With the House vote this evening, Congress approved a bi-partisan deal to avoid several automatic tax increases and spending cuts that were scheduled to take effect on January 1, 2013.  This important legislation prevents tax increases for millions of young working Americans. For example, Congress extended for 5 years the American Opportunity Tax Credit, which helps over 8 million students and their families defray the cost of higher education. Had Congress failed to extend the AOTC, college costs would have risen for millions of Americans next year. Most of the tax increases included as part of the deal are limited to upper-income earners. Many young workers, however, will see some tax increase due to the expiration of the payroll tax cut.

“Overall we are pleased that the President and both parties in Congress came together to prevent more severe tax increases that could have adversely impacted young Americans and all Americans,” said Aaron Smith, Executive Director of Young Invincibles. “Congress also extended  provisions like the American Opportunity Tax Credit, Earned Income Tax Credit, Child Tax Credit, and unemployment benefits, that are important to young adults and their families.”

For more information about how sequestration will reduce education and training training opportunities for young adults, see our report, “A Fight for the Future: Education, Job Training, and the Fiscal Showdown” here: younginvincibles.org/wp-content/uploads/2012/11/11-14-12-KS-1.pdf