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H.R. 22: To amend the Internal Revenue Code of 1986 to make permanent the increase in the standard deduction, the increase in and modifications of the child tax credit, and the repeal of the deduction for personal exemptions contained in Public Law 115-97.

The text of the bill below is as of Jan 3, 2019 (Introduced).


I

116th CONGRESS

1st Session

H. R. 22

IN THE HOUSE OF REPRESENTATIVES

January 3, 2019

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 make permanent the increase in the standard deduction, the increase in and modifications of the child tax credit, and the repeal of the deduction for personal exemptions contained in Public Law 115–97.

1.

Increase in standard deduction

(a)

In general

Section 63(c)(2) of the Internal Revenue Code of 1986 is amended—

(1)

by striking $4,400 in subparagraph (B) and inserting $18,000; and

(2)

by striking $3,000 in subparagraph (C) and inserting $12,000.

(b)

Inflation adjustment

Section 63(c)(4) of such Code is amended to read as follows:

(4)

Adjustments for inflation

(A)

In general

In the case of a taxable year beginning after 2018, each dollar amount in paragraph (2)(B), (2)(C), or (5) or subsection (f) 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 for 2016 in subparagraph (A)(ii) thereof—

(I)

in the case of the dollar amounts contained in paragraph (2)(B) or (2)(C), 2017,

(II)

in the case of the dollar amounts contained in paragraph (5)(A) or subsection (f), 1987, and

(III)

in the case of the dollar amount contained in paragraph (5)(B), 1997.

(B)

Rounding

If any increase under subparagraph (A) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.

.

(c)

Conforming amendments

(1)

Section 1(f)(7)(A) of such Code is amended by striking section 63(c)(4),.

(2)

Section 1(f)(7)(B) of such Code is amended by striking sections 63(c)(4) and and inserting section.

(3)

Section 63(c) of such Code is amended by striking paragraph (7).

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2017.

2.

Increase in and modification of child tax credit

(a)

In general

Section 24 of the Internal Revenue Code of 1986 is amended by striking subsections (a), (b), and (c) and inserting the following new subsections:

(a)

Allowance of credit

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of—

(1)

$2,000 for each qualifying child of the taxpayer, and

(2)

$500 for each qualifying dependent (other than a qualifying child) of the taxpayer.

(b)

Limitation based on adjusted gross income

The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds $400,000 in the case of a joint return ($200,000 in any other case). For purposes of the preceding sentence, the term modified adjusted gross income means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.

(c)

Qualifying child; qualifying dependent

For purposes of this section—

(1)

Qualifying child

The term qualifying child means any qualifying dependent of the taxpayer—

(A)

who is a qualifying child (as defined in section 7706(c)) of the taxpayer,

(B)

who has not attained age 17 at the close of the calendar year in which the taxable year of the taxpayer begins, and

(C)

whose name and social security number are included on the taxpayer’s return of tax for the taxable year.

(2)

Qualifying dependent

The term qualifying dependent means any dependent of the taxpayer (as defined in section 7706 without regard to all that follows resident of the United States in section 7706(b)(3)(A)) whose name and TIN are included on the taxpayer’s return of tax for the taxable year.

(3)

Social security number defined

For purposes of this subsection, the term social security number means, with respect to a return of tax, a social security number issued to an individual by the Social Security Administration, but only if the social security number is issued—

(A)

to a citizen of the United States or pursuant to subclause (I) (or that portion of subclause (III) that relates to subclause (I)) of section 205(c)(2)(B)(i) of the Social Security Act, and

(B)

on or before the due date of filing such return.

.

(b)

Portion of credit refundable

(1)

In general

Section 24(d)(1)(A) of the Internal Revenue Code of 1986 is amended to read as follows:

(A)

the credit which would be allowed under this section determined—

(i)

by substituting $1,400 for $2,000 in subsection (a)(1),

(ii)

without regard to subsection (a)(2), and

(iii)

without regard to this subsection and the limitation under section 26(a), or

.

(2)

Modification of limitation based on earned income

Section 24(d)(1)(B)(i) of such Code is amended by striking $3,000 and inserting $2,500.

(3)

Inflation adjustment

Section 24(d) of such Code is amended by inserting after paragraph (3) the following new paragraph:

(4)

Adjustment for inflation

(A)

In general

In the case of a taxable year beginning after 2018, the $1,400 amount in paragraph (1)(A)(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 2017 for 2016 in subparagraph (A)(ii) thereof.

(B)

Rounding

If any increase under subparagraph (A) is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100.

(C)

Limitation

The amount of any increase under subparagraph (A) (after the application of subparagraph (B)) shall not exceed $600.

.

(4)

Conforming amendments

(A)

Section 24(e) of such Code is amended to read as follows:

(e)

Taxpayer identification requirement

No credit shall be allowed under this section if the identifying number of the taxpayer was issued after the due date for filing the return of tax for the taxable year.

.

(B)

Section 24 of such Code is amended by striking subsection (h).

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2017.

3.

Elimination of deduction for personal exemptions

(a)

In general

Section 151(d)(5) of the Internal Revenue Code of 1986 is amended by striking , and before January 1, 2026.

(b)

Conforming amendments

(1)

Section 152(d)(1)(B) is amended by inserting after section 151(d)) the following: or, in the case of a taxable year for which the exemption amount is zero, the dollar amount in effect for the taxable year under section 6334(d)(4)(B).

(2)

The heading of section 151(d)(5) of such Code is amended by striking 2018 through 2025 and inserting after 2017.

(3)

The second sentence of section 6334(d)(4)(C) is amended by striking $100 each place it appears and inserting $50.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2017.