S. 3770: Strong Start Act

The Strong Start Act, introduced in the 119th Congress, proposes several changes to the Internal Revenue Code with a focus on supporting families and children. The key provisions of the bill are outlined below:

New Child Payments

This section establishes a new tax credit for eligible taxpayers, which amounts to $3,000 for each eligible new child. The credit would be paid within 30 days of a taxpayer filing a claim. The amount of the credit is subject to inflation adjustments starting in 2026, which means that over time, the value of the credit will increase based on the cost of living.

• An eligible new child can be defined as:
  • A child born to the taxpayer after the enactment of the section.
  • A child adopted by the taxpayer after the enactment.
  • A child placed with the taxpayer by an authorized agency after the enactment.
• Eligibility for the credit is limited to those who can provide a taxpayer identification number.
• Payments made under this section are protected from reduction or offset due to other federal tax liabilities.

American Dream Accounts

This section updates certain provisions concerning what are termed "American Dream accounts," which were previously known as "Trump accounts." This includes renaming the accounts throughout the relevant sections of the tax code.

The legislation extends and indexes a government contribution program for these accounts. Adjustments will be made regularly for inflation, and the bill establishes that amounts in these accounts will not affect eligibility for some means-tested programs until the individual reaches age 18. However, for individuals over this age, amounts exceeding $100,000 in the accounts will be considered when determining eligibility for benefits.

Additional Contributions

The act introduces additional contributions to American Dream accounts, aimed particularly at families with dependent children. The contributions are as follows:

• If the taxpayer is eligible for the Earned Income Tax Credit (EITC), they may receive $750 plus contributions made to the account during the taxable year (up to $250).
• All other eligible taxpayers are entitled to $500 for their qualifying children.

Further, these amounts will also be adjusted for inflation starting from 2027.

Means-Tested Program Coordination

The Act specifies that funds in American Dream accounts will not be considered when determining eligibility for certain means-tested federal assistance programs until the individual turns 18. For those affected by the Supplemental Security Income (SSI) program, benefits will be suspended, not terminated, if account balances exceed allowable resources.

Automatic Enrollment

Within one year of the Act's enactment, the Secretary of the Treasury is mandated to establish a program for the automatic enrollment of eligible individuals in American Dream accounts. This aims to ease the process for qualifying individuals to access these accounts and receive benefits associated with them.

Relevant Companies

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