[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 24 Introduced in Senate (IS)]







111th CONGRESS
  1st Session
                                 S. 24

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 7, 2009

 Mr. Kerry (for himself and Mr. Rockefeller) 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 2009''.

SEC. 2. STRENGTHEN THE EARNED INCOME TAX CREDIT.

    (a) Reduction in Marriage Penalty.--
            (1) In general.--Subparagraph (B) of section 32(b)(2) of 
        the Internal Revenue Code of 1986 is amended by striking 
        ``increased by'' and all that follows and inserting ``increased 
        by $5,000.''.
            (2) Inflation adjustment.--Clause (ii) of section 
        32(j)(1)(B) of such Code is amended--
                    (A) by striking ``$3,000 amount in subsection 
                (b)(2)(B)(iii)'' and inserting ``$5,000 amount in 
                subsection (b)(2)(B)'', and
                    (B) by striking ``calendar year 2007'' and 
                inserting ``calendar year 2008''.
    (b) Increase in Credit Percentage for Families With 3 or More 
Children.--The table contained in section 32(b)(1)(A) of the Internal 
Revenue Code of 1986 (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) Increased Credit for Individuals With No Qualifying Children.--
            (1) In general.--The table in subparagraph (A) of section 
        32(b)(2) of the Internal Revenue Code of 1986 is amended--
                    (A) by striking ``$4,220'' in the second column and 
                inserting ``$7,250'', and
                    (B) by striking ``$5,280'' in the last column and 
                inserting ``$14,500''.
            (2) Transitional phaseout amount for 2009.--
                    (A) In general.--Section 32(b)(2) of such Code, as 
                amended by subsection (a), is amended by redesignating 
                subparagraph (B) as subparagraph (C) and by inserting 
                after subparagraph (A) the following new subparagraph:
                    ``(B) Transitional phaseout amount for eligible 
                individuals with no qualifying children in 2009.--In 
                the case of taxable years beginning in 2009, the 
                phaseout amount for an eligible individual with no 
                qualifying children shall be $13,800.''.
                    (B) Conforming amendment.--Subparagraph (C) of 
                section 32(b)(2) of such Code, as redesignated by 
                paragraph (2), is amended by inserting ``or (B)'' after 
                ``subparagraph (A)''.
            (3) Inflation adjustments.--Subparagraph (B) of section 
        32(j)(1) of the Internal Revenue Code of 1986, as amended by 
        subsection (a), is amended--
                    (A) in clause (i)--
                            (i) by inserting ``(other than the amounts 
                        relating to individuals with no qualifying 
                        children)'' after ``(b)(2)(A)'', and
                            (ii) by striking ``and'' at the end,
                    (B) in clause (ii)--
                            (i) by striking ``(b)(2)(B)'' and inserting 
                        ``(b)(2)(C) and the $7,250 amount in the table 
                        in subsection (b)(2)(A)'', and
                            (ii) by striking the period and inserting 
                        ``, and'', and
                    (C) by adding at the end the following new clause:
                            ``(iii) in the case of the $14,500 amount 
                        in the table in subsection (b)(2)(A), by 
                        substituting `calendar year 2009' for `calendar 
                        year 1992' in subparagraph (B) of such section 
                        1.''.
    (d) Credit Increase and Reduction in Phaseout for Individuals With 
No Children.--The table contained in section 32(b)(1)(A) of the 
Internal Revenue Code of 1986 is amended--
            (1) by striking ``7.65'' in the second column of the third 
        row and inserting ``15.3'', and
            (2) by striking ``7.65'' in the third column of the third 
        row and inserting ``15.3''.
    (e) Credit Allowed for Certain Childless Individuals Over Age 21.--
Subclause (II) of section 32(c)(1)(A)(ii) of the Internal Revenue Code 
of 1986 (relating to eligible individual) is amended by striking ``age 
25'' and inserting ``age 21''.
    (f) Modification of Abandoned Spouse Rule.--
            (1) In general.--Section 32(c)(1) of the Internal Revenue 
        Code of 1986 (relating to eligible individual) is amended by 
        adding at the end the following new paragraph:
                    ``(G) Certain married individuals living apart.--
                For purposes of this section, an individual who--
                            ``(i) is married (within the meaning of 
                        section 7703(a)) and files a separate return 
                        for the taxable year,
                            ``(ii) lives with a qualifying child of the 
                        individual for more than one-half of such 
                        taxable year, and
                            ``(iii) during the last 6 months of such 
                        taxable year, does not have the same principal 
                        place of abode as the individual's spouse, 
                        shall not be considered as married.''.
            (2) Conforming amendments.--
                    (A) The last sentence of section 32(c)(1)(A) of the 
                Internal Revenue Code of 1986 is amended by striking 
                ``section 7703'' and inserting ``section 7703(a)''.
                    (B) Section 32(d) of such Code is amended by 
                striking ``In the case of an individual who is married 
                (within the meaning of section 7703)'' and inserting 
                ``In the case of an individual who is married (within 
                the meaning of section 7703(a)) and is not described in 
                subsection (c)(1)(G)''.
    (g) Elimination of Disqualified Investment Income Test.--
            (1) In general.--Section 32 of the Internal Revenue Code of 
        1986 is amended by striking subsection (i).
            (2) Conforming amendments.--
                    (A) Section 32(j)(1)(B)(i) of such Code, as amended 
                by this Act, is amended--
                            (i) by striking ``subsections'' and 
                        inserting ``subsection'', and
                            (ii) by striking ``and (i)(1)''.
                    (B) Section 32(j)(2) of such Code is amended to 
                read as follows:
            ``(2) Rounding.--If any dollar amount in subsection 
        (b)(2)(A) (after being increased under subparagraph (B) 
        thereof), after being increased under paragraph (1), is not a 
        multiple of $10, such amount shall be rounded to the next 
        nearest multiple of $10.''.
    (h) Simplification of Rules Regarding Presence of Qualifying 
Child.--
            (1) Taxpayer eligible for credit for worker without 
        qualifying child if qualifying child claimed by another member 
        of family.--Section 32(c)(1) of the Internal Revenue Code of 
        1986 (relating to eligible individual), as amended by this Act, 
        is amended by adding at the end the following new paragraph:
                    ``(H) Taxpayer eligible for credit for worker 
                without qualifying child if qualifying child claimed by 
                another member of family.--
                            ``(i) General rule.--Except as provided in 
                        clause (ii), in the case of 2 or more eligible 
                        individuals who may claim for such taxable year 
                        the same individual as a qualifying child, if 
                        such individual is claimed as a qualifying 
                        child by such an eligible individual, then any 
                        other such eligible individual who does not 
                        make such a claim of such child or of any other 
                        qualifying child may be considered an eligible 
                        individual without a qualifying child for 
                        purposes of the credit allowed under this 
                        section for such taxable year.
                            ``(ii) Exception if qualifying child 
                        claimed by parent.--If an individual is claimed 
                        as a qualifying child for any taxable year by 
                        an eligible individual who is a parent of such 
                        child, then no other parent of such child who 
                        does not make such a claim of such child or of 
                        any other qualifying child may be considered an 
                        eligible individual without a qualifying child 
                        for purposes of the credit allowed under this 
                        section for such taxable year.''.
            (2) Taxpayer eligible for credit for worker without 
        qualifying child if qualifying children do not have valid 
        social security number.--Subparagraph (F) of section 32(c)(1) 
        of the Internal Revenue Code of 1986 is amended to read as 
        follows:
                    ``(F) Individuals who do not include tin, etc., of 
                any qualifying child.--In the case of any eligible 
                individual who has one or more qualifying children, if 
                no qualifying child of such individual is taken into 
                account under subsection (b) by reason of paragraph 
                (3)(D), for purposes of the credit allowed under this 
                section, such individual may be considered an eligible 
                individual without a qualifying child.''.
    (i) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.
    (j) Repeal of EGTRRA 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 of such Act.
                                 <all>