Overview
Title
To amend the Internal Revenue Code of 1986 to modify the social security number requirements for claiming the child tax credit and earned income tax credit.
ELI5 AI
The Safeguarding American Workers’ Benefits Act wants to change the rules so that when people ask for certain money back from taxes because they have kids or work, they need to use special numbers from the government called social security numbers, and these rules would start after 2025.
Summary AI
H. R. 778, titled the “Safeguarding American Workers’ Benefits Act,” proposes changes to the Internal Revenue Code of 1986. It requires taxpayers to provide social security numbers for themselves and their children when claiming the child tax credit and earned income tax credit. The bill specifies that these social security numbers must be issued by the Social Security Administration to U.S. citizens or certain residents before the tax return's due date. If enacted, these changes would start applying to tax years beginning after December 31, 2025.
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AnalysisAI
General Summary of the Bill
This bill seeks to amend the Internal Revenue Code of 1986, specifically focusing on the social security number requirements for claiming two significant tax credits: the child tax credit and the earned income tax credit. The proposed changes would take effect for taxable years starting after December 31, 2025. The primary modification is that taxpayers must provide their own social security numbers, as well as those of their qualifying children, on their tax returns to claim these credits. These social security numbers must be issued by the Social Security Administration and pertain to U.S. citizens or be issued under specific legal conditions.
Summary of Significant Issues
One notable issue is the bill's short title, "Safeguarding American Workers’ Benefits Act." This title may appear misleading as it suggests a broader scope related to worker benefits, when, in fact, the bill specifically targets social security number requirements for tax credits. This could potentially lead to misunderstandings about the bill's focus among the public and impacted stakeholders.
Impact on the Public
For the general public, particularly taxpayers who claim the child tax credit or earned income tax credit, this bill emphasizes the need for more stringent documentation. By requiring social security numbers for both parents and children, it aims to improve the accuracy and enforcement of these tax credits. This could lead to some individuals failing to qualify for the credits if they cannot meet the documentation requirements, potentially decreasing fraudulent claims and preserving public trust in the tax credit system. However, it may also add a layer of complexity and administrative burden for taxpayers.
Impact on Specific Stakeholders
Positive Impact
- Government Agencies: For the Internal Revenue Service (IRS) and the Social Security Administration, this bill could streamline the verification process for these tax credits, making it easier to identify and prevent fraudulent claims, thus potentially safeguarding public funds.
Negative Impact
Taxpayers with Difficulties in Document Compliance: Some taxpayers, particularly those with unique or challenging circumstances, such as having children born abroad or undocumented parents, may face difficulties in obtaining the necessary social security numbers promptly. This could lead to delays or denials in receiving much-needed financial assistance through tax credits.
Tax Preparers and Accountants: Professionals assisting individuals with tax preparation may face increased workload and complexity as they help clients navigate the new requirements and ensure compliance.
Overall, while the bill targets improving the integrity of tax credit claims, it necessitates careful consideration of its potential administrative impact on taxpayers and those assisting with tax filing.
Issues
The short title 'Safeguarding American Workers' Benefits Act' as mentioned in Section 1 may not accurately reflect the scope and purpose of the legislation, which pertains specifically to modifying social security number requirements for tax credits, not safeguarding workers' benefits generally. This might lead to public misunderstanding of the bill's content and objectives.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
In SECTION 1, the act is officially titled the “Safeguarding American Workers’ Benefits Act”.
2. Modification of social security number requirements for claiming the child tax credit and earned income tax credit Read Opens in new tab
Summary AI
This section modifies the requirements for using social security numbers to claim the child tax credit and earned income tax credit. Starting for tax years after December 31, 2025, taxpayers must provide their own and their qualifying child's social security numbers on their tax return, and these numbers must be issued by the Social Security Administration to U.S. citizens or as specified by law.