Sponsors
The bill provides a refundable, one-year tax credit that boosts refunds and short-term liquidity for lower-income taxpayers in 2025, at the cost of higher federal spending, added tax-code complexity, and a sharp cutoff that excludes many moderate-income filers.
Low- and moderate-income taxpayers with MAGI at or below the bill's thresholds will receive a refundable credit equal to 10% of their 2025 federal income tax liability, directly lowering their net tax bill or increasing refunds for 2025 filings.
Low-income filers who have little or no tax liability can still receive a cash refund because the credit is refundable, improving short-term household liquidity and immediate financial resilience for those households in 2025.
The one-year refundable credit increases federal outlays for 2025, which could raise the budget deficit or require spending offsets, potentially affecting all taxpayers through future fiscal tradeoffs.
The credit phases out at set income thresholds, creating a sharp cutoff that leaves many moderate- to upper-middle-income filers (above roughly $100k/$200k) without benefit and can produce perceived unfairness or abrupt loss of assistance at those limits.
Creating a new credit and cross-references increases tax-code complexity and will add IRS administrative workload and compliance burdens for taxpayers and preparers when filing 2025 returns.
Based on analysis of 2 sections of legislative text.
Creates a refundable tax credit equal to 10% of a taxpayer's federal income tax liability for tax year 2025, phased out above $100k MAGI (single) and $200k MAGI (joint).
Creates a one-year refundable tax credit for tax year 2025 equal to 10% of a taxpayer's federal income tax liability, with the credit phased out for single filers whose modified adjusted gross income (MAGI) exceeds $100,000 and joint filers whose MAGI exceeds $200,000. The credit is refundable, so eligible filers may receive a payment even if their tax liability is zero or less after other credits. The bill adds the new credit to the Internal Revenue Code, makes conforming cross‑references, and applies only to taxable years beginning after December 31, 2024 (effectively the 2025 tax year).
Introduced April 9, 2025 by Gabriel Vasquez · Last progress April 9, 2025