Young Adult Tax Credit Act
- Bill Number
- H.R. 9031
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-05-26: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-05T15:43:15Z
AI-Generated Summary
Purpose This legislation establishes a new refundable tax credit to provide monthly financial assistance to young adults aged 18 through 24, with the goal of supporting this age group through direct payments administered via the tax system.
Key Provisions
- Credit Structure: Creates Internal Revenue Code Section 24A, offering a $500 monthly credit per qualifying young adult (a "specified young adult"), available to the taxpayer claiming them or to the individual themselves if not claimed as a dependent. The credit is inflation-adjusted annually after 2027 using the Consumer Price Index.
- Advance Payments: Adds Section 7527B, requiring the IRS to issue monthly advance payments based on prior-year tax return data, with an online portal for taxpayers to manage elections, update information, and opt for annual lump-sum payments instead.
- Eligibility and Limits: Applies to U.S. citizens, nationals, or residents aged 18–24 who meet residency rules (U.S. or Puerto Rico). No credit if the young adult is claimed as a dependent by another taxpayer. Strict taxpayer identification number requirements apply.
- Reconciliation and Recapture: Taxpayers reconcile advance payments on their annual return; excess payments are recaptured in cases of fraud, reckless disregard, or other abuse, with errors treated as mathematical or clerical.
- Territorial Application: Extends benefits to Puerto Rico and American Samoa with mirror-code rules, coordination payments from the Treasury, and distribution plans for American Samoa.
- Outreach: Requires the Treasury Secretary to conduct public outreach, including website information and direct mailings, with priority for underrepresented populations.
- Payment Protections: Mandates electronic delivery, exempts payments from most offsets and garnishments, and provides notices of payments and changes in eligibility.
Significant Changes to Existing Law
- Introduces the first monthly advance tax credit targeted at young adults, modeled on the child tax credit but independent of it.
- Amends multiple code sections (e.g., Sections 26, 3402, 6211, 6213, 6695, and 1324 of Title 31) to integrate the new credit into refund, withholding, and error-assessment rules.
- Creates new administrative infrastructure for ongoing monthly payments rather than annual credits.
Potential Impacts
- Government Agencies: Increases IRS responsibilities for payment processing, portal maintenance, fraud detection, and coordination with U.S. territories; requires new resources for outreach and compliance.
- Citizens: Delivers up to $6,000 annually per eligible young adult (before inflation adjustments), potentially aiding living expenses, education, or workforce entry, though subject to income tax filing and reconciliation.
- International Relations/Territories: Extends federal tax benefits to Puerto Rico and American Samoa through direct Treasury payments and local distribution plans, promoting parity with mainland residents.
Main Stakeholders Affected
- Young adults aged 18–24 and the taxpayers (often parents) who claim them.
- The Internal Revenue Service and Treasury Department.
- U.S. territories (Puerto Rico, American Samoa) and their residents.
- Community-based organizations involved in outreach.
- Financial institutions handling electronic payments and garnishment protections.
Notable Legal, Constitutional, or Political Implications
- Raises questions about federal authority over tax administration in territories under the mirror-code system.
- Creates a new refundable credit mechanism that functions partly as direct spending, potentially affecting federal budget scoring.
- Includes strong anti-fraud and recapture provisions to limit abuse, with errors assessed under existing math-error rules.
- Requires ongoing regulatory guidance from the Secretary to implement eligibility, portal operations, and territorial coordination.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. McGarvey, Morgan [D-KY-3]
Cosponsors (5)
Rep. Casar, Greg [D-TX-35], Rep. Watson Coleman, Bonnie [D-NJ-12], Rep. Garcia, Robert [D-CA-42], Rep. Tlaib, Rashida [D-MI-12], Del. Norton, Eleanor Holmes [D-DC-At Large]
Recent Actions
- 2026-05-26: Referred to the House Committee on Ways and Means.
- 2026-05-26: Introduced in House
- 2026-05-26: Introduced in House
Bill Versions
- Young Adult Tax Credit Act — issued 2026-05-26 — PDF (28 pages)