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Bill

HR 9031

Young Adult Tax Credit Act

119th Congress Introduced by Greg Casar and 5 co-sponsors

Creates a refundable monthly Young Adult Tax Credit of $500 per qualifying 18–24-year-old, with advance monthly payments and inflation adjustments after 2027.

Introduced in House
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WeVote Research Nonpartisan
Bill Summary · HR 9031

Summary of HR 9031 – Young Adult Tax Credit Act (Session 119, 2nd S)

  • Purpose: Establish a refundable monthly young adult tax credit with advance monthly payments for eligible individuals, designed to support young adults aged 18 to 24 (as of each month) who are U.S. citizens, nationals, or residents.

Key Provisions and Changes

  • New credit: Monthly Young Adult Tax Credit (Section 24A)

    • A refundable credit against the tax for the taxable year.
    • Each calendar month, eligible filers receive a “monthly specified young adult allowance” of $500 for each taxpayer or dependent who is a specified young adult for that month.
    • Starting for months beginning after December 31, 2027, the base $500 monthly amount is eligible for an inflation adjustment:
    • Increase equals the product of $500 and the percentage by which the Consumer Price Index (CPI) for the prior year exceeds the CPI for 2027.

  • Definition: Specified Young Adult

    • An individual who is at least 18 but has not reached age 25 as of the end of the month.
    • Must be a U.S. citizen, national, or resident.

  • Interaction with dependents and credits

    • No credit is allowed for an individual if another taxpayer can claim a deduction for that dependent under section 151 for the year the individual’s taxable year begins.

  • Advance monthly payments (Section 7527B)

    • The Secretary must implement a program to provide monthly advance payments equal to the estimated monthly allowance for each month.
    • Eligibility for monthly payments generally requires the filer’s principal place of abode to be in the United States or Puerto Rico for more than half of the month (subject to Secretary’s rules).
    • An online information portal will let taxpayers:
    • Begin or stop monthly payments,
    • Provide information to determine monthly payments and eligibility (including changes in dependent status),
    • Opt for an annual lump sum in lieu of monthly payments.
    • Portal must be multilingual and mobile-friendly; administration and updates to ensure efficiency and accuracy.

  • Dependent status determination for advances

    • A specified young adult will be treated as a dependent of the taxpayer if they were claimed as a dependent on the taxpayer’s return for the relevant reference year.
    • The “reference year” is the most recent of either the last tax year ending before the current year or the preceding tax year, depending on filing history.
    • If multiple returns claim the same dependent due to changes in status, the bill establishes procedures to adjudicate, notify, and treat errors as clerical unless fraud is involved.

  • Recapture and reconciliation (Section 24A(g))

    • The amount of the annual credit is reduced by the total amount of advance payments received for the year (lookback to ensure no double payment).
    • If advance payments exceed the annual credit, the excess is treated as an increase in tax (recapture) for the year.
    • Specific recapture provisions apply in cases of fraud, reckless or intentional disregard, or other abuse mitigations; other circumstances may be defined by Treasury regulations.
    • Coordination with possessions (e.g., Puerto Rico and mirror-code possessions) and American Samoa considerations are provided.

  • Payment administration and protections (Section 24A, 7527B)

    • Payments to be made via electronic funds transfer, consistent with other federal payment methods.
    • Treasury may certify and disburse refunds electronically to accounts authorized for federal refunds or Treasury-sponsored accounts.
    • Payments are generally not subject to garnishment or certain offsets, and are non-transferable/assignable.
    • If an applicable payment is encoded for garnishment, financial institutions must follow federal rules and may provide exemptions to accounts as appropriate.
    • Provisions for lookback look and reconciliation involving garnishment and administrative processes.

  • Possession and Puerto Rico specifics

    • The bill provides mirror-code treatment for possessions that have their own tax systems and specifies interactions with Puerto Rico’s existing tax system, including provisions for advance payments in Puerto Rico if applicable.

  • Outreach and implementation (Section 3)

    • Treasury, in coordination with community-based organizations, must run an outreach campaign to inform the public about the credit and assist eligibility and claiming.
    • Outreach priorities include underrepresented or financially underserved populations (those less likely to file taxes or hold bank accounts).

  • Effective dates

    • General amendments apply to taxable years beginning after December 31, 2026.
    • Monthly advance payments apply to calendar months beginning after December 31, 2026.

Who Would Be Affected

  • Eligible taxpayers aged 18 to 24 (as of each calendar month) with U.S. citizenship, nationality, or residency.
  • Dependents who are specified young adults could generate additional monthly allowances for the taxpayer claiming them.
  • Taxpayers residing in the United States or Puerto Rico for more than half of each month (with potential administrative rules to adjust for other jurisdictions or possessions).
  • Individuals and families seeking monthly advance tax relief rather than a single annual refund.

Procedural and Timeline Highlights

  • Establishment of a new credit and a related monthly advance payment system (look-back and reconciliation mechanics).
  • Requirement for Treasury to publish notices and administer an online portal; annual inflation-adjusted updates begin after 2027.
  • Outreach campaign to inform eligible individuals and to promote utilization, with particular emphasis on underserved groups.
  • Coordination with U.S. possessions and informational sharing with Puerto Rico and American Samoa as described.

Note: The bill is a proposal introduced May 26, 2026, and referred to the House Ways and Means Committee. It includes the usual regulatory and cross-referencing provisions to integrate the new credit into existing tax code sections and related filing and notice requirements.

Compiled from official sources — confirm details with the bill’s official record.

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