Sponsors (2)
The bill expands premium subsidy access for families with working dependents and supports trainees in WIOA programs, but its 15% cap, limits in Medicaid non‑expansion states, added exchange reporting, and modest increased federal costs create trade‑offs in equity, administration, and budgetary impact.
Low- and middle-income families with working dependents will get larger premium tax credits because certain dependent wages and self-employment income are excluded from household income when computing subsidy eligibility.
Young dependents in apprenticeships or job‑training can remain covered under family-subsidized plans while they work or train, reducing the risk of coverage loss during workforce development.
Participants in WIOA-defined workforce training programs are explicitly treated as qualifying trainees so they can transition into employment without causing family subsidy ineligibility.
People in Medicaid non‑expansion states may receive a smaller or no effective exclusion because the rule prevents household income from falling below 100% of the federal poverty level, limiting subsidy gains for low-income taxpayers in those states.
The 15% aggregate cap on excluded dependent income limits benefits for families with multiple working dependents, so some dependent earnings will still count toward subsidy eligibility and reduce credits.
New reporting requirements for Exchanges increase administrative burden and the risk of errors, which could lead to incorrect advance payments and later reconciliations or taxpayer surprises.
Based on analysis of 2 sections of legislative text.
Excludes certain dependent earnings from household income when calculating the premium tax credit, subject to age, student/training rules, a 15% cap, and a 100% FPL floor in non‑expansion States.
Official title: To amend the Internal Revenue Code of 1986 to exclude certain dependent income when calculating modified adjusted gross income for the purposes of eligibility for premium tax credits.
Introduced June 5, 2025 by Steven Horsford · Last progress June 5, 2025
Excludes certain dependent wages and self-employment income from a household's modified adjusted gross income when calculating the premium tax credit, so some families with working dependents qualify for larger credits or remain eligible. The exclusion applies to dependents under 18 or under 24 who meet student/training/apprenticeship rules, is capped at 15% of the taxpayer's MAGI, and cannot lower household income below 100% of the federal poverty line in non‑Medicaid‑expansion States; it takes effect for taxable years beginning after enactment and requires Exchanges to collect and share information about affected dependents and their earnings.