Dependent Income Exclusion Act of 2025

Bill: 119-hr-3769
Sponsor: full_name: Rep. Horsford, Steven [D-NV-4]
Introduced: 2025-06-05
Policy area: Taxation
Latest action: action_date: 2025-06-05
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2025-06-05
action_desc: Introduced in House
text: <p><strong>Dependent Income Exclusion Act of 2025</strong></p><p>This bill excludes the wages and net earnings from self-employment of a dependent of a taxpayer&nbsp;from the calculation of total household income for purposes of determining eligibility for and the amount of the refundable premium tax credit, subject to limitations.</p><p>Under current law, eligible taxpayers may be able to claim the premium tax credit, which applies toward the cost of obtaining health insurance through health insurance exchanges. To be eligible for the credit, a taxpayer’s household income must meet or exceed 100% of the federal poverty level (FPL). For tax years before 2021 and after 2025, taxpayers must have a household income that meets or exceeds 100% but is less than 400% of the FPL to be eligible for the tax credit.</p><p>Further, under current law, the calculation of the premium tax credit is based, in part, on taxpayers’ household income such that taxpayers with lower household incomes are eligible for a higher premium tax credit.</p><p>The bill excludes from household income the wages and net earnings from self-employment of a dependent of the taxpayer who (1) is under 18 years old; or (2) is under 24 years old and is, during&nbsp;any five calendar months of the year, a full- or part-time student in an educational organization (excluding for-profit educational institutions), is in an apprentice program, or is participating in a job training program.</p><p>The amount that may be excluded is limited to 15% of the taxpayer’s modified adjusted gross income.&nbsp;</p>

tv_txt: I 119th CONGRESS 1st Session H. R. 3769 IN THE HOUSE OF REPRESENTATIVES June 5, 2025 Mr. Horsford (for himself and Ms. Moore of Wisconsin ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL 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.

1. Short title This Act may be cited as the Dependent Income Exclusion Act of 2025 . 2. Exclusion of certain dependent income for purposes of premium tax credit (a) In general Paragraph (2) of section 36B(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (C) Exception for certain dependent income (i) In general There shall not be taken into account under subparagraph (A)(ii) any wages (determined under section 3401(a)) or net earnings from self-employment (as defined in section 1402(a)) of any dependent of the taxpayer who— (I) has not attained age 18 as of the last day of the calendar year in which the taxable year of the taxpayer begins, or (II) has not attained age 24 as of the last day of such calendar year and, during each of 5 calendar months during such calendar year, is described in subparagraph (A) or (B) of section 152(f)(2) (applied by substituting part-time or full-time for full-time each place it appears, and by deeming any for-profit educational institution not to be an educational organization described in section 170(b)(1)(A)(ii)), is participating in a qualified job-training program, or is participating in an apprenticeship program registered under the Act of August 16, 1937 (commonly known as the National Apprenticeship Act ; 50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq. ). (ii) Qualified job-training program For purposes of this subparagraph, the term qualified job-training program means any program of training services described in section 134(c)(3) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3174(c)(3) ). (iii) Limitation Clause (i) shall not apply to so much of the aggregate income of all dependents of the taxpayer as exceeds an amount equal to 15 percent of the modified adjusted gross income of the taxpayer. (iv) Taxpayers residing in Medicaid non-expansion States In the case of a taxpayer residing in a State which (as of the first day of the taxable year) does not provide for eligibility under clause (i)(VIII) or (ii)(XX) of section 1902(a)(10)(A) of the Social Security Act for medical assistance under title XIX of such Act (or a waiver of the State plan approved under section 1115 of the Social Security Act), clause (i) shall apply to any dependent of such taxpayer only to the extent that the application of such clause would not reduce the household income below 100 percent of the amount equal to the poverty line for a family of the size involved. . (b) Conforming amendments (1) Clause (ii) of section 36B(d)(2)(A) of the Internal Revenue Code of 1986 is amended by inserting , except as provided in subparagraph (C), after individuals . (2) Paragraph (3) of section 1411(b) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18081 ) is amended by adding at the end the following new subparagraph: (D) Information regarding certain dependents Information regarding whether section 36B(d)(2)(C) will apply to any individuals taken into account as members of the household of the enrollee, and the amount of income from employment of each such individual for the taxable year described in subparagraph (A). . (c) Effective date The amendments made by this section shall apply to credits allowed under section 36B of the Internal Revenue Code of 1986 for, and advance payments of credits under section 1412 of the Patient Protection and Affordable Care Act with respect to, taxable years beginning after the date of the enactment of this Act.