AARP Fights Age Discrimination in Tax Code

AARP is urging Congress to permanently remove the upper age limit on a tax credit program that prevents claims by some workers 65-plus.

The Earned Income Tax Credit (EITC) is a federal tax credit mostly available to lower-income workers that are taking care of children, grandchildren or other relatives who meet certain criteria. In certain cases, however, lower-income workers not taking care of such relatives may also be eligible for the benefit. But the current catch is they must be between the ages of 25 and 64. 

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That represents a “blatant form of age discrimination,” according to Bill Sweeney, the senior vice president for government affairs at AARP.

On Aug. 13, AARP endorsed a new bill, the EITC for Older Workers Act, that would remove the age cap. In a letter to its co-sponsors, U.S. Reps. Mike Carey (R-Ohio) and Danny K. Davis (D-Ill.), AARP praised the bipartisan bill for the relief it would bring to lower-income older workers, plus the positive boost it would have on America’s labor force and economy.

“This bill is a true win-win,” wrote AARP’s Sweeney.

Easing the tax burden for older workers

Removing the EITC’s upper age cap would specifically help the growing number of workers 65-plus not living with children, grandchildren or other qualifying relatives, and earning up to $18,591 (or $25,511 if married filing jointly). Those workers would become eligible for credits of up to $632 in the 2024 tax year, if they meet other criteria as well.

In 2021, when the age cap was temporarily removed under a pandemic relief law, roughly 1.6 million older workers benefited, noted AARP’s letter. Today, the number of older workers who would qualify for a credit is roughly 2 million, Davis said in a statement.

And that number is likely to keep growing. Workers 65-plus represent the fastest-growing segment of the labor force, according to data from the U.S. Bureau of Labor Statistics. They account for more than 60 percent of the projected labor force growth over the 2020–30 decade.

“The workforce has changed significantly since the EITC was established in 1975,” said Carey in a statement. “Many of us are working longer, and a rising retirement age should be reflected in the program.”

Removing the tax increase that occurs at 65 due to the EITC cap may also entice older workers to remain on the job longer, which could address current labor shortages, we noted in our letter.

“The EITC has an added benefit of bringing in revenues to businesses, states and local communities, which has a ripple effect throughout the economy,” wrote AARP’s Sweeney. “These dollars help to sustain local companies and workers by creating jobs, wages, and salaries immediately and in the future.”

Keep up with AARP’s financial coverage and if you need help with your taxes, AARP Foundation Tax-Aide can assist at no cost.