# EITC Modernization Act (H.R. 905) - Plain Language Summary

## What This Bill Does

The EITC Modernization Act proposes to expand the Earned Income Tax Credit (EITC), a federal tax benefit that provides money to lower- and middle-income working people. Currently, the EITC primarily benefits workers with qualifying children. This bill would broaden eligibility to include:
- **Workers with elderly dependents** (age 65+) they support
- **Qualifying college students** who meet income requirements or are eligible for federal Pell Grants
- **Other dependents** beyond just children

The bill essentially removes some of the restrictions that currently limit who can claim this tax credit.

## Who Benefits

The primary beneficiaries would be:
- **Working adults without children** who support elderly parents or relatives
- **College students** from low-income families who are not claimed as dependents by their parents
- **Low-wage workers** generally, as the bill aims to increase their take-home income

The bill's sponsors argue this expansion would help reduce income inequality, support family stability, and boost local economies since lower-income workers typically spend tax refunds immediately on necessities like groceries, rent, and healthcare.

## Key Changes

The bill modifies the tax code to replace the term "qualifying child" with the broader term "qualifying dependent," allowing the credit to apply to more family situations. It includes eligibility requirements such as requiring dependents to have a Social Security number, live in the U.S. for more than half the year, and meet income thresholds. The bill was introduced in January 2025 and referred to the House Ways and Means Committee.