Dependent Income Exclusion Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2497 To amend the Internal Revenue Code of 1986 to exclude certain dependent income when calculating modified adjusted gross income for the purposes of eligibility for premium tax credits. IN THE SENATE OF THE UNITED STATES SEPTEMBER 18, 2019 Ms. CORTEZ MASTO (for herself, Mr. BROWN, and Ms. ROSEN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to exclude certain dependent income when calculating modified ad- justed gross income for the purposes of eligibility for premium tax credits. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Dependent Income Ex- 4 clusion Act of 2019’’. 5 VerDate Sep 11 2014 20:45 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2497.IS S2497 lotter on DSKBCFDHB2PROD with BILLS 2 •S 2497 IS SEC. 2. EXCLUSION OF CERTAIN DEPENDENT INCOME FOR 1 PURPOSES OF PREMIUM TAX CREDIT. 2 (a) IN GENERAL.—Paragraph (2) of section 36B(d) 3 of the Internal Revenue Code of 1986 is amended by add- 4 ing at the end the following new subparagraph: 5 ‘‘(C) EXCEPTION FOR CERTAIN DEPEND- 6 ENT INCOME.— 7 ‘‘(i) IN GENERAL.—There shall not be 8 taken into account under subparagraph 9 (A)(ii) any wages (determined under sec- 10 tion 3401(a)) or net earnings from self-em- 11 ployment (as defined in section 1402(a)) of 12 any dependent of the taxpayer who— 13 ‘‘(I) has not attained age 18 as 14 of the last day of the calendar year in 15 which the taxable year of the taxpayer 16 begins, or 17 ‘‘(II) has not attained age 24 as 18 of the last day of such calendar year 19 and, during each of 5 calendar 20 months during such calendar year, is 21 described in subparagraph (A) or (B) 22 of section 152(f)(2) (applied by sub- 23 stituting ‘part-time or full-time’ for 24 ‘full-time’ each place it appears, and 25 by deeming any for-profit educational 26 VerDate Sep 11 2014 20:56 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2497.IS S2497 lotter on DSKBCFDHB2PROD with BILLS 3 •S 2497 IS institution not to be an educational 1 organization described in section 2 170(b)(1)(A)(ii)), is participating in a 3 qualified job-training program, or is 4 participating in an apprenticeship pro- 5 gram registered under the Act of Au- 6 gust 16, 1937 (commonly known as 7 the ‘National Apprenticeship Act’; 50 8 Stat. 664, chapter 663; 29 U.S.C. 50 9 et seq.). 10 ‘‘(ii) QUALIFIED JOB-TRAINING PRO- 11 GRAM.—For purposes of this subpara- 12 graph, the term ‘qualified job-training pro- 13 gram’ means any program of training serv- 14 ices described in section 134(c)(3) of the 15 Workforce Innovation and Opportunity Act 16 (29 U.S.C. 3174(c)(3)). 17 ‘‘(iii) LIMITATION.—Clause (i) shall 18 not apply to so much of the aggregate in- 19 come of all dependents of the taxpayer as 20 exceeds an amount equal to 15 percent of 21 the modified adjusted gross income of the 22 taxpayer. 23 ‘‘(iv) TAXPAYERS RESIDING IN MED- 24 ICAID NON-EXPANSION STATES.—In the 25 VerDate Sep 11 2014 20:56 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2497.IS S2497 lotter on DSKBCFDHB2PROD with BILLS 4 •S 2497 IS case of a taxpayer residing in a State 1 which (as of the first day of the taxable 2 year) does not provide for eligibility under 3 clause (i)(VIII) or (ii)(XX) of section 4 1902(a)(10)(A) of the Social Security Act 5 for medical assistance under title XIX of 6 such Act (or a waiver of the State plan ap- 7 proved under section 1115 of the Social 8 Security Act), clause (i) shall apply to any 9 dependent of such taxpayer only to the ex- 10 tent that the application of such clause 11 would not reduce the household income 12 below 100 percent of the amount equal to 13 the poverty line for a family of the size in- 14 volved.’’. 15 (b) CONFORMING AMENDMENTS.— 16 (1) Clause (ii) of section 36B(d)(2)(A) of the 17 Internal Revenue Code of 1986 is amended by in- 18 serting ‘‘, except as provided in subparagraph (C),’’ 19 after ‘‘individuals’’. 20 (2) Paragraph (3) of section 1411(b) of the Pa- 21 tient Protection and Affordable Care Act (42 U.S.C. 22 18081) is amended by adding at the end the fol- 23 lowing new subparagraph: 24 VerDate Sep 11 2014 20:56 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2497.IS S2497 lotter on DSKBCFDHB2PROD with BILLS 5 •S 2497 IS ‘‘(D) INFORMATION REGARDING CERTAIN 1 DEPENDENTS.—Information regarding whether 2 section 36B(d)(2)(C) will apply to any individ- 3 uals taken into account as members of the 4 household of the enrollee, and the amount of in- 5 come from employment of each such individual 6 for the taxable year described in subparagraph 7 (A).’’. 8 (c) EFFECTIVE DATE.—The amendments made by 9 this section shall apply to credits allowed under section 10 36B of the Internal Revenue Code of 1986 for, and ad- 11 vance payments of credits under section 1412 of the Pa- 12 tient Protection and Affordable Care Act with respect to, 13 taxable years beginning after the date of the enactment 14 of this Act. 15 Æ VerDate Sep 11 2014 20:56 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S2497.IS S2497 lotter on DSKBCFDHB2PROD with BILLS