Dependent Income Exclusion Act of 2025

This bill changes how a family’s income is counted for health insurance premium tax credits from the marketplace. If your child or another dependent works, some of their job or self‑employment earnings would no longer count toward your household income. This can help some families qualify for the credit or get a larger amount to lower monthly premiums. The exclusion applies to dependents under 18, and to those under 24 who are students, in an apprenticeship, or in a qualified job‑training program. The amount you can leave out is capped at 15% of your modified adjusted gross income .

Health insurance marketplaces would also collect information on whether this exclusion applies to anyone in your household and how much those dependents earn, to help set the credit correctly. In states that haven’t expanded Medicaid, the exclusion can’t be used to push your counted income below 100% of the federal poverty level for this purpose. These changes would start with tax years that begin after the bill becomes law.

Key points:

• Who is affected: Households with working dependents under 18, or under 24 if in school, job training, or a registered apprenticeship.
• What changes: Wages and self‑employment income of those dependents won’t count toward household income for the premium tax credit, up to 15% of the taxpayer’s modified adjusted gross income; marketplaces will gather needed information to apply this rule .
• Special rule: In non‑expansion Medicaid states, the exclusion can’t lower counted income below 100% of the poverty line for this purpose.
• When: Applies to tax years after enactment.