[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1468 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 1468
To amend the Internal Revenue Code of 1986 to expand and improve the
earned income tax credit.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 8, 2023
Ms. Moore of Wisconsin (for herself, Ms. Chu, Mr. Evans, Mr. Grijalva,
Mrs. Watson Coleman, Ms. Jayapal, Mr. Khanna, Mr. Torres of New York,
Ms. Omar, Ms. Garcia of Texas, Ms. Pressley, Ms. Norton, Mr. Pocan, Ms.
Tokuda, and Ms. Pingree) 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 expand and improve the
earned income tax credit.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Worker Relief and Credit Reform Act
of 2023'' or as the ``WRCR Act of 2023''.
SEC. 2. EXPANSION AND IMPROVEMENT OF EARNED INCOME TAX CREDIT.
(a) Application to Students.--
(1) In general.--Section 32(c)(1)(A)(i) of the Internal
Revenue Code of 1986 is amended by inserting ``who is a
qualifying student or'' after ``any individual''.
(2) Qualifying student.--Section 32(c) of such Code is
amended by redesignating paragraph (4) as paragraph (5) and
inserting after paragraph (3) the following new paragraph:
``(4) Qualifying student.--
``(A) In general.--The term `qualifying student'
means, with respect to any taxable year, any individual
who--
``(i) is an eligible student (as defined in
section 25A(b)(3)) with respect to at least one
academic period beginning during such taxable
year,
``(ii) either--
``(I) qualifies for a Federal Pell
Grant with respect to such academic
period, or
``(II) meets the requirements of
subparagraph (B) or (C) for the taxable
year, and
``(iii) is not a dependent for whom a
deduction is allowable under section 151 to
another taxpayer for any taxable year beginning
in the same calendar year as such taxable year.
``(B) Independent students.--In the case of any
independent student, the requirements of this
subparagraph are met for such taxable year if the
household income of the taxpayer is less than 300
percent of the poverty line for the size of the family
involved for the taxable year.
``(C) Other students.--
``(i) In general.--In the case of any
individual who is not an independent student,
the requirements of this subparagraph are met
for such taxable year if the aggregate
household incomes of all the individual's
specified supporters (and the taxpayer if not
otherwise taken into account) for the taxable
years of such supporters which end in or with
the calendar year in which such individual's
taxable year begins is less than 300 percent of
the poverty line for the size of the family
involved (determined on a single aggregate
basis) for the taxable year.
``(ii) Specified supporter.--The term
`specified supporter' means, with respect to
any individual described in clause (i), any
taxpayer with respect to whom such individual
was a dependent for any taxable year ending in
the 3-year period described in subparagraph
(D)(i).
``(D) Independent student defined.--
``(i) In general.--The term `independent
student' means any individual if such
individual was not a dependent of another
taxpayer for any taxable year ending in the 3-
year period which ends on the first day of the
first academic period with respect to which
such individual is an eligible student (as
defined in section 25A(b)(3)).
``(ii) Certain academic periods
disregarded.--An academic period shall be
disregarded under clause (i) if such academic
period ends more than 2 years before the
beginning of the next academic period with
respect to which the individual is an eligible
student (as defined in section 25A(b)(3)).
``(E) Other definitions.--
``(i) Household income.--The term
`household income' has the meaning given such
term in section 36B(d)(2).
``(ii) Poverty line.--The term `poverty
line' has the meaning given such term in
section 36B(d)(3)(A).
``(iii) Family size.--The family size
involved with respect to any taxpayer shall be
determined under rules similar to the rules of
section 36B(d)(1).''.
(3) Conforming amendment.--Section 32(c)(1)(A)(ii) of such
Code is amended by striking ``any other individual who does not
have a qualifying child'' and inserting ``any individual not
described in clause (i)''.
(b) Modification of Age Requirements.--Section 32(c)(1)(A)(ii)(II)
of such Code is amended by striking ``has attained age 25 but not
attained age 65'' and inserting ``has attained age 18''.
(c) Care-Giving and Learning Taken Into Account as Compensated
Work.--Section 32(a) of such Code is amended by adding at the end the
following new paragraph:
``(3) Special rule for qualifying students and certain
individuals with one or more qualifying dependents.--For
purposes of paragraph (1), any individual--
``(A) who is a qualifying student, or
``(B) who has a qualifying dependent,
shall be treated as having earned income for the taxable year
which is equal to the earned income amount with respect to such
individual for such taxable year.''.
(d) Treatment of Certain Qualifying Relatives.--
(1) In general.--Section 32(c)(3) of such Code is amended
by striking all that precedes subparagraph (B) and inserting
the following:
``(3) Qualifying dependent.--
``(A) In general.--The term `qualifying dependent'
means--
``(i) a qualifying child of the taxpayer,
as defined in section 152(c), determined--
``(I) by substituting `12' for `19'
in paragraph (3)(A)(i) thereof, and
``(II) without regard to paragraphs
(1)(D) and (3)(A)(ii) thereof and
section 152(e),
``(ii) any individual who is physically or
mentally incapable of caring for himself or
herself (within the meaning of section
21(b)(1)) and who--
``(I) is the taxpayer's spouse, or
``(II) is a qualifying relative of
the taxpayer, as defined in section
152(d), determined without regard to
paragraph (1)(B) thereof and by
treating an individual as a qualifying
child of the taxpayer for purposes of
paragraph (1)(D) thereof only if such
individual is a qualifying child of the
taxpayer as determined under clause (i)
of this subparagraph, or
``(iii) any qualifying relative of the
taxpayer (as defined in section 152(d),
determined without regard to paragraph (1)(B)
thereof) who has attained age 65 as of the
close of the calendar year in which the taxable
year of the taxpayer begins.
For purposes of determining if any individual is a
qualifying relative of the taxpayer under clause
(ii)(II) or (iii), section 152(d)(1)(C) shall be
applied by not taking into account any benefits
received by such individual pursuant to any Federal
program (or any State or local program financed in
whole or in part with Federal funds) related to
retirement (including social security benefits),
disability, health care, cash aid, child care, food
assistance, housing and development, social services,
employment and training, or energy assistance.''.
(2) Conforming amendments.--
(A) Section 32(c)(1)(A)(i) of such Code is amended
by striking ``qualifying child'' and inserting
``qualifying dependent''.
(B) Section 32(c)(1)(B) of such Code is amended--
(i) by striking ``qualifying child'' and
inserting ``qualifying dependent'', and
(ii) by striking ``child'' in the heading
and inserting ``dependent''.
(C) Section 32(c)(1)(F) of such Code is amended--
(i) by striking ``qualifying children'' and
inserting ``qualifying dependents'',
(ii) by striking ``qualifying child'' and
inserting ``qualifying dependent'', and
(iii) by striking ``qualifying child'' in
the heading and inserting ``qualifying
dependent''.
(D) Section 32(c)(3)(D)(i) of such Code is amended
by striking ``qualifying child'' both places it appears
and inserting ``qualifying dependent''.
(e) Modification of Percentages and Amounts.--
(1) 100 percent credit percentage.--Paragraph (1) and
paragraph (2)(A) of section 32(a) of such Code are each amended
by striking ``the credit percentage of''.
(2) 20 percent phaseout percentage.--Section 32(a)(2)(B) of
such Code is amended by striking ``the phaseout percentage''
and inserting ``20 percent''.
(3) Modification of earned income and phaseout amounts.--
Section 32(b) of such Code is amended to read as follows:
``(b) Earned Income Amount; Phaseout Amount.--For purposes of this
section--
``(1) Earned income amount.--The term `earned income
amount' means $4,000 (twice such amount in the case of a joint
return).
``(2) Phaseout amount.--The term `phaseout amount' means
$30,000 ($50,000 in the case of a joint return).
``(3) Inflation adjustment.--In the case of any taxable
year beginning after 2023, the $4,000 amount in paragraph (1)
and each dollar amount in paragraph (2) 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 the calendar year in which
the taxable year begins, determined by substituting
`2022' for `2016' in subparagraph (A)(ii) thereof.
If any increase under the preceding sentence is not a multiple
of $50, such increase shall be rounded to the next lowest
multiple of $50.''.
(4) Conforming amendments.--
(A) Section 32(i) of such Code is amended by adding
at the end the following new paragraph:
``(3) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning after 2021, the $10,000 amount in subsection
(i)(1) 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 `2020' for `2016' in
subparagraph (A)(ii) thereof.
``(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.''.
(B) Section 32 of such Code is amended by striking
subsection (j).
(f) Increased Credit for Certain Unmarried Individuals With 2 or
More Qualifying Children.--
(1) In general.--Section 32 of such Code is amended by
inserting after subsection (f) the following new subsection:
``(g) Increased Credit for Certain Unmarried Individuals With 2 or
More Qualifying Children.--
``(1) In general.--In the case of a qualified individual,
the amount of the credit otherwise determined under subsection
(a) shall be increased by the amount of the credit determined
under this section as such section was in effect for taxable
years beginning in 2018 but with the modifications described in
paragraph (2).
``(2) Modifications.--Solely for purposes of determining
the increase under paragraph (1)--
``(A) Credit percentage.--The credit percentage
shall be equal to--
``(i) in the case of a qualified individual
with 2 qualifying children, 12.5 percent, and
``(ii) in the case of a qualified
individual with 3 or more qualifying children,
18.75 percent.
``(B) Phaseout percentage.--The phaseout percentage
shall be equal to 5 percent.
``(C) Application of inflation adjustment.--Section
32(j) as in effect for taxable years beginning in 2018
shall be applied by taking into account the taxable
year for which the increase under paragraph (1) is
determined.
``(3) Qualified individual.--For purposes of this
subsection, the term `qualified individual' means any
individual who--
``(A) is not married (as determined under section
7703), and
``(B) has 2 or more qualifying children.
``(4) Qualifying child.--For purposes of this subsection,
the term `qualifying child' means a child described in
subsection (c)(3)(A)(i) determined without regard to subclause
(I) thereof.''.
(g) Advance Payment.--
(1) In general.--Chapter 77 of such Code is amended by
adding at the end the following new section:
``SEC. 7531. ADVANCE PAYMENT OF EARNED INCOME CREDIT; EARNED INCOME
SAVINGS ACCOUNTS.
``(a) In General.--Not later than the date that is 2 years after
the date of the enactment of this section, the Secretary shall
establish a program for making direct advance monthly payments of the
credit allowable under section 32 to taxpayers who elect to receive
such payments.
``(b) Limitation.--The aggregate monthly payments made under
subsection (a) with respect to any taxpayer for any taxable year shall
not exceed 75 percent of the estimated amount of the credit allowable
under section 32 to such taxpayer for such taxable year.
``(c) Election.--The election under subsection (a) may be made or
changed for subsequent periods at any time during the taxable year. In
the case of an election made after the beginning of a taxable year, the
monthly advance payments shall be made for months beginning after the
date that such election becomes effective and the total amount of
advance payments (subject to the limitation of subsection (b)) shall be
prorated among the remaining months.
``(d) Method of Payment.--The program established under subsection
(a) shall include an option for taxpayers to elect to receive payments
under such program by prepaid debit card.
``(e) Reports to Taxpayers.--
``(1) In general.--With respect to payments made under this
section for any calendar year, not later than January 31 of the
following calendar year, the Secretary shall issue a statement
to each individual with respect to whom payments were made
under this section setting forth--
``(A) the name, address, and TIN of such person,
``(B) the aggregate amount of payments made under
this section with respect to such person for such
calendar year,
``(C) a statement that such individual is required
to file a return of tax with respect to taxable years
which include any portion of such calendar year
regardless of whether such individual has income tax
liability with respect to such taxable years, and
``(D) such other information as the Secretary may
provide.
``(2) Election to receive statement through on-line
portal.--A taxpayer may elect to receive the statement
described in paragraph (1) through the on-line portal described
in subsection (f).
``(f) Recapture of Excess Payments.--If the aggregate payments made
to any taxpayer under subsection (a) with respect to any taxable year
exceed the credit allowable under section 32 (determined without regard
to subsection (h) thereof) with respect to such taxpayer for such
taxable year, the tax imposed by chapter 1 with respect to such
taxpayer for such taxable year shall be increased by such excess.
``(g) Restriction on Allowance of Advance Payment if Excess
Payments Not Repaid.--In the case of a taxpayer who fails to pay any
tax liability which includes an increase determined under subsection
(f) before the date on which payment of such tax is due, no payment
shall be made under subsection (a) to such taxpayer during the period
beginning on such date and ending with the end of the 2-year period
which begins on the date that such tax liability (and any interest or
penalties in connection with such liability) has been paid in full.''.
(2) Coordination with credit.--Section 32 of such Code, as
amended by subsection (f), is amended by inserting after
subsection (g) the following new subsection:
``(h) Coordination With Advance Payment of Credit.--With respect to
any taxable year, the amount which would (but for this subsection) be
allowed as a credit to the taxpayer under this section shall be reduced
(but not below zero) by the aggregate payments made under section 7531
to such taxpayer for such taxable year.''.
(3) One-on-one consultations.--The Secretary of the
Treasury (or the Secretary's delegate) shall ensure that in-
person, telephonic, and virtual one-on-one consultations
between taxpayers and the Internal Revenue Service are
available to assist taxpayers at all times during regular
business hours (and, in the case of in-person consultations, at
all taxpayer assistance centers of the Internal Revenue
Service) in determining--
(A) their eligibility for the advance payment
program established under section 7531,
(B) the amount of the monthly payment for which the
taxpayer is eligible under such program,
(C) the circumstances or changes in circumstances
which, based on the particular characteristics of such
taxpayer, are most likely to result in excess payments
to such taxpayer which would be subject to recapture
under section 7531(f), and
(D) such other matters as such Secretary or
delegate determines appropriate.
(4) On-line portal.--The Secretary of the Treasury (or the
Secretary's delegate) shall establish an on-line portal which
allows taxpayers to--
(A) elect to receive advance monthly payments under
section 7531, including determining the estimated
amount described in subsection (b) of such section and
determining the amount of such monthly payments,
(B) report changes in circumstances and modify the
amount of future advance monthly payments under such
section, and
(C) stop future advance monthly payments under such
section and pay back any advance monthly payments.
(5) Clerical amendment.--The table of sections for chapter
77 of such Code is amended by adding at the end the following
new item:
``Sec. 7531. Advance payment of earned income credit; earned income
savings accounts.''.
(h) Outreach Pilot Program.--
(1) In general.--Not later than 1 year after the date of
the enactment of this Act, the Secretary of the Treasury (or
the Secretary's designee) shall establish a program to educate
taxpayers regarding the availability of the earned income tax
credit and the advance monthly payments of such credit.
Pursuant to such program--
(A) EITC educational letters.--The Secretary (or
designee) shall provide a written notice describing the
earned income tax credit, the qualifications for
receiving such credit, and the program for the advance
payment of such credit to each taxpayer that the
Secretary (or designee) determines is likely to qualify
for such credit.
(B) District office workshops.--Each district
office of the Internal Revenue Service shall provide
workshops and seminars to assist and educate taxpayers
regarding the earned income tax credit and the program
to provide advance monthly payments of such credit.
(C) Quarterly reminders.--The Internal Revenue
Service shall provide written reminders each calendar
quarter to taxpayers participating in the program to
provide advance monthly payments of the earned income
tax credit that the amount of such payments are
determined on the basis of estimates based on
information previously provided by the taxpayer, that
the taxpayer is responsible for repaying any amounts
received that are in excess of the actual amount of the
earned income tax credit, and that the taxpayer should
review all the facts and circumstances that may affect
the amount of the earned income tax credit of the
taxpayer which the taxpayer is receiving in advance.
(2) Termination.--The program established under paragraph
(1) shall terminate at the close of the 10-year period
beginning on the date that such program is established by the
Secretary (or designee).
(3) Report on effectiveness of program.--On the date which
is 5 years after the establishment of the program under
paragraph (1), the Secretary shall submit to Congress a report
evaluating the effectiveness of the program, including a
detailed examination of the effectiveness of each of the
initiatives described in subparagraphs (A), (B), and (C) of
paragraph (1).
(i) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2022.
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