(a) Short title

This Act may be cited as the All-Americans Tax Relief Act of 2025.

(b) References

Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

(c) Table of contents

The table of contents for this Act is as follows:

(a) Decrease in phaseout percentage

Section 32(b)(1) is amended to read as follows:

(1) Percentages

The credit percentage and phaseout percentage shall be determined as follows:

In the case of an eligible individual with:	The credit percentage is:	The phaseout percentage is:
1 qualifying child	38	20
2 qualifying children	43	25
3 or more qualifying children	45	25
No qualifying children	30 (35 in the case of a joint return)	15

(b) Increase in maximum credit amount

Section 32(b)(2) is amended to read as follows:

(2) Amounts

(B) Earned income amount

The term earned income amount means—

(i)

in the case of an eligible individual with 1 qualifying child, $15,000,

(ii)

in the case of an individual with 2 or more qualifying children, $20,000, or

(iii)

in the case of an individual with no children—

(I)

in the case of a joint return, $10,000, or

(II)

in the case of any other individual, $8,500.

(C) Phaseout amount

The phaseout amount shall be—

(i)

$47,120 in the case of a joint return, or

(ii)

$40,000 in the case of any other individual.

(c) Conforming amendment

Section 32(j)(1) is amended to read as follows:

(1) In general

In the case of any taxable year beginning after 2027 (2021 in the case of the dollar amount in subsection (i)(1)), each of the dollar amounts in subsections (b)(2) and (i)(1) shall be increased by an amount equal to—

(A)

such dollar amount, multiplied by

(B)

The cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting in subparagraph (A)(ii) thereof—

(i)

in the case of amounts in subsection (b)(2), calendar year 2026 for calendar year 2016, and

(ii)

in the case of the $10,000 amount in subsection (i)(1), calendar year 2020 for calendar year 2016.

(d) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

(a) In general

Subpart C of part IV of subchapter A of chapter 1 of subtitle A is amended by inserting after section 36B the following new section:

36D. Child tax credit

(a) Allowance of credit

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of—

(1)

$2,000 for each of up to 3 qualifying children of the taxpayer for which the taxpayer is allowed a deduction under section 151, plus

(2)

$500 for each other such qualifying child of the taxpayer.

(b) Limitations

(1) Limitation based on adjusted gross income

The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds the threshold amount. For purposes of the preceding sentence, the term modified adjusted gross income means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.

(2) Threshold amount

For purposes of paragraph (1), the term threshold amount means—

(A)

$110,000 in the case of a joint return,

(B)

$75,000 in the case of an individual who is not married, and

(C)

$55,000 in the case of a married individual filing a separate return.

For purposes of this paragraph, marital status shall be determined under section 7703.

(c) Qualifying child

For purposes of this section—

(1) In general

The term qualifying child means a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 17.

(2) Exception for certain noncitizens

The term qualifying child shall not include any individual who would not be a dependent if subparagraph (A) of section 152(b)(3) were applied without regard to all that follows resident of the United States.

(d) Social security number required

No credit shall be allowed under this section to a taxpayer with respect to any qualifying child unless the taxpayer includes the social security number of the taxpayer (and the taxpayer’s spouse, in the case of a joint return) and of such child on the return of tax for the taxable year. For purposes of the preceding sentence, the term social security number means a social security number issued to an individual by the Social Security Administration, but only if the social security number is issued—

(1)

to a citizen of the United States or pursuant to subclause (I) (or that portion of subclause (III) that relates to subclause (I)) of section 205(c)(2)(B)(i) of the Social Security Act, and

(2)

before the due date for such return.

(e) Taxable year must be full taxable year

Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months.

(f) Restrictions on taxpayers who improperly claimed credit in prior year

(1) Taxpayers making prior fraudulent or reckless claims

(A) In general

No credit shall be allowed under this section for any taxable year in the disallowance period.

(B) Disallowance period

For purposes of subparagraph (A), the disallowance period is—

(i)

the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of credit under this section was due to fraud, and

(ii)

the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud).

(2) Taxpayers making improper prior claims

In the case of a taxpayer who is denied credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit.

(g) Application of credit in possessions

(1) Mirror code possessions

(A) In general

The Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning after 2020. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession.

(B) Coordination with credit allowed against United States income taxes

No credit shall be allowed under this section for any taxable year to any individual to whom a credit is allowable against taxes imposed by a possession of the United States with a mirror code tax system by reason of the application of this section in such possession for such taxable year.

(C) Mirror code tax system

For purposes of this paragraph, the term mirror code tax system means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.

(2) Puerto Rico

The credit determined under this section shall be allowable to any bona fide resident of Puerto Rico (within the meaning of section 937(a)).

(3) American Samoa

(A) In general

The Secretary shall pay to American Samoa amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of American Samoa by reason of the application of this section for taxable years beginning after 2020 if the provisions of this section had been in effect in American Samoa (applied as if American Samoa were the United States and without regard to the application of this section to bona fide residents of Puerto Rico under subsection (i)(1)).

(B) Distribution requirement

Subparagraph (A) shall not apply unless American Samoa has a plan, which has been approved by the Secretary, under which American Samoa will promptly distribute such payments to its residents.

(C) Coordination with credit allowed against United States income taxes

(i) In general

In the case of a taxable year with respect to which a plan is approved under subparagraph (B), this section (other than this subsection) shall not apply to any individual eligible for a distribution under such plan.

(ii) Application of section in event of absence of approved plan

In the case of a taxable year with respect to which a plan is not approved under subparagraph (B) rules similar to the rules of paragraph (2)(B) shall apply with respect to bona fide residents of American Samoa (within the meaning of section 937(a)).

(4) Treatment of payments

For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.

(h) Inflation adjustment

(1) In general

In the case of any taxable year beginning after 2025, the dollar amounts in subsections (a) and (b) shall be increased by an amount equal to—

(A)

such dollar amount, multiplied by

(B)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2024 for calendar year 2016 in subparagraph (A)(ii) thereof.

(2) Rounding

If any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.

(b) Clerical amendment

The table of sections for subpart C of part IV of subchapter A of chapter 1 of subtitle A is amended by inserting after the item relating to section 36B the following new section:

(c) Conforming amendments

(d) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

(a) Threshold removed

Section 213(a) is amended by striking , to the extent and all that follows through gross income.

(b) Deduction allowed to non-Itemizers

Section 63(b) is amended by striking and at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting , and, and by adding at the end the following new paragraph:

(5)

the deduction provided in section 213.

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

(a) In general

Part VI of subchapter B of chapter 1 of subtitle A is amended by redesignating section 224 as section 225 and inserting after section 223 the following new section:

224. Daycare expenses

(a) In general

In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the qualified daycare expenses of the individual for such taxable year.

(b) Qualified daycare expenses

For purposes of this section, the term qualified daycare expenses means the amounts paid or incurred by the individual as tuition for a dependent of the taxpayer who has not attained the age of 7 to attend a childcare institution (as defined in section 1355.20 of title 45, Code of Federal Regulations).

(b) Deduction allowed to non-Itemizers

Section 63(b) (as amended by section 4) is further amended by striking and at the end of paragraph (4), by striking the period at the end of paragraph (5) and inserting , and, and by adding at the end the following new paragraph:

(6)

the deduction provided in section 224.

(c) Clerical amendment

The table of sections for part VI of subchapter B of chapter 1 of subtitle A is amended by striking the item relating to section 224 and inserting the following new items:

(d) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

(a) In general

Part VI of subchapter B of chapter 1 of subtitle A is further amended by redesignating section 225 as section 226 and inserting after section 224 the following new section:

225. Commuting expenses

(a) In general

In the case of an eligible individual, there shall be allowed as a deduction for the taxable year an amount equal to the qualified commuting expenses of the individual for such taxable year.

(b) Qualified commuting expenses

For purposes of this section, the term qualified commuting expenses means the amounts paid or incurred by the individual to use public transit to travel between such individual’s principal residence (as such term is used in section 121) and such individual’s place of work at which such individual works not less than 20 hours per week (determined by averaging the number of hours worked at such location during the taxable year over the number of weeks such individual is employed by the same employer at the same location during such taxable year).

(c) Eligible individual

(1) In general

For purposes of this section, the term eligible individual means an individual whose modified adjusted gross income does not exceed—

(A)

$250,000 in the case of a joint return, and

(B)

$125,000 in the case of any other individual.

(2) Modified adjusted gross income

For purposes of this section, the term modified adjusted gross income means adjusted gross income increased by an amount excluded from gross income under sections 911, 931, and 933.

(d) Regulations

Not later than January 1, 2027, the Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including—

(1)

identifying qualified commuting expenses, and

(2)

establishing a process to verify such expenses incurred by individuals.

(b) Deduction allowed to non-Itemizers

Section 63(b) is further amended by striking and at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting , and, and by adding at the end the following new paragraph:

(7)

the deduction provided in section 225.

(c) Clerical amendment

The table of sections for part VI of subchapter B of chapter 1 of subtitle A is further amended by striking the item relating to section 225 (as amended by section 5) and inserting the following new items:

(d) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

(a) In general

Part VI of subchapter B of chapter 1 of subtitle A is further amended by redesignating section 226 as section 227 and inserting after section 225 the following new section:

226. Tutoring expenses

(a) In general

In the case of an eligible individual, there shall be allowed as a deduction for the taxable year an amount equal to so much of the qualified tutoring expenses of the individual for such taxable year as does not exceed $2,500.

(b) Qualified tutoring expenses

For purposes of this section—

(1) In general

The term qualified tutoring expenses means the amounts paid or incurred by the individual for tutoring services for a dependent of the taxpayer who attends a public elementary school or public secondary school (as defined in section 8101 of the Elementary and Secondary Education Act of 1965) eligible for funds under part A of title I of the Elementary or Secondary Education Act of 1965 or any charter school (as defined in section 4310 of such Act).

(2) Tutoring services

The term tutoring services means direct tutoring of a student—

(A)

in a group of not more than 4 students per instructor,

(B)

for the purpose of increasing academic achievement in reading, math, science, writing and language arts, social studies, history, civics, or a foreign language,

(C)

through planned sessions of not less than 1 hour and not more than 3 hours which occur—

(i)

not less frequently than once per week for 6 consecutive weeks, or

(ii)

not less frequently than once per week for 9 weeks during a 1-year period, consistent, one-on-one or small-group sessions.

(c) Regulations

The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section.

(b) Deduction allowed to non-Itemizers

Section 63(b) is further amended by striking and at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting , and, and by adding at the end the following new paragraph:

(7)

the deduction provided in section 226.

(c) Clerical amendment

The table of sections for part VI of subchapter B of chapter 1 of subtitle A is further amended by striking the item relating to section 226 (as added by section 6) and inserting the following new items:

(d) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

(a) In general

Part VI of subchapter B of chapter 1 of subtitle A is further amended by redesignating section 227 as section 228 and inserting after section 226 the following new section:

227. Credit card interest payments

(a) In general

In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to so much of the interest paid by the individual during the taxable year on an open-end credit plan involving a credit card as does not exceed $2,500.

(b) Definitions

The terms open end consumer credit plan and credit card have the meaning given such terms in section 103 of the Truth in Lending Act.

(b) Deduction allowed to non-Itemizers

Section 63(b) is further amended by striking and at the end of paragraph (6), by striking the period at the end of paragraph (7) and inserting , and, and by adding at the end the following new paragraph:

(8)

the deduction provided in section 227.

(c) Clerical amendment

The table of sections for part VI of subchapter B of chapter 1 of subtitle A is further amended by striking the item relating to section 226 (as added by section 6) and inserting the following new items:

(d) Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2026.

(a) In general

Part VI of subchapter B of chapter 1 of subtitle A is further amended by redesignating section 228 as section 229 and inserting after section 227 the following new section:

228. Rent

(a) In general

In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the qualifying rent payments of such individual for the taxable year.

(b) Qualifying rent payments

For purposes of this section, the term qualifying rent payments means amounts paid by the individual in rent for such individual’s principal residence (as such term is used in section 121).

(c) Income phaseout

(1) In general

The amount of the deduction determined under subsection (a) shall be reduced (but not below zero) by an amount equal to 1 percent for every $500 ($1,000 in the case of a joint return) or fraction thereof by which such individual’s modified adjusted gross income exceeds the applicable threshold.

(2) Applicable threshold

For purposes of this subsection, the term applicable threshold means—

(A)

$150,000 in the case of a joint return, or

(B)

$75,000 in the case of any other individual.

(3) Modified adjusted gross income

For purposes of this section, the term modified adjusted gross income means adjusted gross income increased by an amount excluded from gross income under sections 911, 931, and 933.

(b) Deduction allowed to non-Itemizers

Section 63(b) is further amended by striking and at the end of paragraph (8), by striking the period at the end of paragraph (9) and inserting , and, and by adding at the end the following new paragraph:

(10)

the deduction provided in section 228.

(c) Clerical amendment

The table of sections for part VI of subchapter B of chapter 1 of subtitle A is further amended by striking the item relating to section 228 (as added by section 8) and inserting the following new items:

(d) Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2026.

(a) In general

Section 108(a)(1)(E) is amended to read as follows:

(E)

the taxpayer is an individual.

(b) Coordination of exclusions

Section 108(a)(2) is amended—

(c) Conforming amendments

(d) Effective date

The amendments made by this section shall apply to debt incurred after December 31, 2026.

(a) In general

Section 1(h)(1)(D) is amended by striking 20 percent and inserting 25 percent.

(b) Effective date

The amendment made by this section shall apply to taxable years beginning December 31, 2026.