduction.
Sec. 7. Tutoring expenses deduction.
Sec. 8. Exclusion of interest payments on credit card debt.
Sec. 9. Rent deduction for primary residence.
Sec. 10. Exclusion of discharge of indebtedness.
Sec. 11. Increase in capital gains rate.
SEC. 2. EXPANSION OF EARNED INCOME TAX CREDIT.
(a) Decrease in Phaseout Percentage.--Section 32(b)(1) is amended
to read as follows:
``(1) Percentages.--The credit percentage and phaseout
percentage shall be determined as follows:
----------------------------------------------------------------------------------------------------------------
The credit
``In the case of an eligible individual percentage The phaseout percentage is:
with: is:
----------------------------------------------------------------------------------------------------------------
1 qualifying child......................... 38 20
2 qualifying children...................... 43 25
3 or more qualifying children.............. 45 25
No qualifying children..................... 30 (35 in 15''.
the case of
a joint
return)
----------------------------------------------------------------------------------------------------------------
(b) Increase in Maximum Credit Amount.--Section 32(b)(2) is amended
to read as follows:
``(2) Amounts.--
``(B) Earned income amount.--The term `earned
income amount' means--
``(i) in the case of an eligible individual
with 1 qualifying child, $15,000,
``(ii) in the case of an individual with 2
or more qualifying children, $20,000, or
``(iii) in the case of an individual with
no children--
``(I) in the case of a joint
return, $10,000, or
``(II) in the case of any other
individual, $8,500.
``(C) Phaseout amount.--The phaseout amount shall
be--
``(i) $47,120 in the case of a joint
return, or
``(ii) $40,000 in the case of any other
individual.''.
(c) Conforming Amendment.--Section 32(j)(1) is amended to read as
follows:
``(1) In general.--In the case of any taxable year
beginning after 2027 (2021 in the case of the dollar amount in
subsection (i)(1)), each of the dollar amounts in subsections
(b)(2) and (i)(1) 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 in
subparagraph (A)(ii) thereof--
``(i) in the case of amounts in subsection
(b)(2), `calendar year 2026' for `calendar year
2016', and
``(ii) in the case of the $10,000 amount in
subsection (i)(1), `calendar year 2020' for
`calendar year 2016'.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 3. CHILD TAX CREDIT MADE FULLY REFUNDABLE.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of subtitle A is amended by inserting after section 36B the following
new section:
``SEC. 36D. CHILD TAX CREDIT.
``(a) Allowance of Credit.--
``There shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal to
the sum of--
``(1) $2,000 for each of up to 3 qualifying children of the
taxpayer for which the taxpayer is allowed a deduction under
section 151, plus
``(2) $500 for each other such qualifying child of the
taxpayer.
``(b) Limitations.--
``(1) Limitation based on adjusted gross income.--
``The amount of the credit allowable under
subsection (a) shall be reduced (but not below zero) by
$50 for each $1,000 (or fraction thereof) by which the
taxpayer's modified adjusted gross income exceeds the
threshold amount. For purposes of the preceding
sentence, the term `modified adjusted gross income'
means adjusted gross income increased by any amount
excluded from gross income under section 911, 931, or
933.
``(2) Threshold amount.--For purposes of paragraph (1), the
term `threshold amount' means--
``(A) $110,000 in the case of a joint return,
``(B) $75,000 in the case of an individual who is
not married, and
``(C) $55,000 in the case of a married individual
filing a separate return.
For purposes of this paragraph, marital status shall be
determined under section 7703.
``(c) Qualifying Child.--For purposes of this section--
``(1) In general.--
``The term `qualifying child' means a qualifying
child of the taxpayer (as defined in section 152(c))
who has not attained age 17.
``(2) Exception for certain noncitizens.--
``The term `qualifying child' shall not include any
individual who would not be a dependent if subparagraph
(A) of section 152(b)(3) were applied without regard to
all that follows `resident of the United States'.
``(d) Social Security Number Required.--No credit shall be allowed
under this section to a taxpayer with respect to any qualifying child
unless the taxpayer includes the social security number of the taxpayer
(and the taxpayer's spouse, in the case of a joint return) and of such
child on the return of tax for the taxable year. For purposes of the
preceding sentence, the term `social security number' means a social
security number issued to an individual by the Social Security
Administration, but only if the social security number is issued--
``(1) to a citizen of the United States or pursuant to
subclause (I) (or that portion of subclause (III) that relates
to subclause (I)) of section 205(c)(2)(B)(i) of the Social
Security Act, and
``(2) before the due date for such return.
``(e) Taxable Year Must Be Full Taxable Year.--
``Except in the case of a taxable year closed by reason of
the death of the taxpayer, no credit shall be allowable under
this section in the case of a taxable year covering a period of
less than 12 months.
``(f) Restrictions on Taxpayers Who Improperly Claimed Credit in
Prior Year.--
``(1) Taxpayers making prior fraudulent or reckless
claims.--
``(A) In general.--
``No credit shall be allowed under this
section for any taxable year in the
disallowance period.
``(B) Disallowance period.--For purposes of
subparagraph (A), the disallowance period is--
``(i) the period of 10 taxable years after
the most recent taxable year for which there
was a final determination that the taxpayer's
claim of credit under this section was due to
fraud, and
``(ii) the period of 2 taxable years after
the most recent taxable year for which there
was a final determination that the taxpayer's
claim of credit under this section was due to
reckless or intentional disregard of rules and
regulations (but not due to fraud).
``(2) Taxpayers making improper prior claims.--
``In the case of a taxpayer who is denied credit
under this section for any taxable year as a result of
the deficiency procedures under subchapter B of chapter
63, no credit shall be allowed under this section for
any subsequent taxable year unless the taxpayer
provides such information as the Secretary may require
to demonstrate eligibility for such credit.
``(g) Application of Credit in Possessions.--
``(1) Mirror code possessions.--
``(A) In general.--
``The Secretary shall pay to each
possession of the United States with a mirror
code tax system amounts equal to the loss (if
any) to that possession by reason of the
application of this section (determined without
regard to this subsection) with respect to
taxable years beginning after 2020. Such
amounts shall be determined by the Secretary
based on information provided by the government
of the respective possession.
``(B) Coordination with credit allowed against
united states income taxes.--
``No credit shall be allowed under this
section for any taxable year to any individual
to whom a credit is allowable against taxes
imposed by a possession of the United States
with a mirror code tax system by reason of the
application of this section in such possession
for such taxable year.
``(C) Mirror code tax system.--
``For purposes of this paragraph, the term
`mirror code tax system' means, with respect to
any possession of the United States, the income
tax system of such possession if the income tax
liability of the residents of such possession
under such system is determined by reference to
the income tax laws of the United States as if
such possession were the United States.
``(2) Puerto rico.--The credit determined under this
section shall be allowable to any bona fide resident of Puerto
Rico (within the meaning of section 937(a)).
``(3) American samoa.--
``(A) In general.--
``The Secretary shall pay to American Samoa
amounts estimated by the Secretary as being
equal to the aggregate benefits that would have
been provided to residents of American Samoa by
reason of the application of this section for
taxable years beginning after 2020 if the
provisions of this section had been in effect
in American Samoa (applied as if American Samoa
were the United States and without regard to
the application of this section to bona fide
residents of Puerto Rico under subsection
(i)(1)).
``(B) Distribution requirement.--
``Subparagraph (A) shall not apply unless
American Samoa has a plan, which has been
approved by the Secretary, under which American
Samoa will promptly distribute such payments to
its residents.
``(C) Coordination with credit allowed against
united states income taxes.--
``(i) In general.--
``In the case of a taxable year
with respect to which a plan is
approved under subparagraph (B), this
section (other than this subsection)
shall not apply to any individual
eligible for a distribution under such
plan.
``(ii) Application of section in event of
absence of approved plan.--In the case of a
taxable year with respect to which a plan is
not approved under subparagraph (B) rules
similar to the rules of paragraph (2)(B) shall
apply with respect to bona fide residents of
American Samoa (within the meaning of section
937(a)).
``(4) Treatment of payments.--
``For purposes of section 1324 of title 31, United
States Code, the payments under this subsection shall
be treated in the same manner as a refund due from a
credit provision referred to in subsection (b)(2) of
such section.
``(h) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after 2025, the dollar amounts in subsections (a) and
(b) 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
`calendar year 2024' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--If any increase under paragraph (1) is not
a multiple of $50, such increase shall be rounded to the
nearest multiple of $50.''.
(b) Clerical Amendment.--The table of sections for subpart C of
part IV of subchapter A of chapter 1 of subtitle A is amended by
inserting after the item relating to section 36B the following new
section:
``Sec. 36D. Child tax credit.''.
(c) Conforming Amendments.--
(1) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of subtitle A is amended by striking
the item relating to section 24.
(2) Section 26(b)(2) is amended by inserting ``and'' after
the comma in subparagraph (X), by striking ``, and'' at the end
of subparagraph (Y), and by striking subparagraph (Z).
(3) Section 45R(f)(3)(B) is amended by inserting ``(as in
effect on the day before the date of the enactment of the [All-
Americans Tax Relief Act of 2025])'' after ``section
24(d)(2)(C)''.
(4) Section 48D(d)(4) is amended by striking ``section
24(k)'' and inserting ``section 36D(j)''.
(5) Section 152(f)(6)(B)(ii) is amended by striking
``section 24'' and inserting ``section 36D''.
(6) Section 501(c)(26) is amended by striking ``section
24(c)'' in the matter following subparagraph (D) and inserting
``section 36D(c)''.
(7) Section 3402(f)(1)(C) is amended by striking ``section
24 (determined after application of subsection (j) thereof)''
and inserting ``section 36D''.
(8) Section 6103(l)(13)(A)(v) is amended by striking
``section 24'' and inserting ``section 36D''.
(9) Section 6213(g)(2) is amended--
(A) in subparagraph (I), by striking ``section
24(e)'' and inserting ``section 36D(d)'',
(B) in subparagraph (L), by striking ``24, 32'' and
inserting ``32, 36D'', and
(C) in subparagraph (P), by striking ``section
24(g)(2) or an entry on the return claiming the credit
under section 24'' and inserting ``section 36D(f)(2) or
an entry on the return claiming the credit under
section 36D''.
(10) Section 6402(m) is amended by striking ``section 24
(by reason of subsection (d) thereof)'' and inserting ``section
36D''.
(11) Section 6417(f) is amended by striking ``section
24(k)'' and inserting ``section 36D(h)''.
(12) Subchapter B of chapter 65 of subtitle F is amended by
repealing sections 6428, 6428A, 6428B, and 6429 and the table
of sections for such subchapter is amended by striking the
items relating to such sections.
(13) Section 6695(g)(2) is amended by striking ``section
24, 25A(a)(1), or 32'' and inserting ``section 25A(a)(1), 32,
or 36D''.
(14) Chapter 77 of subtitle F is amended by repealing
section 7527A and the table of sections for such chapter is
amended by striking the item relating to such section.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 4. MEDICAL EXPENSES DEDUCTION EXPANDED AND ALLOWED TO NON-
ITEMIZERS.
(a) Threshold Removed.--Section 213(a) is amended by striking ``,
to the extent'' and all that follows through ``gross income''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) is amended
by striking ``and'' at the end of paragraph (3), by striking the period
at the end of paragraph (4) and inserting ``, and'', and by adding at
the end the following new paragraph:
``(5) the deduction provided in section 213.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 5. DEDUCTION FOR DAYCARE EXPENSES.
(a) In General.--Part VI of subchapter B of chapter 1 of subtitle A
is amended by redesignating section 224 as section 225 and inserting
after section 223 the following new section:
``SEC. 224. DAYCARE EXPENSES.
``(a) In General.--In the case of an individual, there shall be
allowed as a deduction for the taxable year an amount equal to the
qualified daycare expenses of the individual for such taxable year.
``(b) Qualified Daycare Expenses.--For purposes of this section,
the term `qualified daycare expenses' means the amounts paid or
incurred by the individual as tuition for a dependent of the taxpayer
who has not attained the age of 7 to attend a childcare institution (as
defined in section 1355.20 of title 45, Code of Federal
Regulations).''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) (as amended
by section 4) is further amended by striking ``and'' at the end of
paragraph (4), by striking the period at the end of paragraph (5) and
inserting ``, and'', and by adding at the end the following new
paragraph:
``(6) the deduction provided in section 224.''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of subtitle A is amended by striking the item
relating to section 224 and inserting the following new items:
``Sec. 224. Daycare expenses.
``Sec. 225. Cross reference.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 6. COMMUTING EXPENSE DEDUCTION.
(a) In General.--Part VI of subchapter B of chapter 1 of subtitle A
is further amended by redesignating section 225 as section 226 and
inserting after section 224 the following new section:
``SEC. 225. COMMUTING EXPENSES.
``(a) In General.--In the case of an eligible individual, there
shall be allowed as a deduction for the taxable year an amount equal to
the qualified commuting expenses of the individual for such taxable
year.
``(b) Qualified Commuting Expenses.--For purposes of this section,
the term `qualified commuting expenses' means the amounts paid or
incurred by the individual to use public transit to travel between such
individual's principal residence (as such term is used in section 121)
and such individual's place of work at which such individual works not
less than 20 hours per week (determined by averaging the number of
hours worked at such location during the taxable year over the number
of weeks such individual is employed by the same employer at the same
location during such taxable year).
``(c) Eligible Individual.--
``(1) In general.--For purposes of this section, the term
`eligible individual' means an individual whose modified
adjusted gross income does not exceed--
``(A) $250,000 in the case of a joint return, and
``(B) $125,000 in the case of any other individual.
``(2) Modified adjusted gross income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income increased by an amount excluded from
gross income under sections 911, 931, and 933.
``(d) Regulations.--Not later than January 1, 2027, the Secretary
shall issue such regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section, including--
``(1) identifying qualified commuting expenses, and
``(2) establishing a process to verify such expenses
incurred by individuals.''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) is further
amended by striking ``and'' at the end of paragraph (5), by striking
the period at the end of paragraph (6) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(7) the deduction provided in section 225.''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of subtitle A is further amended by striking
the item relating to section 225 (as amended by section 5) and
inserting the following new items:
``Sec. 225. Commuting expenses.
``Sec. 226. Cross reference.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 7. TUTORING EXPENSES DEDUCTION.
(a) In General.--Part VI of subchapter B of chapter 1 of subtitle A
is further amended by redesignating section 226 as section 227 and
inserting after section 225 the following new section:
``SEC. 226. TUTORING EXPENSES.
``(a) In General.--In the case of an eligible individual, there
shall be allowed as a deduction for the taxable year an amount equal to
so much of the qualified tutoring expenses of the individual for such
taxable year as does not exceed $2,500.
``(b) Qualified Tutoring Expenses.--For purposes of this section--
``(1) In general.--The term `qualified tutoring expenses'
means the amounts paid or incurred by the individual for
tutoring services for a dependent of the taxpayer who attends a
public elementary school or public secondary school (as defined
in section 8101 of the Elementary and Secondary Education Act
of 1965) eligible for funds under part A of title I of the
Elementary or Secondary Education Act of 1965 or any charter
school (as defined in section 4310 of such Act).
``(2) Tutoring services.--The term `tutoring services'
means direct tutoring of a student--
``(A) in a group of not more than 4 students per
instructor,
``(B) for the purpose of increasing academic
achievement in reading, math, science, writing and
language arts, social studies, history, civics, or a
foreign language,
``(C) through planned sessions of not less than 1
hour and not more than 3 hours which occur--
``(i) not less frequently than once per
week for 6 consecutive weeks, or
``(ii) not less frequently than once per
week for 9 weeks during a 1-year period,
consistent, one-on-one or small-group sessions.
``(c) Regulations.--The Secretary shall issue such regulations or
other guidance as may be necessary or appropriate to carry out the
purposes of this section.''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) is further
amended by striking ``and'' at the end of paragraph (5), by striking
the period at the end of paragraph (6) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(7) the deduction provided in section 226.''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of subtitle A is further amended by striking
the item relating to section 226 (as added by section 6) and inserting
the following new items:
``Sec. 226. Tutoring expenses.
``Sec. 227. Cross reference.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 8. EXCLUSION OF INTEREST PAYMENTS ON CREDIT CARD DEBT.
(a) In General.--Part VI of subchapter B of chapter 1 of subtitle A
is further amended by redesignating section 227 as section 228 and
inserting after section 226 the following new section:
``SEC. 227. CREDIT CARD INTEREST PAYMENTS.
``(a) In General.--In the case of an individual, there shall be
allowed as a deduction for the taxable year an amount equal to so much
of the interest paid by the individual during the taxable year on an
open-end credit plan involving a credit card as does not exceed $2,500.
``(b) Definitions.--The terms `open end consumer credit plan' and
`credit card' have the meaning given such terms in section 103 of the
Truth in Lending Act.''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) is further
amended by striking ``and'' at the end of paragraph (6), by striking
the period at the end of paragraph (7) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(8) the deduction provided in section 227.''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of subtitle A is further amended by striking
the item relating to section 226 (as added by section 6) and inserting
the following new items:
``Sec. 227.Credit card interest payments.
``Sec. 228. Cross reference.''.
(d) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2026.
SEC. 9. RENT DEDUCTION FOR PRIMARY RESIDENCE.
(a) In General.--Part VI of subchapter B of chapter 1 of subtitle A
is further amended by redesignating section 228 as section 229 and
inserting after section 227 the following new section:
``SEC. 228. RENT.
``(a) In General.--In the case of an individual, there shall be
allowed as a deduction for the taxable year an amount equal to the
qualifying rent payments of such individual for the taxable year.
``(b) Qualifying Rent Payments.--For purposes of this section, the
term `qualifying rent payments' means amounts paid by the individual in
rent for such individual's principal residence (as such term is used in
section 121).
``(c) Income Phaseout.--
``(1) In general.--The amount of the deduction determined
under subsection (a) shall be reduced (but not below zero) by
an amount equal to 1 percent for every $500 ($1,000 in the case
of a joint return) or fraction thereof by which such
individual's modified adjusted gross income exceeds the
applicable threshold.
``(2) Applicable threshold.--For purposes of this
subsection, the term `applicable threshold' means--
``(A) $150,000 in the case of a joint return, or
``(B) $75,000 in the case of any other individual.
``(3) Modified adjusted gross income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income increased by an amount excluded from
gross income under sections 911, 931, and 933.''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) is further
amended by striking ``and'' at the end of paragraph (8), by striking
the period at the end of paragraph (9) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(10) the deduction provided in section 228.''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of subtitle A is further amended by striking
the item relating to section 228 (as added by section 8) and inserting
the following new items:
``Sec. 228.Rent.
``Sec. 229. Cross reference.''.
(d) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2026.
SEC. 10. EXCLUSION OF DISCHARGE OF INDEBTEDNESS.
(a) In General.--Section 108(a)(1)(E) is amended to read as
follows:
``(E) the taxpayer is an individual.''.
(b) Coordination of Exclusions.--Section 108(a)(2) is amended--
(1) by striking subparagraph (C),
(2) by redesignating subparagraphs (A) and (B) as
subparagraphs (B) and (C), respectively,
(3) by inserting before subparagraph (B) (as so
redesignated) the following new subparagraph:
``(A) Individual exclusion takes precedence.--
Subparagraphs (A), (B), (C), and (D) of paragraph (1)
shall not apply to a discharge to which subparagraph
(E) of such paragraph applies.'', and
(4) in subparagraph (A) (as so redesignated), by inserting
``over insolvency exclusion, qualified farm exclusion, and
qualified real property business exclusion'' after
``precedence'' in the heading.
(c) Conforming Amendments.--
(1) Section 108 is amended by striking subsections (f) and
(h).
(2) Section 163(h)(3)(F) is amended by striking clause
(iv).
(d) Effective Date.--The amendments made by this section shall
apply to debt incurred after December 31, 2026.
SEC. 11. INCREASE IN CAPITAL GAINS RATE.
(a) In General.--Section 1(h)(1)(D) is amended by striking ``20
percent'' and inserting ``25 percent''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning December 31, 2026.
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