Economic Mobility Act of 2019
This bill modifies provisions relating to the earned income tax credit, the child tax credit, and the child and dependent care tax credit. Among other things, it increases the earned income tax credit in 2019 and 2020 for individuals with no qualifying children, makes the child and dependent care tax credits fully refundable during the same period, increases the child tax credit for children under the age of 4, increases the exclusion from employee gross income for employer-provided dependent care assistance, and provides for payments to U.S. possessions related to such credits.
The bill also eliminates the increase in unrelated business taxable income by expenses for certain fringe benefits for which a tax deduction is not allowed, including transportation and parking benefits or an on-premises athletic facility.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3300 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 3300
To amend the Internal Revenue Code of 1986 to provide tax relief for
workers and families, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 18, 2019
Mr. Neal 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 provide tax relief for
workers and families, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Economic Mobility
Act of 2019''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--EARNED INCOME TAX CREDIT
Sec. 101. Strengthening the earned income tax credit for individuals
with no qualifying children.
Sec. 102. Taxpayer eligible for childless earned income credit in case
of qualifying children who fail to meet
certain identification requirements.
Sec. 103. Credit allowed in case of certain separated spouses.
Sec. 104. Elimination of disqualified investment income test.
Sec. 105. Application of earned income tax credit in possessions of the
United States.
TITLE II--CHILD TAX CREDIT
Sec. 201. Child tax credit fully refundable for 2019 and 2020.
Sec. 202. Payments to possessions.
TITLE III--DEPENDENT CARE ASSISTANCE
Sec. 301. Refundability and enhancement of child and dependent care tax
credit.
Sec. 302. Increase in exclusion for employer-provided dependent care
assistance.
TITLE IV--CERTAIN FRINGE BENEFIT EXPENSES
Sec. 401. Repeal of inclusion of certain fringe benefit expenses in
unrelated business taxable income.
(c) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
TITLE I--EARNED INCOME TAX CREDIT
SEC. 101. STRENGTHENING THE EARNED INCOME TAX CREDIT FOR INDIVIDUALS
WITH NO QUALIFYING CHILDREN.
(a) Special Rules for 2019 and 2020.--Section 32 is amended by
adding at the end the following new subsection:
``(n) Special Rules for Individuals Without Qualifying Children.--
In the case of any taxable year beginning in 2019 or 2020--
``(1) Credit allowed for certain individuals over age 18.--
``(A) In general.--Except in the case of a full-
time student (or, in the case of a married individual,
except if both the individual and the individual's
spouse are full-time students), subsection
(c)(1)(A)(ii)(II) shall be applied by substituting `age
19' for `age 25'.
``(B) Full-time student.--For purposes of this
paragraph, the term `full-time student' means, with
respect to a taxable year, an individual who is an
eligible student (as defined in section 25A(b)(3))
during at least 5 calendar months during the taxable
year.
``(2) Increase in maximum age for credit.--Subsection
(c)(1)(A)(ii)(II) shall be applied by substituting `age 66' for
`age 65'.
``(3) Increase in credit and phaseout percentages.--The
table contained in subsection (b)(1) shall be applied by
substituting `15.3' for `7.65' each place it appears therein.
``(4) Increase in earned income and phaseout amounts.--
``(A) In general.--The table contained in
subsection (b)(2)(A) shall be applied--
``(i) by substituting `$9,570' for
`$4,220', and
``(ii) by substituting `$11,310' for
`$5,280'.
``(B) Coordination with inflation adjustment.--
``(i) In general.--In the case of any
taxable year beginning after 2019, the $9,570
and $11,310 amounts in subparagraph (A) shall
each be increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `2018' for `2016' in
subparagraph (A)(ii) thereof.
``(ii) Rounding.--If any increase under
clause (i) is not a multiple of $10, such
increase shall be rounded to the nearest
multiple of $10.
``(iii) Coordination with other inflation
adjustment.--Subsection (j) shall not apply to
any dollar amount specified in this
paragraph.''.
(b) Information Return Matching.--As soon as practicable, the
Secretary of the Treasury (or the Secretary's delegate) shall develop
and implement procedures for checking an individual's claim for a
credit under section 32 of the Internal Revenue Code of 1986, by reason
of subsection (n)(1) thereof, against any information return made with
respect to such individual under section 6050S (relating to returns
relating to higher education tuition and related expenses).
(c) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2018.
SEC. 102. TAXPAYER ELIGIBLE FOR CHILDLESS EARNED INCOME CREDIT IN CASE
OF QUALIFYING CHILDREN WHO FAIL TO MEET CERTAIN
IDENTIFICATION REQUIREMENTS.
(a) In General.--Section 32(c)(1) is amended by striking
subparagraph (F).
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 103. CREDIT ALLOWED IN CASE OF CERTAIN SEPARATED SPOUSES.
(a) In General.--Section 32(d) is amended--
(1) by striking ``Married Individuals.--In the case of''
and inserting the following: ``Married Individuals.--
``(1) In general.--In the case of''; and
(2) by adding at the end the following new paragraph:
``(2) Determination of marital status.--For purposes of
this section--
``(A) In general.--Except as provided in
subparagraph (B), marital status shall be determined
under section 7703(a).
``(B) Special rule for separated spouse.--An
individual shall not be treated as married if such
individual--
``(i) is married (as determined under
section 7703(a)) and does not file a joint
return for the taxable year,
``(ii) lives with a qualifying child of the
individual for more than one-half of such
taxable year, and
``(iii)(I) during the last 6 months of such
taxable year, does not have the same principal
place of abode as the individual's spouse, or
``(II) has a decree, instrument, or
agreement (other than a decree of divorce)
described in section 121(d)(3)(C) with respect
to the individual's spouse and is not a member
of the same household with the individual's
spouse by the end of the taxable year.''.
(b) Conforming Amendments.--
(1) Section 32(c)(1)(A) of such Code is amended by striking
the last sentence.
(2) Section 32(c)(1)(E)(ii) of such Code is amended by
striking ``(within the meaning of section 7703)''.
(3) Section 32(d)(1) of such Code, as amended by subsection
(a), is amended by striking ``(within the meaning of section
7703)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 104. ELIMINATION OF DISQUALIFIED INVESTMENT INCOME TEST.
(a) In General.--Section 32 of the Internal Revenue Code of 1986 is
amended by striking subsection (i).
(b) Conforming Amendments.--
(1) Section 32(j)(1) of such Code is amended by striking
``subsection (b)(2) and (i)(1)'' and inserting ``subsection
(b)(2)''.
(2) Section 32(j)(1)(B)(i) of such Code is amended by
striking ``subsections (b)(2)(A) and (i)(1)'' and inserting
``subsection (b)(2)(A)''.
(3) Section 32(j)(2) of such Code is amended--
(A) by striking subparagraph (B); and
(B) by striking ``Rounding.--'' and all that
follows through ``If any dollar amount'' and inserting
the following: ``Rounding.--If any dollar amount''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 105. APPLICATION OF EARNED INCOME TAX CREDIT IN POSSESSIONS OF THE
UNITED STATES.
(a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new section:
``SEC. 7529. APPLICATION OF EARNED INCOME TAX CREDIT TO POSSESSIONS OF
THE UNITED STATES.
``(a) Puerto Rico.--
``(1) In general.--With respect to calendar year 2020 and
each calendar year thereafter, the Secretary shall, except as
otherwise provided in this subsection, make payments to Puerto
Rico equal to--
``(A) the specified matching amount for such
calendar year, plus
``(B) in the case of calendar years 2020 through
2024, the lesser of--
``(i) the expenditures made by Puerto Rico
during such calendar year for education efforts
with respect to individual taxpayers and tax
return preparers relating to the earned income
tax credit, or
``(ii) $1,000,000.
``(2) Requirement to reform earned income tax credit.--The
Secretary shall not make any payments under paragraph (1) with
respect to any calendar year unless Puerto Rico has in effect
an earned income tax credit for taxable years beginning in or
with such calendar year which (relative to the earned income
tax credit which was in effect for taxable years beginning in
or with calendar year 2019) increases the percentage of earned
income which is allowed as a credit for each group of
individuals with respect to which such percentage is separately
stated or determined in a manner designed to substantially
increase workforce participation.
``(3) Specified matching amount.--For purposes of this
subsection--
``(A) In general.--The term `specified matching
amount' means, with respect to any calendar year, the
lesser of--
``(i) the excess (if any) of--
``(I) the cost to Puerto Rico of
the earned income tax credit for
taxable years beginning in or with such
calendar year, over
``(II) the base amount for such
calendar year, or
``(ii) the product of 3, multiplied by the
base amount for such calendar year.
``(B) Base amount.--
``(i) Base amount for 2020.--In the case of
calendar year 2020, the term `base amount'
means the greater of--
``(I) the cost to Puerto Rico of
the earned income tax credit for
taxable years beginning in or with
calendar year 2019 (rounded to the
nearest multiple of $1,000,000), or
``(II) $200,000,000.
``(ii) Inflation adjustment.--In the case
of any calendar year after 2020, the term `base
amount' means the dollar amount determined
under clause (i) increased by an amount equal
to--
``(I) such dollar amount,
multiplied by--
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for such calendar year,
determined by substituting `calendar
year 2019' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any amount determined under this clause shall
be rounded to the nearest multiple of
$1,000,000.
``(4) Rules related to payments and reports.--
``(A) Timing of payments.--The Secretary shall make
payments under paragraph (1) for any calendar year--
``(i) after receipt of the report described
in subparagraph (B) for such calendar year, and
``(ii) except as provided in clause (i),
within a reasonable period of time before the
due date for individual income tax returns (as
determined under the laws of Puerto Rico) for
taxable years which began on the first day of
such calendar year.
``(B) Annual reports.--With respect to calendar
year 2020 and each calendar year thereafter, Puerto
Rico shall provide to the Secretary a report which
shall include--
``(i) an estimate of the costs described in
paragraphs (1)(B)(i) and (3)(A)(i)(I) with
respect to such calendar year, and
``(ii) a statement of such costs with
respect to the preceding calendar year.
``(C) Adjustments.--
``(i) In general.--In the event that any
estimate of an amount is more or less than the
actual amount as later determined and any
payment under paragraph (1) was determined on
the basis of such estimate, proper payment
shall be made by, or to, the Secretary (as the
case may be) as soon as practicable after the
determination that such estimate was
inaccurate. Proper adjustment shall be made in
the amount of any subsequent payments made
under paragraph (1) to the extent that proper
payment is not made under the preceding
sentence before such subsequent payments.
``(ii) Additional reports.--The Secretary
may require such additional periodic reports of
the information described in subparagraph (B)
as the Secretary determines appropriate to
facilitate timely adjustments under clause (i).
``(D) Determination of cost of earned income tax
credit.--For purposes of this subsection, the cost to
Puerto Rico of the earned income tax credit shall be
determined by the Secretary on the basis of the laws of
Puerto Rico and shall include reductions in revenues
received by Puerto Rico by reason of such credit and
refunds attributable to such credit, but shall not
include any administrative costs with respect to such
credit.
``(E) Prevention of manipulation of base amount.--
No payments shall be made under paragraph (1) if the
earned income tax credit as in effect in Puerto Rico
for taxable years beginning in or with calendar year
2019 is modified after the date of the enactment of
this subsection.
``(b) Possessions With Mirror Code Tax Systems.--
``(1) In general.--With respect to calendar year 2020 and
each calendar year thereafter, the Secretary shall, except as
otherwise provided in this subsection, make payments to the
Virgin Islands, Guam, and the Commonwealth of the Northern
Mariana Islands equal to--
``(A) 75 percent of the cost to such possession of
the earned income tax credit for taxable years
beginning in or with such calendar year, plus
``(B) in the case of calendar years 2020 through
2024, the lesser of--
``(i) the expenditures made by such
possession during such calendar year for
education efforts with respect to individual
taxpayers and tax return preparers relating to
such earned income tax credit, or
``(ii) $50,000.
``(2) Application of certain rules.--Rules similar to the
rules of subparagraphs (A), (B), (C), and (D) of subsection
(a)(4) shall apply for purposes of this subsection.
``(c) American Samoa.--
``(1) In general.--With respect to calendar year 2020 and
each calendar year thereafter, the Secretary shall, except as
otherwise provided in this subsection, make payments to
American Samoa equal to--
``(A) the lesser of--
``(i) 75 percent of the cost to American
Samoa of the earned income tax credit for
taxable years beginning in or with such
calendar year, or
``(ii) $12,000,000, plus
``(B) in the case of calendar years 2020 through
2024, the lesser of--
``(i) the expenditures made by American
Samoa during such calendar year for education
efforts with respect to individual taxpayers
and tax return preparers relating to such
earned income tax credit, or
``(ii) $50,000.
``(2) Requirement to enact and maintain an earned income
tax credit.--The Secretary shall not make any payments under
paragraph (1) with respect to any calendar year unless American
Samoa has in effect an earned income tax credit for taxable
years beginning in or with such calendar year which allows a
refundable tax credit to individuals on the basis of the
taxpayer's earned income which is designed to substantially
increase workforce participation.
``(3) Inflation adjustment.--In the case of any calendar
year after 2020, the $12,000,000 amount in paragraph (1)(A)(ii)
shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by--
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for such calendar year,
determined by substituting `calendar year 2019' for
`calendar year 2016' in subparagraph (A)(ii) thereof.
Any increase determined under this clause shall be rounded to
the nearest multiple of $100,000.
``(4) Application of certain rules.--Rules similar to the
rules of subparagraphs (A), (B), (C), and (D) of subsection
(a)(4) shall apply for purposes of this subsection.
``(d) Treatment of Payments.--For purposes of section 1324 of title
31, United States Code, the payments under this section shall be
treated in the same manner as a refund due from a credit provision
referred to in subsection (b)(2) of such section.''.
(b) Clerical Amendment.--The table of sections for chapter 77 of
such Code is amended by adding at the end the following new item:
``Sec. 7529. Application of earned income tax credit to possessions of
the United States.''.
TITLE II--CHILD TAX CREDIT
SEC. 201. CHILD TAX CREDIT FULLY REFUNDABLE FOR 2019 AND 2020.
(a) In General.--Section 24(h) is amended by adding at the end the
following new paragraph:
``(8) Credit fully refundable for 2019 and 2020.--In the
case of an individual other than a nonresident alien, for any
taxable year beginning in 2019 or 2020--
``(A) paragraph (5) of this subsection shall not
apply, and
``(B) the increase determined under the first
sentence of subsection (d)(1) shall be the amount
determined under subparagraph (A) of such subsection
(determined without regard to paragraph (4) of this
subsection).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2018.
SEC. 202. PAYMENTS TO POSSESSIONS.
(a) Mirror Code Possession.--The Secretary of the Treasury shall
pay to each possession of the United States with a mirror code tax
system amounts equal to the loss to that possession by reason of the
application of section 24 of the Internal Revenue Code of 1986 with
respect to taxable years beginning after 2018. Such amounts shall be
determined by the Secretary of the Treasury based on information
provided by the government of the respective possession.
(b) Other Possessions.--The Secretary of the Treasury shall pay to
each possession of the United States which does not have a mirror code
tax system amounts estimated by the Secretary of the Treasury as being
equal to the aggregate benefits that would have been provided to
residents of such possession by reason of the application of section 24
of such Code for taxable years beginning after 2018 if the provisions
of such section had been in effect in such possession. The preceding
sentence shall not apply with respect to any possession of the United
States unless such possession has a plan, which has been approved by
the Secretary of the Treasury, under which such possession will
promptly distribute such payments to the residents of such possession
in a manner which replicates to the greatest degree practicable the
benefits that would have been so provided to each such resident.
(c) Coordination With Credit Allowed Against United States Income
Taxes.--
(1) In general.--No credit shall be allowed against United
States income taxes for any taxable year under section 24 of
the Internal Revenue Code of 1986 to any person--
(A) to whom a credit is allowed against taxes
imposed by a possession with a mirror code tax system
by reason of the application of section 24 of such Code
in such possession for such taxable year; or
(B) who is eligible for a payment under a plan
described in subsection (b) with respect to such
taxable year.
(2) Restriction on refundable credit.--In the case of any
person to whom a credit would be allowed against taxes imposed
by a possession which does not have a mirror code tax system if
the provisions of such section 24 had been in effect in such
possession for the taxable year (and who is not described in
paragraph (1)(B)), section 24(h)(8) of such Code (as added by
this Act) shall not apply to such person for such taxable year.
(d) Definitions and Special Rules.--
(1) Possession of the united states.--For purposes of this
section, the term ``possession of the United States'' includes
the Commonwealth of Puerto Rico and the Commonwealth of the
Northern Mariana Islands.
(2) Mirror code tax system.--For purposes of this section,
the term ``mirror code tax system'' means, with respect to any
possession of the United States, the income tax system of such
possession if the income tax liability of the residents of such
possession under such system is determined by reference to the
income tax laws of the United States as if such possession were
the United States.
(3) Treatment of payments.--For purposes of section
1324(b)(2) of title 31, United States Code, the payments under
this section shall be treated in the same manner as a refund
due from the credit allowed under section 24 of the Internal
Revenue Code of 1986.
TITLE III--DEPENDENT CARE ASSISTANCE
SEC. 301. REFUNDABILITY AND ENHANCEMENT OF CHILD AND DEPENDENT CARE TAX
CREDIT.
(a) In General.--Section 21 is amended by adding at the end the
following new subsection:
``(g) Special Rules for 2019 and 2020.--In the case of any taxable
year beginning in 2019 or 2020--
``(1) Credit made refundable.--In the case of an individual
other than a nonresident alien, the credit allowed under
subsection (a) shall be treated as a credit allowed under
subpart C (and not allowed under this subpart).
``(2) Increase in applicable percentage.--Subsection (a)(2)
shall be applied--
``(A) by substituting `50 percent' for `35
percent', and
``(B) by substituting `$120,000' for `$15,000'.
``(3) Increase in dollar limit on amount creditable.--
Subsection (c) shall be applied--
``(A) by substituting `$6,000' for `$3,000' in
paragraph (1) thereof, and
``(B) by substituting `twice the amount in effect
under paragraph (1)' for `$6,000' in paragraph (2)
thereof.
``(4) Inflation adjustment of dollar amounts.--In the case
of any taxable year beginning after 2019, the $120,000 amount
in paragraph (2)(B) and the $6,000 amount in paragraph (3)(A)
shall each be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`2018' for `2016' in subparagraph (A)(ii) thereof.
If any increase determined under this paragraph is not a
multiple of $100, such increase shall be rounded to the next
lowest multiple of $100.''.
(b) Conforming Amendment.--Section 1324(b)(2) of title 31, United
States Code, is amended by inserting ``21 (by reason of subsection (g)
thereof),'' before ``25A''.
(c) Coordination With Possession Tax Systems.--Section 21(g)(1) of
the Internal Revenue Code of 1986 (as added by this section) shall not
apply to any person--
(1) to whom a credit is allowed against taxes imposed by a
possession with a mirror code tax system by reason of the
application of section 21 of such Code in such possession for
such taxable year; or
(2) to whom a credit would be allowed against taxes imposed
by a possession which does not have a mirror code tax system if
the provisions of section 21 of such Code had been in effect in
such possession for such taxable year.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2018.
SEC. 302. INCREASE IN EXCLUSION FOR EMPLOYER-PROVIDED DEPENDENT CARE
ASSISTANCE.
(a) In General.--Section 129(a)(2) is amended by adding at the end
the following new subparagraph:
``(D) Special rule for 2020 and 2021.--In the case
of any taxable year beginning in 2020 or 2021--
``(i) In general.--Subparagraph (A) shall
be applied be substituting `$10,500 (half such
dollar amount' for `$5,000 ($2,500'.
``(ii) Inflation adjustment.--In the case
of any taxable year beginning after 2020, the
$10,500 amount in clause (i) shall be increased
by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `2019' for `2016' in
subparagraph (A)(ii) thereof.
Any increase determined under the preceding
sentence which is not a multiple of $50, shall
be rounded to the nearest multiple of $50.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2019.
TITLE IV--CERTAIN FRINGE BENEFIT EXPENSES
SEC. 401. REPEAL OF INCLUSION OF CERTAIN FRINGE BENEFIT EXPENSES IN
UNRELATED BUSINESS TAXABLE INCOME.
(a) In General.--Section 512(a) is amended by striking paragraph
(7).
(b) Effective Date.--The amendment made by this subsection shall
take effect as if included in the amendments made by section 13703 of
Public Law 115-97.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by the Yeas and Nays: 22 - 19.
Reported (Amended) by the Committee on Ways and Means. H. Rept. 116-384.
Reported (Amended) by the Committee on Ways and Means. H. Rept. 116-384.
Placed on the Union Calendar, Calendar No. 307.
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