Dependent Income Exclusion Act of 2025
Dependent Income Exclusion Act of 2025
Plain Language Summary
# Dependent Income Exclusion Act of 2025 Summary **What the Bill Would Do** This bill would change how the government calculates whether people qualify for health insurance subsidies (premium tax credits). Currently, when determining eligibility and the amount of financial help someone receives toward health insurance costs, the government counts all income in the household—including money earned by dependents (children or other relatives the taxpayer supports). This bill would exclude a dependent's wages and self-employment income from that household income calculation. The effect would be to lower the calculated household income, potentially making more people eligible for subsidies or allowing existing recipients to receive larger subsidies. **Who It Affects** This primarily affects working families with dependent children or other dependents who earn income.
It could help families with teenage workers, college-age dependents with part-time jobs, or adult dependents who contribute earned income to the household. The bill could make health insurance more affordable for these families by reducing their calculated income for subsidy purposes. **Current Status** The bill is currently in committee (HR 3769, sponsored by Representative Steven Horsford of Nevada) and has not yet been voted on by the full House. It remains in the early stages of the legislative process.
CRS Official Summary
Dependent Income Exclusion Act of 2025This bill excludes the wages and net earnings from self-employment of a dependent of a taxpayer 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.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.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.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 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.The amount that may be excluded is limited to 15% of the taxpayer’s modified adjusted gross income.
Latest Action
Referred to the House Committee on Ways and Means.