[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3574 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 3574

 To amend the Internal Revenue Code of 1986 to change the calculation 
    and simplify the administration of the earned income tax credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 20, 2001

  Mr. Coyne 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 change the calculation 
    and simplify the administration of 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. CHANGES IN CALCULATION OF EARNED INCOME TAX CREDIT.

    (a) Percentages.--Paragraph (1) of section 32 of the Internal 
Revenue Code of 1986 (relating to percentages) is amended--
            (1) by redesignating subparagraphs (A), (B), and (C) as 
        subparagraphs (B), (C), and (D),
            (2) by striking ``In general.--'' in subparagraph (B) (as 
        so redesignated) and inserting ``Percentages after 1995.--'', 
        and
            (3) by inserting before subparagraph (B) (as so 
        redesignated) the following:
                    ``(A) In general.--In the case of taxable years 
                beginning after 2001:


 
``In the case of an eligible       The credit           The phaseout
      individual with:           percentage is:        percentage is:
 
1 qualifying child..........          34.00                 23.22
2 qualifying children.......          40.00                 21.79
3 or more qualifying                  45.00                 24.52
 children...................
No qualifying children......          15.3                 15.3''.
 

      
    (b) Amounts.--Subparagraph (A) of section 32(b)(2) of such Code is 
amended to read as follows:
                    ``(A) In general.--Subject to subparagraph (B), the 
                earned income amount and the phaseout amount shall be 
                determined as follows:


 
``In the case of an eligible    The earned income    The phaseout amount
      individual with:             amount is:                is:
 
1 qualifying child..........         $10,710               $13,520
2 or more qualifying                 $10,710               $13,520
 children...................
No qualifying children......         $6,000              $10,710''.
 

      
    (c) Inflation Adjustment.--Paragraph (1)(B) of section 32(j) of 
such Code (relating to inflation adjustments) is amended to read as 
follows:
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined--
                            ``(i) in the case of the amount in 
                        subsection (i)(1), by substituting `calendar 
                        year 1995' for `calendar year 1992' in 
                        subparagraph (B) thereof, and
                            ``(ii) in the case of amounts in subsection 
                        (b)(2)(A), by substituting `calendar year 2001' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof, and
                            ``(iii) in the case of the $3,000 amount in 
                        subsection (b)(2)(B)(iii), by substituting 
                        `calendar year 2007' for `calendar year 1992' 
                        in subparagraph (B) of such section 1.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 2. SIMPLIFICATION OF THE ADMINISTRATION OF THE EARNED INCOME TAX 
              CREDIT.

    (a) Modification of Joint Return Requirement.--Subsection (d) of 
section 32 of the Internal Revenue Code of 1986 (relating to married 
individuals) is amended to read as follows:
    ``(d) Married Individuals.--
            ``(1) In general.--If the taxpayer is married at the close 
        of the taxable year, the credit shall be allowed under 
        subsection (a) only if the taxpayer and his spouse file a joint 
        return for the taxable year.
            ``(2) Marital status.--For purposes of paragraph (1), an 
        individual legally separated from his spouse under a decree of 
        divorce or of separate maintenance shall not be considered as 
        married.
            ``(3) Certain married individuals living apart.--For 
        purposes of paragraph (1), if--
                    ``(A) an individual--
                            ``(i) is married and files a separate 
                        return, and
                            ``(ii) has a qualifying child who is a son, 
                        daughter, stepson, or stepdaughter of such 
                        individual, and
                    ``(B) during the last 6 months of such taxable 
                year, such individual and such individual's spouse do 
                not have the same principal place of abode,
        such individual shall not be considered as married.''.
    (b) Repeal Relating to Excessive Investment Income.--Subsection (i) 
of section 32 of such Code (relating to denial of credit for 
individuals having excessive investment income) is repealed.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.
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