H.R.3769 - Dependent Income Exclusion Act of 2025 (119th Congress)
Summary
H.R.3769, the Dependent Income Exclusion Act of 2025, proposes amending the Internal Revenue Code of 1986 to exclude certain dependent income from the calculation of modified adjusted gross income (MAGI) for determining eligibility for premium tax credits under the Affordable Care Act (ACA). This exclusion would apply to the wages and self-employment income of dependents under the age of 18, or those under 24 who are students or participating in qualified job-training or apprenticeship programs. The bill aims to ensure that low-income families are not unfairly penalized due to the income of their dependent children when seeking healthcare coverage.
Expected Effects
The bill's passage would likely increase the number of families eligible for premium tax credits, thereby reducing their healthcare costs. It could also incentivize workforce participation among young people without jeopardizing their families' access to affordable healthcare. However, it may also lead to increased government spending on premium tax credits.
Potential Benefits
- Increased Access to Healthcare: More low-income families may become eligible for premium tax credits, making healthcare more affordable.
- Reduced Financial Burden: Families with working dependents would not have their tax credits reduced due to their children's income.
- Workforce Incentive: Encourages young people to work or participate in job training without negatively impacting their family's healthcare benefits.
- Simplification: Simplifies the calculation of MAGI for families with dependents, reducing administrative burdens.
- Targeted Relief: Focuses on supporting families with young dependents who are often in greater need of financial assistance.
Potential Disadvantages
- Potential for Increased Government Spending: Expanding eligibility for premium tax credits could increase federal spending.
- Complexity in Implementation: Defining and verifying 'qualified job-training programs' and 'apprenticeship programs' may create administrative challenges.
- Risk of Abuse: There is a potential for taxpayers to misreport dependent income to maximize tax credit eligibility.
- Uneven Distribution of Benefits: The benefits may disproportionately favor families in states that have expanded Medicaid under the ACA.
- Potential for Reduced Individual Responsibility: Some may argue that excluding dependent income reduces the incentive for dependents to contribute to household expenses.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble). Congress has broad authority to tax and spend for the general welfare of the United States. The Sixteenth Amendment allows Congress to lay and collect taxes on incomes, from whatever source derived. The bill modifies the tax code to provide tax credits, which falls under Congress's power to tax and spend. The bill does not appear to infringe upon any specific individual rights or liberties protected by the Bill of Rights.
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).