Bill Summary
The "Helping to Encourage Real Opportunities (HERO) for Youth Act of 2025" aims to amend the Internal Revenue Code to enhance the Work Opportunity Credit, specifically for youth employees.
Key provisions include:
1. **Expansion of Credit for Summer Youth**: The legislation modifies the eligibility criteria for the Work Opportunity Credit to allow employers to claim the credit for youth employed year-round, particularly those working up to 20 hours per week while attending secondary school. This change broadens the scope of eligible youth beyond just summer employment.
2. **Increase in Credit Amount**: The bill calls for an increase in the amount of the credit available to employers, making it more financially beneficial to hire youth.
3. **Support for Disconnected Youth**: The legislation introduces a specific credit for "disconnected youth," defined as individuals aged 16 to 25 who have not been engaged in education or regular employment for at least six months prior to hiring. This includes eligible foster children aged 16 to 21 who have recently been in foster care.
4. **Effective Date**: The changes will apply to individuals who begin working for an employer after the enactment of the Act.
Overall, the HERO Act seeks to provide greater incentives for employers to hire and support youth, particularly those facing barriers to employment, thereby promoting workforce participation among younger generations.
Possible Impacts
Here are three examples of how the "Helping to Encourage Real Opportunities (HERO) for Youth Act of 2025" could affect people:
1. **Increased Employment Opportunities for Youth**: The modification of the work opportunity credit to allow for year-round employment for youth could lead to greater job availability. Previously, the credit may have been restricted to summer employment, limiting opportunities for youth during the school year. With this change, employers may be more inclined to hire students for part-time jobs during the academic year, thereby helping youth gain work experience and financial independence.
2. **Financial Incentive for Employers**: The increase in the work opportunity credit amount for hiring youth, particularly those classified as "disconnected youth," provides a financial incentive for employers to hire individuals who may otherwise face barriers to employment. This could encourage businesses to create more entry-level job positions, thus contributing to local economies and fostering a more inclusive workforce.
3. **Support for Disconnected Youth**: By specifically targeting disconnected youth—defined as those who have not been in school or regular employment for an extended period—the legislation aims to assist a vulnerable population. This could lead to improved life outcomes for these individuals, as gaining employment may help them develop essential skills and a pathway to further education or stable employment, reducing reliance on social services and fostering self-sufficiency.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2507 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2507
To amend the Internal Revenue Code of 1986 to modify the work
opportunity credit for certain youth employees.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 31, 2025
Ms. Kelly of Illinois introduced the following bill; which was referred
to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify the work
opportunity credit for certain youth employees.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Helping to Encourage Real
Opportunities (HERO) for Youth Act of 2025''.
SEC. 2. MODIFICATION AND EXTENSION OF WORK OPPORTUNITY CREDIT FOR
CERTAIN YOUTH EMPLOYEES.
(a) Expansion of Credit for Summer Youth.--
(1) Credit allowed for year-round employment.--Section
51(d)(7)(A) of the Internal Revenue Code of 1986 is amended--
(A) by striking clauses (i) and (iii) and
redesignating clauses (ii) and (iv) as clauses (i) and
(ii), respectively;
(B) in clause (i) (as so redesignated), by striking
``(or if later, on May 1 of the calendar year
involved),'';
(C) by striking the period at the end of clause
(ii) (as so redesignated) and inserting ``, and''; and
(D) adding at the end the following new clause:
``(iii) who will be employed for not more
than 20 hours per week during any period
between September 16 and April 30 in which such
individual is regularly attending any secondary
school.''.
(2) Increase in credit amount.--Section 51(d)(7) of the
Internal Revenue Code of 1986 is amended by striking
subparagraph (B) and by redesignating subparagraph (C) as
subparagraph (B).
(3) Conforming amendments.--
(A) Subparagraph (F) of section 51(d)(1) of the
Internal Revenue Code of 1986 is amended by striking
``summer''.
(B) Paragraph (7) of section 51(d) of such Code is
amended--
(i) by striking ``summer'' each place it
appears in subparagraphs (A);
(ii) in subparagraph (B), as redesignated
by paragraph (2), by striking ``subparagraph
(A)(iv)'' and inserting ``subparagraph
(A)(ii)''; and
(iii) by striking ``summer'' in the heading
thereof.
(b) Credit for Disconnected Youth.--
(1) In general.--Paragraph (1) of section 51(d) of the
Internal Revenue Code of 1986 is amended by striking ``or'' at
the end of subparagraph (I), by striking the period at the end
of subparagraph (J) and inserting ``, or'', and by adding at
the end the following new subparagraph:
``(K) an disconnected youth.''.
(2) Disconnected youth.--Paragraph (14) of section 51(d) of
such Code is amended to read as follows:
``(14) Disconnected youth.--The term `disconnected youth'
means any individual who--
``(A)(i) is certified by the designated local
agency as having attained age 16 but not age 25 on the
hiring date, and
``(ii) has self-certified (on a form prescribed by
the Secretary) that such individual--
``(I) has not regularly attended any
secondary, technical, or post-secondary school
during the 6-month period preceding the hiring
date,
``(II) has not been regularly employed
during such 6-month period, and
``(III) is not readily employable by reason
of lacking a sufficient number of basic skills,
or
``(B) is certified by the designated local agency
as--
``(i) having attained age 16 but not age 21
on the hiring date, and
``(ii) an eligible foster child (as defined
in section 152(f)(1)(C)) who was in foster care
during the 12-month period ending on the hiring
date.''.
(c) Effective Date.--The amendments made by this section shall
apply to individuals who begin work for the employer after the date of
the enactment of this Act.
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