WRCR Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 5271 To amend the Internal Revenue Code of 1986 to expand and improve the earned income tax credit. IN THE HOUSE OF REPRESENTATIVES NOVEMBER 26, 2019 Ms. MOORE (for herself, Ms. FUDGE, Mr. BISHOP of Georgia, Ms. BASS, Ms. LEE of California, Mr. CLAY, Mrs. CAROLYN B. MALONEY of New York, Mr. DANNY K. DAVIS of Illinois, Mr. RUSH, Mr. BUTTERFIELD, Mrs. WATSON COLEMAN, Ms. OMAR, Ms. JACKSON LEE, Ms. NORTON, Ms. SCHAKOWSKY, Mr. COHEN, Ms. TLAIB, Mr. POCAN, Mr. NADLER, Ms. ESCOBAR, Mr. HASTINGS, Ms. JAYAPAL, Ms. JUDY CHU of California, Mr. HUFFMAN, Mrs. LAWRENCE, Ms. PRESSLEY, Mr. GARCI´A of Illinois, Mr. KHANNA, Ms. GARCIA of Texas, Ms. HAALAND, Mr. GRIJALVA, Mr. CICILLINE, and Mr. RYAN) introduced the following bill; which was re- ferred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to expand and improve the earned income tax credit. 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 ‘‘Worker Relief and 4 Credit Reform Act of 2019’’ or as the ‘‘WRCR Act of 5 2019’’. 6 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 2 •HR 5271 IH SEC. 2. EXPANSION AND IMPROVEMENT OF EARNED IN- 1 COME TAX CREDIT. 2 (a) APPLICATION TO STUDENTS.— 3 (1) IN GENERAL.—Section 32(c)(1)(A)(i) of the 4 Internal Revenue Code of 1986 is amended by in- 5 serting ‘‘who is a qualifying student or’’ after ‘‘any 6 individual’’. 7 (2) QUALIFYING STUDENT.—Section 32(c) of 8 such Code is amended by redesignating paragraph 9 (4) as paragraph (5) and inserting after paragraph 10 (3) the following new paragraph: 11 ‘‘(4) QUALIFYING STUDENT.— 12 ‘‘(A) IN GENERAL.—The term ‘qualifying 13 student’ means, with respect to any taxable 14 year, any individual who— 15 ‘‘(i) is an eligible student (as defined 16 in section 25A(b)(3)) with respect to at 17 least one academic period beginning during 18 such taxable year, 19 ‘‘(ii) either— 20 ‘‘(I) qualifies for a Federal Pell 21 Grant with respect to such academic 22 period, or 23 ‘‘(II) meets the requirements of 24 subparagraph (B) or (C) for the tax- 25 able year, and 26 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 3 •HR 5271 IH ‘‘(iii) is not a dependent for whom a 1 deduction is allowable under section 151 to 2 another taxpayer for any taxable year be- 3 ginning in the same calendar year as such 4 taxable year. 5 ‘‘(B) INDEPENDENT STUDENTS.—In the 6 case of any independent student, the require- 7 ments of this subparagraph are met for such 8 taxable year if the household income of the tax- 9 payer is less than 300 percent of the poverty 10 line for the size of the family involved for the 11 taxable year. 12 ‘‘(C) OTHER STUDENTS.— 13 ‘‘(i) IN GENERAL.—In the case of any 14 individual who is not an independent stu- 15 dent, the requirements of this subpara- 16 graph are met for such taxable year if the 17 aggregate household incomes of all the in- 18 dividual’s specified supporters (and the 19 taxpayer if not otherwise taken into ac- 20 count) for the taxable years of such sup- 21 porters which end in or with the calendar 22 year in which such individual’s taxable 23 year begins is less than 300 percent of the 24 poverty line for the size of the family in- 25 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 4 •HR 5271 IH volved (determined on a single aggregate 1 basis) for the taxable year. 2 ‘‘(ii) SPECIFIED SUPPORTER.—The 3 term ‘specified supporter’ means, with re- 4 spect to any individual described in clause 5 (i), any taxpayer with respect to whom 6 such individual was a dependent for any 7 taxable year ending in the 3-year period 8 described in subparagraph (D)(i). 9 ‘‘(D) INDEPENDENT STUDENT DEFINED.— 10 ‘‘(i) IN GENERAL.—The term ‘inde- 11 pendent student’ means any individual if 12 such individual was not a dependent of an- 13 other taxpayer for any taxable year ending 14 in the 3-year period which ends on the 15 first day of the first academic period with 16 respect to which such individual is an eligi- 17 ble student (as defined in section 18 25A(b)(3)). 19 ‘‘(ii) CERTAIN ACADEMIC PERIODS 20 DISREGARDED.—An academic period shall 21 be disregarded under clause (i) if such aca- 22 demic period ends more than 2 years be- 23 fore the beginning of the next academic pe- 24 riod with respect to which the individual is 25 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 5 •HR 5271 IH an eligible student (as defined in section 1 25A(b)(3)). 2 ‘‘(E) OTHER DEFINITIONS.— 3 ‘‘(i) HOUSEHOLD INCOME.—The term 4 ‘household income’ has the meaning given 5 such term in section 36B(d)(2). 6 ‘‘(ii) POVERTY LINE.—The term ‘pov- 7 erty line’ has the meaning given such term 8 in section 36B(d)(3)(A). 9 ‘‘(iii) FAMILY SIZE.—The family size 10 involved with respect to any taxpayer shall 11 be determined under rules similar to the 12 rules of section 36B(d)(1).’’. 13 (3) CONFORMING AMENDMENT.—Section 14 32(c)(1)(A)(ii) of such Code is amended by striking 15 ‘‘any other individual who does not have a qualifying 16 child’’ and inserting ‘‘any individual not described in 17 clause (i)’’. 18 (b) MODIFICATION OF AGE REQUIREMENTS.—Sec- 19 tion 32(c)(1)(A)(ii)(II) of such Code is amended by strik- 20 ing ‘‘has attained age 25 but not attained age 65’’ and 21 inserting ‘‘has attained age 18’’. 22 (c) CARE-GIVING AND LEARNING TAKEN INTO AC- 23 COUNT AS COMPENSATED WORK.—Section 32(a) of such 24 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 6 •HR 5271 IH Code is amended by adding at the end the following new 1 paragraph: 2 ‘‘(3) SPECIAL RULE FOR QUALIFYING STU- 3 DENTS AND CERTAIN INDIVIDUALS WITH ONE OR 4 MORE QUALIFYING DEPENDENTS.—For purposes of 5 paragraph (1), any individual— 6 ‘‘(A) who is a qualifying student, or 7 ‘‘(B) who has a qualifying dependent, 8 shall be treated as having earned income for the tax- 9 able year which is equal to the earned income 10 amount with respect to such individual for such tax- 11 able year.’’. 12 (d) TREATMENT OF CERTAIN QUALIFYING REL- 13 ATIVES.— 14 (1) IN GENERAL.—Section 32(c)(3) of such 15 Code is amended by striking all that precedes sub- 16 paragraph (B) and inserting the following: 17 ‘‘(3) QUALIFYING DEPENDENT.— 18 ‘‘(A) IN GENERAL.—The term ‘qualifying 19 dependent’ means— 20 ‘‘(i) a qualifying child of the taxpayer, 21 as defined in section 152(c), determined— 22 ‘‘(I) by substituting ‘12’ for ‘19’ 23 in paragraph (3)(A)(i) thereof, and 24 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 7 •HR 5271 IH ‘‘(II) without regard to para- 1 graphs (1)(D) and (3)(A)(ii) thereof 2 and section 152(e), 3 ‘‘(ii) any individual who is physically 4 or mentally incapable of caring for himself 5 or herself (within the meaning of section 6 21(b)(1)) and who— 7 ‘‘(I) is the taxpayer’s spouse, or 8 ‘‘(II) is a qualifying relative of 9 the taxpayer, as defined in section 10 152(d), determined without regard to 11 paragraph (1)(B) thereof and by 12 treating an individual as a qualifying 13 child of the taxpayer for purposes of 14 paragraph (1)(D) thereof only if such 15 individual is a qualifying child of the 16 taxpayer as determined under clause 17 (i) of this subparagraph, or 18 ‘‘(iii) any qualifying relative of the 19 taxpayer (as defined in section 152(d), de- 20 termined without regard to paragraph 21 (1)(B) thereof) who has attained age 65 as 22 of the close of the calendar year in which 23 the taxable year of the taxpayer begins. 24 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 8 •HR 5271 IH For purposes of determining if any individual is 1 a qualifying relative of the taxpayer under 2 clause (ii)(II) or (iii), section 152(d)(1)(C) shall 3 be applied by not taking into account any bene- 4 fits received by such individual pursuant to any 5 Federal program (or any State or local program 6 financed in whole or in part with Federal 7 funds) related to health care, cash aid, child 8 care, food assistance, housing and development, 9 social services, employment and training, or en- 10 ergy assistance.’’. 11 (2) CONFORMING AMENDMENTS.— 12 (A) Section 32(c)(1)(A)(i) of such Code 13 are each amended by striking ‘‘qualifying child’’ 14 and inserting ‘‘qualifying dependent’’. 15 (B) Section 32(c)(1)(B) of such Code is 16 amended— 17 (i) by striking ‘‘qualifying child’’ and 18 inserting ‘‘qualifying dependent’’, and 19 (ii) by striking ‘‘CHILD’’ in the head- 20 ing and inserting ‘‘DEPENDENT’’. 21 (C) Section 32(c)(1)(F) of such Code is 22 amended— 23 (i) by striking ‘‘qualifying children’’ 24 and inserting ‘‘qualifying dependents’’, 25 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 9 •HR 5271 IH (ii) by striking ‘‘qualifying child’’ and 1 inserting ‘‘qualifying dependent’’, and 2 (iii) by striking ‘‘QUALIFYING CHILD’’ 3 in the heading and inserting ‘‘QUALIFYING 4 DEPENDENT’’. 5 (D) Section 32(c)(3)(D)(i) of such Code is 6 amended by striking ‘‘qualifying child’’ both 7 places it appears and inserting ‘‘qualifying de- 8 pendent’’. 9 (e) MODIFICATION OF PERCENTAGES AND 10 AMOUNTS.— 11 (1) 100 PERCENT CREDIT PERCENTAGE.— 12 Paragraph (1) and paragraph (2)(A) of section 13 32(a) of such Code are each amended by striking 14 ‘‘the credit percentage of’’. 15 (2) 20 PERCENT PHASEOUT PERCENTAGE.— 16 Section 32(a)(2)(B) of such Code is amended by 17 striking ‘‘the phaseout percentage’’ and inserting 18 ‘‘20 percent’’. 19 (3) MODIFICATION OF EARNED INCOME AND 20 PHASEOUT AMOUNTS.—Section 32(b) of such Code 21 is amended to read as follows: 22 ‘‘(b) EARNED INCOME AMOUNT; PHASEOUT 23 AMOUNT.—For purposes of this section— 24 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 10 •HR 5271 IH ‘‘(1) EARNED INCOME AMOUNT.—The term 1 ‘earned income amount’ means $4,000 (twice such 2 amount in the case of a joint return). 3 ‘‘(2) PHASEOUT AMOUNT.—The term ‘phaseout 4 amount’ means $30,000 ($50,000 in the case of a 5 joint return). 6 ‘‘(3) INFLATION ADJUSTMENT.—In the case of 7 any taxable year beginning after 2019, the $4,000 8 amount in paragraph (1) and each dollar amount in 9 paragraph (2) shall be increased by an amount equal 10 to— 11 ‘‘(A) such dollar amount, multiplied by 12 ‘‘(B) the cost-of-living adjustment deter- 13 mined under section 1(f)(3) for the calendar 14 year in which the taxable year begins, deter- 15 mined by substituting ‘2018’ for ‘2016’ in sub- 16 paragraph (A)(ii) thereof. 17 If any increase under the preceding sentence is not 18 a multiple of $50, such increase shall be rounded to 19 the next lowest multiple of $50.’’. 20 (4) CONFORMING AMENDMENTS.— 21 (A) Section 32(i) of such Code is amended 22 by adding at the end the following new para- 23 graph: 24 ‘‘(3) INFLATION ADJUSTMENT.— 25 VerDate Sep 11 2014 00:20 Dec 10, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 11 •HR 5271 IH ‘‘(A) IN GENERAL.—In the case of any 1 taxable year beginning after 2018, the $2,200 2 amount in subsection (i)(1) shall be increased 3 by an amount equal to— 4 ‘‘(i) such dollar amount, multiplied by 5 ‘‘(ii) the cost-of-living adjustment de- 6 termined under section 1(f)(3) for the cal- 7 endar year in which the taxable year be- 8 gins, determined by substituting ‘1995’ for 9 ‘2016’ in subparagraph (A)(ii) thereof. 10 ‘‘(B) ROUNDING.—If any increase under 11 subparagraph (A) is not a multiple of $50, such 12 increase shall be rounded to the next lowest 13 multiple of $50.’’. 14 (B) Section 32 of such Code is amended by 15 striking subsection (j). 16 (f) INCREASED CREDIT FOR CERTAIN UNMARRIED 17 INDIVIDUALS WITH 2 OR MORE QUALIFYING CHIL- 18 DREN.— 19 (1) IN GENERAL.—Section 32 of such Code is 20 amended by inserting after subsection (f) the fol- 21 lowing new subsection: 22 ‘‘(g) INCREASED CREDIT FOR CERTAIN UNMARRIED 23 INDIVIDUALS WITH 2 OR MORE QUALIFYING CHIL- 24 DREN.— 25 VerDate Sep 11 2014 03:36 Dec 06, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 12 •HR 5271 IH ‘‘(1) IN GENERAL.—In the case of a qualified 1 individual, the amount of the credit otherwise deter- 2 mined under subsection (a) shall be increased by the 3 amount of the credit determined under this section 4 as such section was in effect for taxable years begin- 5 ning in 2018 but with the modifications described in 6 paragraph (2). 7 ‘‘(2) MODIFICATIONS.—Solely for purposes of 8 determining the increase under paragraph (1)— 9 ‘‘(A) CREDIT PERCENTAGE.—The credit 10 percentage shall be equal to— 11 ‘‘(i) in the case of a qualified indi- 12 vidual with 2 qualifying children, 12.5 per- 13 cent, and 14 ‘‘(ii) in the case of a qualified indi- 15 vidual with 3 or more qualifying children, 16 18.75 percent. 17 ‘‘(B) PHASEOUT PERCENTAGE.—The 18 phaseout percentage shall be equal to 5 percent. 19 ‘‘(C) APPLICATION OF INFLATION ADJUST- 20 MENT.—Section 32(j) as in effect for taxable 21 years beginning in 2018 shall be applied by tak- 22 ing into account the taxable year for which the 23 increase under paragraph (1) is determined. 24 VerDate Sep 11 2014 00:20 Dec 10, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5271.IH H5271 kjohnson on DSK79L0C42 with BILLS 13 •HR 5271 IH ‘‘(3) QUALIFIED INDIVIDUAL.—For purposes of 1 this subsection, the term ‘qualified individual’ means 2 any individual who— 3 ‘‘(A) is not married (as determined under 4 section 7703), and 5 ‘‘(B) has 2 or more qualifying children. 6 ‘‘(4) QUALIFYING CHILD.—For purposes of this 7 subsection, the term ‘qualifying child’ means a child 8 described in subsection (c)(3)(A)(i) determined with- 9 out regard to subclause (I) thereof.’’. 10 (g) ADVANCE PAYMENT.— 11 (1) IN GENERAL.—Chapter 77 of such Code is 12 amended by adding at the end the following new sec- 13 tion: 14 ‘‘SEC. 7529. ADVANCE PAYMENT OF EARNED INCOME C [Text truncated for display. Full text available on Congress.gov.]