Tax Cut for Workers Act: Expanded Tax Credits and New Rules
This act introduces significant changes to tax credits for working individuals, especially those with lower incomes. It lowers the minimum age for eligibility, removes the upper age limit, and increases credit amounts, potentially putting more money into the pockets of many citizens. Additionally, the act allows the use of prior year's income if the current year's income is lower, providing greater financial stability.
Key points
Lower Age for Tax Credit: Individuals aged 19 (or 18 for qualified former foster youth and homeless youth) can now claim the credit, previously only available from age 25.
No Upper Age Limit: The 65-year age limit has been removed, meaning older working individuals can continue to benefit from the credit.
Increased Credit Amounts: The amounts of tax credits and income thresholds have been increased, which may result in higher tax refunds for eligible individuals.
Option to Use Prior Year Income: If your current income is lower than the previous year, you can choose to use the prior year's income for credit calculation, which can help during financially challenging times.
Extension of Credits to US Possessions: Tax credits will now be permanently available to residents of Puerto Rico, American Samoa, and other US territories with similar tax systems.
Introduced
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