AARP is calling on Congress to permanently remove the upper age limit on a tax credit program that ineligibles some workers over 65.
The Earned Income Tax Credit (EITC) is a federal tax credit available primarily to low-income earners who care for children, grandchildren, or other relatives who meet certain criteria. However, in certain cases, low-income earners who do not care for such relatives may also be eligible for the benefit. The current catch, however, is that they must be between the ages of 25 and 64.
According to Bill Sweeney, senior vice president for government affairs at AARP, this represents a “blatant form of age discrimination.”
On August 13, AARP endorsed a new bill, the EITC for Older Workers Act, that would eliminate the age limit. In a letter to co-signers U.S. Reps. Mike Carey (Republican, Ohio) and Danny K. Davis (Democrat, Illinois), AARP praised the bipartisan bill for the relief it would bring to older, low-income workers, as well as the positive boost it would have for America’s workforce and economy.
“This bill is a true win-win,” wrote AARP’s Sweeney.
Tax relief for older employees
Removing the age cap on the EITC would help a growing number of older workers who remain in the workforce beyond age 65. “The workforce has changed significantly since the EITC was created in 1975,” Rep. Carey said in a statement. “Many of us are working longer, and a rising retirement age should be reflected in the program.”
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In 2021, when the age limit was temporarily lifted as part of a pandemic relief bill, about 1.6 million older workers benefited, the AARP letter said. Today, the number of older workers eligible for a credit is about 2 million, Rep. Davis added in a statement.
And that number is expected to continue to rise. According to data from the U.S. Bureau of Labor Statistics (BLS), workers over 65 are the fastest-growing segment of the workforce, accounting for more than 60 percent of projected labor force growth in the 2020-2030 decade.
Eliminating the tax increase that occurs because of the EITC cap at age 65 could encourage older workers to stay in the workforce longer, which could help address the current labor shortage, as we noted in our letter.
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“The EITC has the added benefit of generating revenue for businesses, states and local communities, which impacts the entire economy,” AARP’s Sweeney wrote. “This money helps support local businesses and workers by creating jobs, wages and salaries immediately and in the future.”
Stay up to date with AARP’s financial reporting, and if you need help with your taxes, the AARP Foundation Tax-Aide can assist you at no cost.
