As more Americans expect to work past age 70 or hold off on retirement altogether, changes are being proposed on Capitol Hill to increase the age cap for the earned-income tax credit (EITC), which currently may only be claimed by workers between the ages of 25-65 years.
U.S. Reps. Mike Carey (R-OH) and Danny K. Davis (D-IL) on Aug. 16 introduced the bipartisan EITC for Older Workers Act, H.R. 9361, which would eliminate the upper age limit for workers to qualify for the EITC.
“The workforce has changed significantly since the EITC was established in 1975. Many of us are working longer, and a rising retirement age should be reflected in the program,” Carey said. “As Americans work to keep up with rising prices, we are proud to lead this bipartisan, common-sense effort to give them a boost.”
The EITC is a refundable tax credit for low- to moderate-income workers and families. Qualifying taxpayers can use the credit to reduce the taxes they owe. The credit amount is based on several factors, including the amount of income earned, the number of qualifying children, and the marital status of the individual, according to information provided by the lawmakers.
Davis said the proposed measure would offset federal payroll and income taxes, and increase the economic well-being and stability of older workers.
“I proudly join Rep. Carey in leading this bill to strengthen the Earned Income Tax Credit for older workers,” the congressman said. “The current age limit of 65 fails to meet the needs and circumstances of older workers.
“By removing the age ceiling, this bill provides a critical work support to the roughly two million low-income workers aged 65 and older,” he added.
The EITC for Older Workers Act is supported by AARP and the Critical Labor Coalition.
“The EITC helps millions of people earn their way out of poverty, encouraging them to find and keep a job. Workers aged 65-plus represent the fastest-growing segment of the labor force,” said Bill Sweeney, senior vice president of government affairs for AARP. “Removing this arbitrary age cap ensures that those who are eligible and choose to work do not have their taxes raised just because they turn 65.”
Sweeney added that the EITC has an added benefit of bringing in revenues to businesses, states, and local communities, creating a ripple effect throughout the economy.
“These dollars help to sustain local companies and workers by creating jobs, wages, and salaries immediately and in the future,” said Sweeney. “This bill is a true win-win.”
According to the Critical Labor Coalition, permanently lifting the age limit for EITC eligibility will also help eligible senior citizens, many of whom need additional monetary support after retiring early, return to the workforce.
“It also addresses the ongoing labor shortage by supporting the reentry of experienced, hardworking individuals into the community,” the coalition said in a statement.