H.R.2338 - Worker Relief and Credit Reform Act of 2025; WRCR Act of 2025 (119th Congress)
Summary
H.R.2338, the Worker Relief and Credit Reform Act of 2025 (WRCR Act of 2025), aims to expand and improve the Earned Income Tax Credit (EITC). The bill broadens eligibility for the EITC to include qualifying students, modifies age requirements, and considers care-giving and learning as compensated work. It also modifies percentages and amounts related to the credit and introduces advance payment options.
Expected Effects
The WRCR Act is likely to increase the number of individuals and families eligible for and benefiting from the EITC. This expansion could lead to increased financial stability for low-to-moderate income individuals and families, potentially stimulating local economies.
Potential Benefits
- Increased financial assistance for low-to-moderate income students.
- Expanded eligibility for younger workers (age 18+).
- Recognition of care-giving responsibilities as contributing to earned income.
- Increased credit amounts and reduced phase-out percentages, leading to higher benefits.
- Option for advance monthly payments, providing more immediate financial relief.
Potential Disadvantages
- Potential for increased complexity in tax filing due to expanded eligibility criteria.
- Risk of overpayments and subsequent recapture, especially with advance payment options.
- Potential administrative burden for the IRS in implementing and managing the new provisions.
- Possible increased strain on the federal budget due to expanded credit eligibility and higher payment amounts.
- The advance payment program may be difficult for some taxpayers to manage, leading to unexpected tax liabilities.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Constitution's mandate to "promote the general Welfare" (Preamble) by providing economic assistance to low-to-moderate income individuals and families. The expansion of the EITC falls under Congress's power to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1).
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).