[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1824 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1824

  To amend the Internal Revenue Code of 1986 to strengthen the earned 
                           income tax credit.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 5, 2005

Mr. Kerry (for himself and Mr. Schumer) 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.

    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 ``Strengthen the Earned Income Tax 
Credit Act of 2005''.

SEC. 2. STRENGTHEN THE EARNED INCOME TAX CREDIT.

    (a) Reduction in Marriage Penalty.--
            (1) In general.--Section 32(b)(2)(B) of the Internal 
        Revenue Code of 1986 (relating to joint returns) is amended by 
        striking clauses (ii) and (iii) and inserting the following new 
        clauses:
                            ``(ii) $2,000 in the case of taxable years 
                        beginning in 2005,
                            ``(iii) $3,000 in the case of taxable years 
                        beginning in 2006,
                            ``(iv) $3,500 in the case of taxable years 
                        beginning in 2007,
                            ``(v) $4,000 in the case of taxable years 
                        beginning in 2008,
                            ``(vi) $4,500 in the case of taxable years 
                        beginning in 2009, and
                            ``(vii) $5,000 in the case of taxable years 
                        beginning after 2009.''.
            (2) Inflation adjustment.--Section 32(j)(1)(B)(ii) of such 
        Code is amended--
                    (A) by striking ``$3,000'' and inserting 
                ``$5,000'', and
                    (B) by striking ``2007'' and inserting ``2009''.
            (3) Provisions not subject to 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(a) of such Act.
    (b) Increase in Credit Percentage for Families With 3 or More 
Children.--The table contained in section 32(b)(1)(A) of such Code 
(relating to percentages) is amended--
            (1) by striking ``2 or more qualifying children'' in the 
        second row and inserting ``2 qualifying children'', and
            (2) by inserting after the second row the following new 
        item:


------------------------------------------------------------------------
 
------------------------------------------------------------------------
``3 or more qualifying children..  45...................        21.06''.
------------------------------------------------------------------------

    (c) Reduction in Phaseout of Credit for Individuals With No 
Children.--The table contained in section 32(b)(1)(A) of such Code is 
amended by striking ``7.65'' in the third column of the third row and 
inserting ``3.82''.
    (d) Permanent Extension of Special Rule Treating Combat Pay as 
Earned Income.--
            (1) In general.--Clause (vi) of section 32(c)(2)(B) of such 
        Code (relating to earned income) is amended to read as follows:
                            ``(iv) a taxpayer may elect to treat 
                        amounts excluded from gross income by reason of 
                        section 112 as earned income.''.
            (2) Provision not subject to sunset.--Section 105 of the 
        Working Families Tax Relief Act of 2004 (relating to 
        application of EGTRRA sunset to this title) shall not apply to 
        section 104(b) of such Act.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.
                                 <all>