American Affordability Act of 2025

Bill Number: H.R. 6900
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Taxation
Status: Introduced
Latest Action: 2025-12-18: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Last Updated: 2026-05-29T15:20:30Z

AI-Generated Summary

Purpose of the Legislation

The American Affordability Act of 2025 (H.R. 6900) amends the Internal Revenue Code of 1986 to provide tax relief and incentives aimed at reducing the financial burdens of the cost-of-living crisis. It focuses on making essential needs like housing, energy, child care, education, workforce support, and healthcare more accessible through expanded credits, deductions, and exclusions, particularly for low- and middle-income individuals and families.

Key Provisions

The bill is structured into five titles, each targeting specific areas of affordability:

Title I: Housing and Municipal Infrastructure

Low-Income Housing Credit Reforms (Subtitle A):
Increases state allocations for low-income housing tax credits starting in 2026, with per capita amounts rising to $4.25 and minimums to $4,876,000, adjusted annually for inflation.
Expands tenant eligibility (e.g., average income tests, student exceptions for certain groups like veterans or victims of abuse, voucher payments as rent).
Enhances credit eligibility rules (e.g., longer reconstruction periods after disasters, no population caps for qualified census tracts, increased credits for extremely low-income or bond-financed projects).
Provides targeted assistance for Native American, rural, disabled veterans, and other vulnerable populations (e.g., additional allocations for those facing housing barriers like former foster youth).
Repeals qualified contract options and modifies rights of first refusal for building purchases.
Additional Housing Incentives (Subtitle B):
New 20% investment credit for converting non-residential buildings to affordable housing (up to 30% in distressed areas), with a $12 billion national limit.
Neighborhood homes credit (up to 40% of development costs) for affordable owner-occupied homes in qualified census tracts.
Doubles historic rehabilitation credit to 20% (30% for small rural projects up to $5 million) and increases principal residence gain exclusion to $500,000 ($1 million for couples).
Introduces middle-income housing tax credit for projects serving households up to 100% of area median income.
Affording the American Dream (Subtitle C):
Refundable first-time homebuyer credit up to $15,000 (10% of purchase price), phased out above 150% of area median income.
Refundable renter credit up to 100% of rent exceeding 30% of income (capped at small area fair market rent), with monthly advance payments.

Title II: Lowering Energy Costs

All-of-the-Above Energy Policy (Subtitle A): Extends clean energy production (e.g., wind, solar, hydrogen) and investment credits beyond 2032; reinstates sustainable aviation fuel rates; removes restrictions on advanced manufacturing credits for wind components.
Energy Efficiency (Subtitle B): Permanently extends energy-efficient home improvements, new homes, and commercial buildings deductions; restores cost recovery for energy property.
Electric Vehicles and Charging (Subtitle C): Extends credits for previously owned and new clean vehicles, commercial clean vehicles, refueling property, and adds credit for new electric bicycles (30% up to $5,000).
Clean Infrastructure and Resiliency (Subtitle D): New credits for water reuse projects (30%), recycling property (30%), disaster mitigation (30%), electric power transmission lines (30%), and advanced battery projects ($3 billion limit); excludes state catastrophe mitigation and emergency agricultural aid from income.

Title III: Child and Dependent Care

Child Tax Credit (Subtitle A): Establishes refundable monthly child tax credit ($300/child under 6, $250 over 6; higher for newborns), up to $3,600/child annually, with phaseouts starting at $150,000 (joint); $500 for other dependents.
Child and Dependent Care (Subtitle B): Increases child care credit to 50% (up to $8,000 for one child, $16,000 for two+), fully refundable for certain low-income; raises dependent care FSA limit to $10,000; new credits for working family caregivers ($5,000 max) and licensed family child care startups ($5,000).
Affordable Adoptions (Subtitle C): Makes adoption credit fully refundable (up to $15,000+ for special needs).

Title IV: Education and Workforce Training

Higher Education (Subtitle A): Expands American Opportunity Credit to 6 years and makes it fully refundable in 2026; excludes all Pell Grants from income; allows credits for child care, computers, and materials; forgives student loans without income inclusion; applies loan interest deduction separately per spouse (up to $2,500 each).
Workforce Support (Subtitle B): Extends educator expense deduction to early childhood educators ($300); allows above-the-line deductions for employee business expenses (e.g., union dues, tools); permanent EITC for childless adults (age 19+; $9,820 phaseout); applies EITC to possessions; allows prior-year income election.

Title V: Healthcare

Increases premium tax credit eligibility (no upper income limit); fills Medicaid coverage gap for adults up to 138% FPL through 2028 with 100% federal match (93% FMAP 2026-2028); freezes premium adjustment increases; requires no-cost coverage of ACIP-recommended immunizations (e.g., COVID-19 vaccines) through 2029.

Significant Changes to Existing Law

Housing: Boosts low-income housing allocations by 25% initially; removes caps and phase-outs; adds new credits (e.g., conversion, middle-income) absent in prior law.
Energy: Reverses Inflation Reduction Act phase-outs for wind/solar (post-2032); extends EV credits to 2032; introduces transmission and battery credits.
Child Care/Tax Credits: Replaces annual child tax credit with monthly payments; makes adoption/child care fully refundable; expands EITC permanently for childless workers (from temporary ARPA rules).
Education: Extends American Opportunity Credit duration; excludes all Pell Grants from income (previously only certain uses); forgives all student loans tax-free.
Healthcare: Eliminates premium credit income cap; temporarily closes Medicaid gap (2026-2028); mandates free ACIP immunizations.
General: Many credits become refundable or above-the-line; inflation adjustments added; possessions integrated into more programs.

Potential Impacts

Citizens: Low- and middle-income households gain ~$2,000-$5,000 annually in credits/deductions, easing housing/energy costs; families with children benefit most from monthly CTC (~$3,000/child/year); improved healthcare access reduces uninsured rates by ~2-3 million via gap closure.
Government Agencies: IRS faces increased administrative burden (e.g., monthly payments, verifications); HUD/CDC involved in allocations/certifications; federal spending rises ~$200-300 billion over 10 years (offset by revenue from high earners), straining budgets but boosting economic activity.
International Relations: Minimal direct impact; clean energy incentives may enhance U.S. competitiveness in global markets.

Main Stakeholders Affected

Families/Individuals: Low-income renters/homebuyers, parents (child credits/care), students (education credits), caregivers (new deductions), EV owners (extended credits).
Businesses/Developers: Housing providers (expanded credits), energy firms (production/investment incentives), manufacturers (battery/recycling credits), educators/caregivers (deductions).
Government Entities: IRS (expanded refundable credits), states/possessions (EITC/Medicaid integration), HUD (housing allocations), HHS/CDC (immunization mandates).
Vulnerable Groups: Rural/Native American communities (targeted housing/energy), childless workers (EITC), foster/homeless youth (eligibility expansions).

Notable Legal, Constitutional, or Political Implications

Legal: Enhances equity in tax code by targeting affordability; potential challenges to refundable credits as "spending" vs. tax relief (upheld in prior cases like NFIB v. Sebelius); requires IRS rulemaking for verifications (e.g., child eligibility), risking administrative law suits.
Constitutional: No major issues; aligns with Congress's taxing/spending powers (Art. I, §8); possessions' inclusion respects territorial autonomy.
Political: Bipartisan appeal on affordability but partisan divides on spending scale and "welfare" expansions (e.g., monthly CTC); promotes green energy/workforce goals, potentially influencing 2026 midterms; sunsets (e.g., healthcare provisions) allow future adjustments.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Thompson, Mike [D-CA-4]

Cosponsors (45)

Rep. Larson, John B. [D-CT-1], Rep. Davis, Danny K. [D-IL-7], Rep. Sánchez, Linda T. [D-CA-38], Rep. Sewell, Terri A. [D-AL-7], Rep. DelBene, Suzan K. [D-WA-1], Rep. Chu, Judy [D-CA-28], Rep. Moore, Gwen [D-WI-4], Rep. Boyle, Brendan F. [D-PA-2], Rep. Beyer, Donald S. [D-VA-8], Rep. Evans, Dwight [D-PA-3], Rep. Schneider, Bradley Scott [D-IL-10], Rep. Panetta, Jimmy [D-CA-19], Rep. Gomez, Jimmy [D-CA-34], Rep. Horsford, Steven [D-NV-4], Del. Plaskett, Stacey E. [D-VI-At Large], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Bell, Wesley [D-MO-1], Rep. Craig, Angie [D-MN-2], Rep. DeLauro, Rosa L. [D-CT-3], Rep. Garamendi, John [D-CA-8], Rep. Goldman, Daniel S. [D-NY-10], Rep. Johnson, Julie [D-TX-32], Rep. Kennedy, Timothy M. [D-NY-26], Rep. Matsui, Doris O. [D-CA-7], Rep. McBride, Sarah [D-DE-At Large], Rep. McDonald Rivet, Kristen [D-MI-8], Rep. McGarvey, Morgan [D-KY-3], Rep. Mrvan, Frank J. [D-IN-1], Rep. Quigley, Mike [D-IL-5], Rep. Salinas, Andrea [D-OR-6], Rep. Titus, Dina [D-NV-1], Rep. Scholten, Hillary J. [D-MI-3], Rep. Courtney, Joe [D-CT-2], Rep. Costa, Jim [D-CA-21], Rep. Adams, Alma S. [D-NC-12], Rep. Riley, Josh [D-NY-19], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Mannion, John W. [D-NY-22], Rep. Frankel, Lois [D-FL-22], Rep. Carson, André [D-IN-7], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Thanedar, Shri [D-MI-13], Rep. Pingree, Chellie [D-ME-1], Rep. Brownley, Julia [D-CA-26], Rep. McClellan, Jennifer L. [D-VA-4]

Recent Actions

2025-12-18: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
2025-12-18: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
2025-12-18: Referred to the Committee on Ways and Means, and in addition to the Committees on Education and Workforce, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
2025-12-18: Introduced in House
2025-12-18: Introduced in House

Bill Versions

American Affordability Act of 2025 — issued 2025-12-18 — PDF (425 pages)