House Republicans and Democrats crossed the aisle to negotiate a high-profile and priority tax bill, dubbed The Tax Relief for American Families and Working Americans Act. The most promising aspect of this bill is the expansion of the Child Tax Credit (CTC) – a tax benefit intended to help families with qualifying children – and estimates suggest it will lift almost 400,000 children out of poverty. The House passed this tax package in early February and it is now waiting to be heard in the Senate.

To reach a bipartisan agreement on the CTC, Democrats had to concede on some corporate tax cuts Republicans wanted. So, if the suspension vote succeeds and the package passes, we can expect both sides to feel as though they delivered a win for their constituents. Before any side claims victory, it’s important to raise that childless young adult workers received no relief from this bill. This is unfortunate, considering legislators could have provided young adult workers with relief through an expansion of the Earned Income Tax Credit (EITC). 

The EITC is a complementary tax benefit program to the CTC, a fully refundable tax credit available to workers with qualifying income. EITC also has a bipartisan heritage. During the Reagan Administration, legislators agreed we should not tax workers with low incomes into poverty. Well, all the taxpayers except young adult workers. 

Currently, the program has an age phase of 25, which means young workers under the age of 25, with qualifying income from wages, are ineligible to collect the EITC. We have to question the program efficacy of the EITC if young adult workers under 25 are barred from collecting benefits. The fact that this was not highlighted in a high-profile tax deal is a missed opportunity and injustice for many young adult workers. 

Available census data on income among age groups revealed that the EITC is missing about half of the income-eligible workers annually due to age restrictions. Specifically, Young Invincibles’ report found that, on average, there have been ten million young adults between the ages of 18-24 with qualifying income for the EITC every year since 2010. Considering the intent of developing EITC was to avoid taxing workers into poverty by providing a refundable credit, leaving out half of the income-eligible workers weakens the impact of this important tax credit. 

Additionally, by not addressing these efficacy issues, legislators are sending a message to young adult workers in an economy already consumed with instability, inflation, and low wages, that it is acceptable for young adults to exist in a state of poverty compared to other age groups. 

This tax deal is an instrumental tool we need to support low-income working families. However, families are not the only workers in need of economic support. There are many arguments stakeholders may make when justifying leaving young adult workers out of this negotiated deal, and they are flawed.

Proponents against expanding the EITC, will argue that young adult workers don’t need the EITC. They cite young adult workers’ expenses as incomparable to families or older working adults, which is unfounded. The Bureau of Labor Statistics regularly collects consumer expenditure data through a survey, and in 2022, young adults under 25 reported they had $2,000 extra in income at the end of the year after expenditures. Compared to adults 25-34, who had almost $23,000 in extra income after expenditures. We can see from this data that because of the high cost of living, younger adults are spending more of their income on accessing basic needs. 

Others argue the expansion would inflate the already increasing national debt. In considering  the credit amount differences, the maximum credit amount for the EITC was $600 compared to the $1600 for CTC. The estimated cost of the one time expansion of the EITC during the pandemic, which lowered the phase-in rate to 18, was $11.9 billion. While the corporate tax cut portion of the proposed deal will cost the government $32.8 billion in revenue. The cost of expanding the EITC to include young adult workers under 25 is not even half of what the current tax proposal cuts from corporate taxes.

Luckily, young adults are not alone in this fight. There are even policymakers serving as champions of the expanded EITC movement. Rep. Gwen Moore from Wisconsin introduces a Worker Relief and Credit Reform Act every Congress in an effort to move Congress on this issue. Other bills like the EITC Modernization Act by Rep. Bonnie Watson Coleman or the EITC Age Parity Act by Rep. Judy Chu focus on this issue of EITC efficacy. These bills offer paths, but they need collective recognition to build momentum. 

Without vocalizations against the arbitrary age restrictions in the EITC against young adult workers, many of them will continue to suffer in silence until they reach age 25. For the foreseeable future, legislators will continue the fiction that young adult poverty is more palatable than other age groups.

Alexander Lundrigan is the Workforce Policy and Advocacy Coordinator at Young Invincibles.