[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3431 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3431

To amend the Internal Revenue Code of 1986 to make residents of Puerto 
            Rico eligible for the earned income tax credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 3, 2007

 Mr. Pascrell 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 residents of Puerto 
            Rico eligible for 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 ``Puerto Rico Work and Empowerment Act 
of 2007''.

SEC. 2. PUERTO RICO RESIDENTS ELIGIBLE FOR EARNED INCOME TAX CREDIT.

    (a) In General.--Section 32 of the Internal Revenue Code of 1986 
(relating to earned income) is amended by adding at the end the 
following new subsection:
    ``(n) Residents of Puerto Rico.--
            ``(1) In general.--In the case of residents of Puerto 
        Rico--
                    ``(A) the United States shall be treated as 
                including Puerto Rico for purposes of subsections 
                (c)(1)(A)(ii)(I) and (c)(3)(C),
                    ``(B) subsection (c)(1)(D) shall not apply to 
                nonresident alien individuals who are residents of 
                Puerto Rico, and
                    ``(C) adjusted gross income and gross income shall 
                be computed without regard to section 933 for purposes 
                of subsections (a)(2)(B) and (c)(2)(A)(i).
            ``(2) Limitation on credit.--
                    ``(A) In general.--The credit allowed under this 
                section by reason of this subsection for any taxable 
                year shall not exceed the taxpayer's social security 
                taxes for such year.
                    ``(B) Social security taxes.--For purposes of 
                subparagraph (A)--
                            ``(i) In general.--The term `social 
                        security taxes' means, with respect to any 
                        taxpayer for any taxable year--
                                    ``(I) the amount of the taxes 
                                imposed by sections 3101 and 3201(a) on 
                                amounts received by the taxpayer during 
                                the calendar year in which the taxable 
                                year begins,
                                    ``(II) the amount of the taxes 
                                imposed on employers by section 3111 
                                and 3221(a) on amounts received by the 
                                taxpayer during the calendar year which 
                                the taxable year begins,
                                    ``(III) the amount of the taxes 
                                imposed by section 1401 on the self-
                                employment income of the taxpayer for 
                                the taxable year, and
                                    ``(IV) the amount of the taxes 
                                imposed by section 3211(a) on amounts 
                                received by the taxpayer during the 
                                calendar year in which the taxable year 
                                begins.
                            ``(ii) Coordination with special refund of 
                        social security taxes.--The term `social 
                        security taxes' shall not include any taxes to 
                        the extent the taxpayer is entitled to a 
                        special refund of such taxes under section 
                        6413(c).
                            ``(iii) Special rule.--Any amounts paid 
                        pursuant to an agreement under section 3121(l) 
                        (relating to agreements entered into by 
                        American employers with respect to foreign 
                        affiliates) which are equivalent to the taxes 
                        imposed by sections 3101 and 3111 shall be 
                        treated as such taxes for purpose of clause 
                        (i).''.
    (b) Child Tax Credit Not Reduced.--Subclause (II) of section 
24(d)(1)(B)(ii) of such Code (relating to child tax credit) is amended 
by inserting before the period ``(determined without regard to section 
32(n) in the case of residents of Puerto Rico)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.
                                 <all>