II
112th CONGRESS
1st Session
S. 467
IN THE SENATE OF THE UNITED STATES
March 3, 2011
Mr. Kerry (for himself and Mr. Rockefeller) 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 strengthen the earned income tax credit.
Short title
This Act may be cited as
the Strengthen the Earned Income Tax
Credit Act of 2011
.
Strengthen the earned income tax credit
Permanent extension of marriage penalty relief and increase in credit for certain families
Reduction in marriage penalty
In general
Subparagraph (B) of section 32(b)(2) of the Internal
Revenue Code of 1986 is amended by striking increased by
and all
that follows and inserting increased by $5,000.
.
Inflation adjustment
Clause (ii) of section 32(j)(1)(B) of such Code is amended—
by
striking $3,000 amount in subsection (b)(2)(B)(iii)
and
inserting $5,000 amount in subsection (b)(2)(B)
, and
by
striking calendar year 2007
and inserting calendar year
2008
.
Increase in credit percentage for families with 3 or more children
The table contained in section 32(b)(1)(A) of the Internal Revenue Code of 1986 (relating to percentages) is amended—
by striking
2 or more qualifying children
in the second row and inserting
2 qualifying children
, and
by inserting after the second row the following new item:
| 3 or more qualifying children | 45 | 21.06 |
.
Conforming amendment
Section 32(b) of such Code is amended by striking paragraph (3).
Increased credit for individuals with no qualifying children
In general
The table in subparagraph (A) of section 32(b)(2) of the
Internal Revenue Code of 1986 is amended by striking $5,280
in
the last column and inserting $12,690
.
Inflation adjustments
Subparagraph (B) of section 32(j)(1) of the Internal Revenue Code of 1986, as amended by subsection (a), is amended—
in clause (i)—
by
inserting (except as provided in clause (iii))
after
(b)(2)(A)
, and
by
striking and
at the end, and
by adding at the end the following new clause:
in the case of
the $12,690 amount in the table in subsection (b)(2)(A), by substituting
calendar year 2010
for calendar year 1992
in
subparagraph (B) of such section
1.
.
Credit increase and reduction in phaseout for individuals with no children
The table contained in section 32(b)(1)(A) of the Internal Revenue Code of 1986 is amended—
by striking
7.65
in the second column of the third row and inserting
15.3
, and
by striking
7.65
in the third column of the third row and inserting
15.3
.
Credit allowed for certain childless individuals over age 21
Subclause (II) of
section 32(c)(1)(A)(ii) of the Internal Revenue Code of 1986 (relating to
eligible individual) is amended by striking age 25
and inserting
age 21
.
Modification of abandoned spouse rule
In general
Section 32(c)(1) of the Internal Revenue Code of 1986 (relating to eligible individual) is amended by adding at the end the following new paragraph:
Certain married individuals living apart
For purposes of this section, an individual who—
is married (within the meaning of section 7703(a)) and files a separate return for the taxable year,
lives with a qualifying child of the individual for more than one-half of such taxable year, and
during the last 6 months of such taxable year, does not have the same principal place of abode as the individual's spouse, shall not be considered as married.
.
Conforming amendments
The last sentence
of section 32(c)(1)(A) of the Internal Revenue Code of 1986 is amended by
striking section 7703
and inserting section
7703(a)
.
Section 32(d) of
such Code is amended by striking In the case of an individual who is
married (within the meaning of section 7703)
and inserting In
the case of an individual who is married (within the meaning of section
7703(a)) and is not described in subsection (c)(1)(G)
.
Elimination of disqualified investment income test
In general
Section 32 of the Internal Revenue Code of 1986 is amended by striking subsection (i).
Conforming amendments
Section 32(j)(1)(B)(i) of such Code, as amended by this Act, is amended—
by
striking subsections
and inserting subsection
,
and
by
striking and (i)(1)
.
Section 32(j)(2) of such Code is amended to read as follows:
Rounding
If any dollar amount in subsection (b)(2)(A) (after being increased under subparagraph (B) thereof), after being increased under paragraph (1), is not a multiple of $10, such amount shall be rounded to the next nearest multiple of $10.
.
Simplification of rules regarding presence of qualifying child
Taxpayer eligible for credit for worker without qualifying child if qualifying child claimed by another member of family
Section 32(c)(1) of the Internal Revenue Code of 1986 (relating to eligible individual), as amended by this Act, is amended by adding at the end the following new paragraph:
Taxpayer eligible for credit for worker without qualifying child if qualifying child claimed by another member of family
General rule
Except as provided in clause (ii), in the case of 2 or more eligible individuals who may claim for such taxable year the same individual as a qualifying child, if such individual is claimed as a qualifying child by such an eligible individual, then any other such eligible individual who does not make such a claim of such child or of any other qualifying child may be considered an eligible individual without a qualifying child for purposes of the credit allowed under this section for such taxable year.
Exception if qualifying child claimed by parent
If an individual is claimed as a qualifying child for any taxable year by an eligible individual who is a parent of such child, then no other parent of such child who does not make such a claim of such child or of any other qualifying child may be considered an eligible individual without a qualifying child for purposes of the credit allowed under this section for such taxable year.
.
Taxpayer eligible for credit for worker without qualifying child if qualifying children do not have valid social security number
Subparagraph (F) of section 32(c)(1) of the Internal Revenue Code of 1986 is amended to read as follows:
Individuals who do not include tin, etc., of any qualifying child
In the case of any eligible individual who has one or more qualifying children, if no qualifying child of such individual is taken into account under subsection (b) by reason of paragraph (3)(D), for purposes of the credit allowed under this section, such individual may be considered an eligible individual without a qualifying child.
.
Increased penalty for failure To be diligent in determining eligibility for earned income credit
Section 6695(g) of the Internal Revenue Code of 1986 is
amended by striking $100
and inserting
$500
.
Effective dates
In general
Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2010.
Increased penalty
The amendment made by subsection (h) shall apply to returns required to be filed after December 31, 2011.
Repeal of EGTRRA sunset
Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 (relating to sunset provisions of such Act) shall not apply to section 303 of such Act.