<enum>I</enum><header>Earned Income Tax Credit</header> <section id="H69E684E823E8459082DFCD649417BAAE"><enum>101.</enum><header>Strengthening the earned income tax credit for individuals with no qualifying children</header> <subsection id="H22C6BB6F27B94BAE8827F123687D41D4"><enum>(a)</enum><header>Special rules for 2019 and 2020</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32</external-xref> is amended by adding at the end the following new subsection:</text> <quoted-block display-inline="no-display-inline" id="H1FC6D072763E41D989B20E6851CC4544" style="OLC"> <subsection id="H992D4E172CA049C685C025FA77A2009B"><enum>(n)</enum><header>Special rules for individuals without qualifying children</header><text display-inline="yes-display-inline">In the case of any taxable year beginning in 2019 or 2020—</text> <paragraph id="H75BE32769007438DBECABE22B85E13A0"><enum>(1)</enum><header>Credit allowed for certain individuals over age 18</header> <subparagraph id="HC205A7A8B75145FBB097EA65F685B00B"><enum>(A)</enum><header>In general</header><text>Except in the case of a full-time student (or, in the case of a married individual, except if both the individual and the individual’s spouse are full-time students), subsection (c)(1)(A)(ii)(II) shall be applied by substituting <quote>age 19</quote> for <quote>age 25</quote>.</text> </subparagraph><subparagraph id="H7C575BD870DB4FABAA87A2197619921E"><enum>(B)</enum><header>Full-time student</header><text>For purposes of this paragraph, the term <quote>full-time student</quote> means, with respect to a taxable year, an individual who is an eligible student (as defined in section 25A(b)(3)) during at least 5 calendar months during the taxable year.</text> </subparagraph></paragraph><paragraph id="H29AF7533E3EB4C228321EC12374DA890"><enum>(2)</enum><header>Increase in maximum age for credit</header><text>Subsection (c)(1)(A)(ii)(II) shall be applied by substituting <quote>age 66</quote> for <quote>age 65</quote>.</text> </paragraph><paragraph id="H9B1982E12E1E4666B06B4FA454DA3AAC"><enum>(3)</enum><header>Increase in credit and phaseout percentages</header><text display-inline="yes-display-inline">The table contained in subsection (b)(1) shall be applied by substituting <quote>15.3</quote> for <quote>7.65</quote> each place it appears therein.</text> </paragraph><paragraph id="H5CEEE32A64714ABD9DCF6B828AC3D694"><enum>(4)</enum><header>Increase in earned income and phaseout amounts</header> <subparagraph id="H5B2F75BDA0E0403D870FA6C647FDFE10"><enum>(A)</enum><header>In general</header><text>The table contained in subsection (b)(2)(A) shall be applied—</text> <clause id="HA48269D5271B461F9931F6CD3932F017"><enum>(i)</enum><text>by substituting <quote>$9,570</quote> for <quote>$4,220</quote>, and</text> </clause><clause id="HDFBBFF57D9E54E4CA51074DAB78FAB84"><enum>(ii)</enum><text>by substituting <quote>$11,310</quote> for <quote>$5,280</quote>.</text> </clause></subparagraph><subparagraph id="H67EC83EA014A4530A89B8176D00C3AD6"><enum>(B)</enum><header>Coordination with inflation adjustment</header> <clause id="H7B5A7DC09AEF49C783A867990A96732D"><enum>(i)</enum><header>In general</header><text>In the case of any taxable year beginning after 2019, the $9,570 and $11,310 amounts in subparagraph (A) shall each be increased by an amount equal to—</text> <subclause id="H16C58AE0740C47659DDFD1824982CFCA"><enum>(I)</enum><text>such dollar amount, multiplied by</text> </subclause><subclause id="H8EC7247BD4C34171939A4D0F64DB494A"><enum>(II)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting <quote>2018</quote> for <quote>2016</quote> in subparagraph (A)(ii) thereof.</text> </subclause></clause><clause id="HE8C992F65A7B4387ACB9C72D6CE5094A"><enum>(ii)</enum><header>Rounding</header><text display-inline="yes-display-inline">If any increase under clause (i) is not a multiple of $10, such increase shall be rounded to the nearest multiple of $10.</text> </clause><clause id="H377932798977404683BFE3748C13E83B"><enum>(iii)</enum><header>Coordination with other inflation adjustment</header><text>Subsection (j) shall not apply to any dollar amount specified in this paragraph.</text></clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection commented="no" id="H6F3FC98C05DD4857819468B5DDBD9D6D"><enum>(b)</enum><header>Information return matching</header><text>As soon as practicable, the Secretary of the Treasury (or the Secretary’s delegate) shall develop and implement procedures for checking an individual’s claim for a credit under <external-xref legal-doc="usc" parsable-cite="usc/26/32">section 32</external-xref> of the Internal Revenue Code of 1986, by reason of subsection (n)(1) thereof, against any information return made with respect to such individual under section 6050S (relating to returns relating to higher education tuition and related expenses).</text> </subsection><subsection id="H242F4AAEA71043E1BF003D8D53F897E6"><enum>(c)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2018.</text> </subsection></section><section id="H09BA174D9BC4438BB916E95DB9767BD9"><enum>102.</enum><header>Taxpayer eligible for childless earned income credit in case of qualifying children who fail to meet certain identification requirements</header> <subsection id="HE2BCDC2544D642B38CA0EE2C618EFEE2"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32(c)(1)</external-xref> is amended by striking subparagraph (F).</text> </subsection><subsection id="H672E0E7570554A828DFE19CCB178F5E2"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section><section id="HB18AA175EFD6444CB74662EBC0C4C83C"><enum>103.</enum><header>Credit allowed in case of certain separated spouses</header> <subsection id="H0A66BAAFCDB3455380786329D4B43425"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32(d)</external-xref> is amended—</text> <paragraph id="HE462333371A346FAAE163D3FB48A6A4C"><enum>(1)</enum><text>by striking <quote><header-in-text level="subsection" style="OLC">Married individuals.—</header-in-text>In the case of</quote> and inserting the following:</text> <quoted-block display-inline="yes-display-inline" id="H5FF4A6A664654C689F4499B3A0972FB7" style="OLC"> <text><header-in-text level="subsection" style="OLC">Married individuals.—</header-in-text></text><paragraph id="HFDFD08AFB134432694B722C52493B389"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph><paragraph id="H9FA943DEA1494CF3AA4FBBF08A90DEAE"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="HED5F5DC3A34C4059B9533E1815CC1A10" style="OLC"> <paragraph id="HC4E81C6B25EC4F5C932D09B6740D0EDC"><enum>(2)</enum><header>Determination of marital status</header><text display-inline="yes-display-inline">For purposes of this section—</text> <subparagraph id="H0258F31FD4944905A979E228EE1F458D"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), marital status shall be determined under section 7703(a).</text> </subparagraph><subparagraph id="H316612EA52B3478C871DD5BA7D1D6C50"><enum>(B)</enum><header>Special rule for separated spouse</header><text display-inline="yes-display-inline">An individual shall not be treated as married if such individual—</text> <clause id="H5BC634C799E04B70A29310F83AB5F6B5"><enum>(i)</enum><text>is married (as determined under section 7703(a)) and does not file a joint return for the taxable year,</text> </clause><clause id="H08A8379E15AA44798D767FC6C8DDA079"><enum>(ii)</enum><text>lives with a qualifying child of the individual for more than one-half of such taxable year, and</text> </clause><clause id="H2A8E7ADB224346FC8C8752F4638B8823"><enum>(iii)</enum> <subclause commented="no" display-inline="yes-display-inline" id="HC2360B024F4343F6B0AF77AA97D137BC"><enum>(I)</enum><text>during the last 6 months of such taxable year, does not have the same principal place of abode as the individual’s spouse, or</text> </subclause><subclause id="HD42EDBA6B6AF46DA85B286F239C1E4ED" indent="up1"><enum>(II)</enum><text>has a decree, instrument, or agreement (other than a decree of divorce) described in section 121(d)(3)(C) with respect to the individual’s spouse and is not a member of the same household with the individual’s spouse by the end of the taxable year.</text></subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="H7DC3A64FAC6B4F4489F5E5A4C8ED57FF"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="HA2E72DFE55A44E48B5079BA8B3523381"><enum>(1)</enum><text display-inline="yes-display-inline">Section 32(c)(1)(A) of such Code is amended by striking the last sentence.</text> </paragraph><paragraph id="H2D0248A6E5B147E4BD0A319C4E754C4C"><enum>(2)</enum><text display-inline="yes-display-inline">Section 32(c)(1)(E)(ii) of such Code is amended by striking <quote>(within the meaning of section 7703)</quote>.</text> </paragraph><paragraph id="H7A5C20A3385546CC9DAE8CA83E29D6D2"><enum>(3)</enum><text>Section 32(d)(1) of such Code, as amended by subsection (a), is amended by striking <quote>(within the meaning of section 7703)</quote>.</text> </paragraph></subsection><subsection id="H54A5535F1F934955B81AB415A256B61E"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section><section id="HFEE849E814E842199854D5C442D2BCBC"><enum>104.</enum><header>Elimination of disqualified investment income test</header> <subsection id="H555B5BEFA31C4FA4A15B4D8A64C379BB"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32</external-xref> of the Internal Revenue Code of 1986 is amended by striking subsection (i).</text> </subsection><subsection id="H5E24E38CE4CD4681807DBA080C8DA69E"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="H7BF664CD39AD4D5D8CEACA4837402DBE"><enum>(1)</enum><text display-inline="yes-display-inline">Section 32(j)(1) of such Code is amended by striking <quote>subsection (b)(2) and (i)(1)</quote> and inserting <quote>subsection (b)(2)</quote>.</text> </paragraph><paragraph id="H8D5C4AAE14FE429D9D5A107CFBE9030E"><enum>(2)</enum><text display-inline="yes-display-inline">Section 32(j)(1)(B)(i) of such Code is amended by striking <quote>subsections (b)(2)(A) and (i)(1)</quote> and inserting <quote>subsection (b)(2)(A)</quote>.</text> </paragraph><paragraph id="HA98B050F3A7B464390AD43EC7D6AFEC4"><enum>(3)</enum><text>Section 32(j)(2) of such Code is amended—</text> <subparagraph id="HF4CC57061A93496ABE65C4364AA34CC1"><enum>(A)</enum><text>by striking subparagraph (B); and</text> </subparagraph><subparagraph id="H82569A79AAA040E4A9F7A9BE65AEE085"><enum>(B)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">Rounding.—</header-in-text></quote> and all that follows through <quote>If any dollar amount</quote> and inserting the following: <quote><header-in-text level="paragraph" style="OLC">Rounding.—</header-in-text>If any dollar amount</quote>.</text> </subparagraph></paragraph></subsection><subsection id="H5EEFA3ECCEC54E97B19A4EF1DFF55872"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section><section id="H9223271DCF2A40D688143B15EED123A8"><enum>105.</enum><header>Application of earned income tax credit in possessions of the United States</header> <subsection id="H5FD32B255F6249F8B15115A8418E4214"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/77">Chapter 77</external-xref> of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:</text> <quoted-block display-inline="no-display-inline" id="HEA8C20C6468F4C54A9CA201D45E08783" style="OLC"> <section id="H808FC73B2948482F96F2E1AA4530E842"><enum>7529.</enum><header>Application of earned income tax credit to possessions of the United States</header> <subsection id="H7A54755F3F39468491D2CBE5CB54A1AD"><enum>(a)</enum><header>Puerto Rico</header> <paragraph id="H7D696FFC495A41448D9FCDFCB121235D"><enum>(1)</enum><header>In general</header><text>With respect to calendar year 2020 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to Puerto Rico equal to—</text> <subparagraph id="H4931C5D79A384B58A8F5E428D7911254"><enum>(A)</enum><text>the specified matching amount for such calendar year, plus</text> </subparagraph><subparagraph id="H2701150616F84D78A6C27633C126D9A1"><enum>(B)</enum><text>in the case of calendar years 2020 through 2024, the lesser of—</text> <clause id="HCA9A2926643D4613BC10740866BE9681"><enum>(i)</enum><text>the expenditures made by Puerto Rico during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to the earned income tax credit, or</text> </clause><clause id="H6E20B6DBE83E4F93A93A7FBA5C5F60E0"><enum>(ii)</enum><text>$1,000,000.</text> </clause></subparagraph></paragraph><paragraph id="HD12E18066B464B3EA95ED55C755D15CA"><enum>(2)</enum><header>Requirement to reform earned income tax credit</header><text display-inline="yes-display-inline">The Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless Puerto Rico has in effect an earned income tax credit for taxable years beginning in or with such calendar year which (relative to the earned income tax credit which was in effect for taxable years beginning in or with calendar year 2019) increases the percentage of earned income which is allowed as a credit for each group of individuals with respect to which such percentage is separately stated or determined in a manner designed to substantially increase workforce participation.</text> </paragraph><paragraph id="HA0247ECD8A564F8D87BD73CB098AF56F"><enum>(3)</enum><header>Specified matching amount</header><text display-inline="yes-display-inline">For purposes of this subsection—</text> <subparagraph id="HFCC3E94419EC466C969D9C008A613256"><enum>(A)</enum><header>In general</header><text>The term <quote>specified matching amount</quote> means, with respect to any calendar year, the lesser of—</text> <clause id="H52F57941F28D4DB28FF39D670B078C36"><enum>(i)</enum><text>the excess (if any) of—</text> <subclause id="H9FFF4B0DE076458792F9976C7D31B95F"><enum>(I)</enum><text>the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with such calendar year, over</text> </subclause><subclause id="H81B29460D63C4B53B271E0BD5B65444B"><enum>(II)</enum><text>the base amount for such calendar year, or</text> </subclause></clause><clause id="HCF27B0730074435AAF71AA42CF4F7ED1"><enum>(ii)</enum><text display-inline="yes-display-inline">the product of 3, multiplied by the base amount for such calendar year.</text> </clause></subparagraph><subparagraph id="HD5DE70E1AD414FF2B28BF0A93540902D"><enum>(B)</enum><header>Base amount</header> <clause id="HC5CF15EB8C5F47159C2F90A2DE2A7C98"><enum>(i)</enum><header>Base amount for 2020</header><text>In the case of calendar year 2020, the term <quote>base amount</quote> means the greater of—</text> <subclause id="H0016B4AE67744A9A959454C4CCAE6813"><enum>(I)</enum><text>the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with calendar year 2019 (rounded to the nearest multiple of $1,000,000), or</text> </subclause><subclause id="H476F78F3E5D7492C8D241ABF814C564F"><enum>(II)</enum><text>$200,000,000.</text> </subclause></clause><clause commented="no" id="HAFA6C396A2FC46C78D107E579B9CF9E2"><enum>(ii)</enum><header>Inflation adjustment</header><text>In the case of any calendar year after 2020, the term <quote>base amount</quote> means the dollar amount determined under clause (i) increased by an amount equal to—</text> <subclause commented="no" id="H207D9AAF0F8C49CA98BC35951463A85F"><enum>(I)</enum><text>such dollar amount, multiplied by—</text> </subclause><subclause commented="no" id="HC599022620C042218DB88AA37B427C45"><enum>(II)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting <quote>calendar year 2019</quote> for <quote>calendar year 2016</quote> in subparagraph (A)(ii) thereof.</text> </subclause><continuation-text commented="no" continuation-text-level="clause">Any amount determined under this clause shall be rounded to the nearest multiple of $1,000,000.</continuation-text></clause></subparagraph></paragraph><paragraph id="H7FE7FE47CB5F4231B48DECA33C9EAA68"><enum>(4)</enum><header>Rules related to payments and reports</header> <subparagraph id="HF2A12C3CD3CD41D2988B709882C3EB48"><enum>(A)</enum><header>Timing of payments</header><text>The Secretary shall make payments under paragraph (1) for any calendar year—</text> <clause id="HC7A41AB67E4D4A37AE21346045D75B6F"><enum>(i)</enum><text>after receipt of the report described in subparagraph (B) for such calendar year, and</text> </clause><clause id="H5873C3399FD243058A0EADA4CFD467DC"><enum>(ii)</enum><text>except as provided in clause (i), within a reasonable period of time before the due date for individual income tax returns (as determined under the laws of Puerto Rico) for taxable years which began on the first day of such calendar year.</text> </clause></subparagraph><subparagraph id="H7D9F7FBE3BAF494B990DB0B4110A36F1"><enum>(B)</enum><header>Annual reports</header><text>With respect to calendar year 2020 and each calendar year thereafter, Puerto Rico shall provide to the Secretary a report which shall include—</text> <clause id="H1C4CC29271DD45D0A4F09A6408505A54"><enum>(i)</enum><text>an estimate of the costs described in paragraphs (1)(B)(i) and (3)(A)(i)(I) with respect to such calendar year, and</text> </clause><clause id="H84192CA25D84436589533F8D29F2309B"><enum>(ii)</enum><text>a statement of such costs with respect to the preceding calendar year.</text> </clause></subparagraph><subparagraph id="H7168CBF35AD047A5AB6F383390C064B8"><enum>(C)</enum><header>Adjustments</header> <clause id="HB0E0329AF7494CFB864DC6A0B4866037"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">In the event that any estimate of an amount is more or less than the actual amount as later determined and any payment under paragraph (1) was determined on the basis of such estimate, proper payment shall be made by, or to, the Secretary (as the case may be) as soon as practicable after the determination that such estimate was inaccurate. Proper adjustment shall be made in the amount of any subsequent payments made under paragraph (1) to the extent that proper payment is not made under the preceding sentence before such subsequent payments.</text> </clause><clause id="H47D5D30E8DF648A3BCBA987F99C5448F"><enum>(ii)</enum><header>Additional reports</header><text>The Secretary may require such additional periodic reports of the information described in subparagraph (B) as the Secretary determines appropriate to facilitate timely adjustments under clause (i).</text> </clause></subparagraph><subparagraph id="H92AD63D79418453B8B2217F918E487F6"><enum>(D)</enum><header>Determination of cost of earned income tax credit</header><text>For purposes of this subsection, the cost to Puerto Rico of the earned income tax credit shall be determined by the Secretary on the basis of the laws of Puerto Rico and shall include reductions in revenues received by Puerto Rico by reason of such credit and refunds attributable to such credit, but shall not include any administrative costs with respect to such credit.</text> </subparagraph><subparagraph id="H2E574A08A4B149508D983856E307265A"><enum>(E)</enum><header>Prevention of manipulation of base amount</header><text>No payments shall be made under paragraph (1) if the earned income tax credit as in effect in Puerto Rico for taxable years beginning in or with calendar year 2019 is modified after the date of the enactment of this subsection.</text> </subparagraph></paragraph></subsection><subsection id="H864367A28998492F86B52A7FD5F0A95D"><enum>(b)</enum><header>Possessions with mirror code tax systems</header> <paragraph id="H22BAB0A5C76E4390A5EC79BFE3A14628"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">With respect to calendar year 2020 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to the Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands equal to—</text> <subparagraph id="H79224BC349744A7EA96FD14C34FA1332"><enum>(A)</enum><text>75 percent of the cost to such possession of the earned income tax credit for taxable years beginning in or with such calendar year, plus</text> </subparagraph><subparagraph id="HC19CE1EB596C44F09166E028A9A58835"><enum>(B)</enum><text>in the case of calendar years 2020 through 2024, the lesser of—</text> <clause id="H8F1821DF05E7478E9EBAAA58CE72DCDB"><enum>(i)</enum><text>the expenditures made by such possession during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or</text> </clause><clause id="HAA6DAF7BCC794D76AFDB74B3196465D9"><enum>(ii)</enum><text>$50,000.</text> </clause></subparagraph></paragraph><paragraph id="H1B415EB370C842189A516A390DB3D8B1"><enum>(2)</enum><header>Application of certain rules</header><text>Rules similar to the rules of subparagraphs (A), (B), (C), and (D) of subsection (a)(4) shall apply for purposes of this subsection.</text> </paragraph></subsection><subsection id="HECBFC155E61F4D4F8F2629CC17D87273"><enum>(c)</enum><header>American Samoa</header> <paragraph id="HADCECD66546341BDA602540BA324D0CC"><enum>(1)</enum><header>In general</header><text>With respect to calendar year 2020 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to American Samoa equal to—</text> <subparagraph id="HED733CAAE83948389072CFC69546B66B"><enum>(A)</enum><text>the lesser of—</text> <clause id="H5782E1DF2A374DA58AD62293A16DF67B"><enum>(i)</enum><text>75 percent of the cost to American Samoa of the earned income tax credit for taxable years beginning in or with such calendar year, or</text> </clause><clause id="HE64299928D07461D8909B1E52E3A9312"><enum>(ii)</enum><text>$12,000,000, plus</text> </clause></subparagraph><subparagraph id="H9BE7C814AF6A477EB87D7871AC55AEC7"><enum>(B)</enum><text>in the case of calendar years 2020 through 2024, the lesser of—</text> <clause id="H0075E4D042D3453992F3CBC44F4A0CC1"><enum>(i)</enum><text>the expenditures made by American Samoa during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or</text> </clause><clause id="HBA25DD3883224135A7BF6437A01376AC"><enum>(ii)</enum><text>$50,000.</text> </clause></subparagraph></paragraph><paragraph id="H9F2CB8A5E00A4F9CBF1C19DDD40DE6DB"><enum>(2)</enum><header>Requirement to enact and maintain an earned income tax credit</header><text display-inline="yes-display-inline">The Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless American Samoa has in effect an earned income tax credit for taxable years beginning in or with such calendar year which allows a refundable tax credit to individuals on the basis of the taxpayer’s earned income which is designed to substantially increase workforce participation.</text> </paragraph><paragraph commented="no" id="HF8C946F270C54C51999390EF624AD56E"><enum>(3)</enum><header>Inflation adjustment</header><text>In the case of any calendar year after 2020, the $12,000,000 amount in paragraph (1)(A)(ii) shall be increased by an amount equal to—</text> <subparagraph commented="no" id="H4F9D5C78D12C437DBA951C4C3821DAF1"><enum>(A)</enum><text>such dollar amount, multiplied by—</text> </subparagraph><subparagraph commented="no" id="H3D3C89182248437E87B3E190A9EE404E"><enum>(B)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting <quote>calendar year 2019</quote> for <quote>calendar year 2016</quote> in subparagraph (A)(ii) thereof.</text> </subparagraph><continuation-text commented="no" continuation-text-level="paragraph">Any increase determined under this clause shall be rounded to the nearest multiple of $100,000.</continuation-text></paragraph><paragraph id="HDDC63F20728F4EE093530031B5B7157E"><enum>(4)</enum><header>Application of certain rules</header><text>Rules similar to the rules of subparagraphs (A), (B), (C), and (D) of subsection (a)(4) shall apply for purposes of this subsection.</text> </paragraph></subsection><subsection id="H60825C3739B141969B6F8B9646B214C9"><enum>(d)</enum><header>Treatment of payments</header><text>For purposes of section 1324 of title 31, United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H6E6265A2E9FA4AE295439F2202039E64"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:</text> <quoted-block display-inline="no-display-inline" id="H664DD18E9EA84EE2A1AEC4A414218928" style="OLC"> <toc container-level="quoted-block-container" idref="HEA8C20C6468F4C54A9CA201D45E08783" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration"> <toc-entry idref="H808FC73B2948482F96F2E1AA4530E842" level="section">Sec. 7529. Application of earned income tax credit to possessions of the United States.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>

116 HR 3300 IH: Economic Mobility Act of 2019 U.S. House of Representatives 2019-06-18 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

Short title; etc

(a)

Short title

This Act may be cited as the

Economic Mobility Act of 2019

. (b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; etc.

Title I—Earned Income Tax Credit

Sec. 101. Strengthening the earned income tax credit for individuals with no qualifying children.

Sec. 102. Taxpayer eligible for childless earned income credit in case of qualifying children who fail to meet certain identification requirements.

Sec. 103. Credit allowed in case of certain separated spouses.

Sec. 104. Elimination of disqualified investment income test.

Sec. 105. Application of earned income tax credit in possessions of the United States.

Title II—Child Tax Credit

Sec. 201. Child tax credit fully refundable for 2019 and 2020.

Sec. 202. Payments to possessions.

Title III—Dependent Care Assistance

Sec. 301. Refundability and enhancement of child and dependent care tax credit.

Sec. 302. Increase in exclusion for employer-provided dependent care assistance.

Title IV—Certain Fringe Benefit Expenses

Sec. 401. Repeal of inclusion of certain fringe benefit expenses in unrelated business taxable income.

(c)

Amendment of 1986 Code

Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

<enum>I</enum><header>Earned Income Tax Credit</header> <section id="H69E684E823E8459082DFCD649417BAAE"><enum>101.</enum><header>Strengthening the earned income tax credit for individuals with no qualifying children</header> <subsection id="H22C6BB6F27B94BAE8827F123687D41D4"><enum>(a)</enum><header>Special rules for 2019 and 2020</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32</external-xref> is amended by adding at the end the following new subsection:</text> <quoted-block display-inline="no-display-inline" id="H1FC6D072763E41D989B20E6851CC4544" style="OLC"> <subsection id="H992D4E172CA049C685C025FA77A2009B"><enum>(n)</enum><header>Special rules for individuals without qualifying children</header><text display-inline="yes-display-inline">In the case of any taxable year beginning in 2019 or 2020—</text> <paragraph id="H75BE32769007438DBECABE22B85E13A0"><enum>(1)</enum><header>Credit allowed for certain individuals over age 18</header> <subparagraph id="HC205A7A8B75145FBB097EA65F685B00B"><enum>(A)</enum><header>In general</header><text>Except in the case of a full-time student (or, in the case of a married individual, except if both the individual and the individual’s spouse are full-time students), subsection (c)(1)(A)(ii)(II) shall be applied by substituting <quote>age 19</quote> for <quote>age 25</quote>.</text> </subparagraph><subparagraph id="H7C575BD870DB4FABAA87A2197619921E"><enum>(B)</enum><header>Full-time student</header><text>For purposes of this paragraph, the term <quote>full-time student</quote> means, with respect to a taxable year, an individual who is an eligible student (as defined in section 25A(b)(3)) during at least 5 calendar months during the taxable year.</text> </subparagraph></paragraph><paragraph id="H29AF7533E3EB4C228321EC12374DA890"><enum>(2)</enum><header>Increase in maximum age for credit</header><text>Subsection (c)(1)(A)(ii)(II) shall be applied by substituting <quote>age 66</quote> for <quote>age 65</quote>.</text> </paragraph><paragraph id="H9B1982E12E1E4666B06B4FA454DA3AAC"><enum>(3)</enum><header>Increase in credit and phaseout percentages</header><text display-inline="yes-display-inline">The table contained in subsection (b)(1) shall be applied by substituting <quote>15.3</quote> for <quote>7.65</quote> each place it appears therein.</text> </paragraph><paragraph id="H5CEEE32A64714ABD9DCF6B828AC3D694"><enum>(4)</enum><header>Increase in earned income and phaseout amounts</header> <subparagraph id="H5B2F75BDA0E0403D870FA6C647FDFE10"><enum>(A)</enum><header>In general</header><text>The table contained in subsection (b)(2)(A) shall be applied—</text> <clause id="HA48269D5271B461F9931F6CD3932F017"><enum>(i)</enum><text>by substituting <quote>$9,570</quote> for <quote>$4,220</quote>, and</text> </clause><clause id="HDFBBFF57D9E54E4CA51074DAB78FAB84"><enum>(ii)</enum><text>by substituting <quote>$11,310</quote> for <quote>$5,280</quote>.</text> </clause></subparagraph><subparagraph id="H67EC83EA014A4530A89B8176D00C3AD6"><enum>(B)</enum><header>Coordination with inflation adjustment</header> <clause id="H7B5A7DC09AEF49C783A867990A96732D"><enum>(i)</enum><header>In general</header><text>In the case of any taxable year beginning after 2019, the $9,570 and $11,310 amounts in subparagraph (A) shall each be increased by an amount equal to—</text> <subclause id="H16C58AE0740C47659DDFD1824982CFCA"><enum>(I)</enum><text>such dollar amount, multiplied by</text> </subclause><subclause id="H8EC7247BD4C34171939A4D0F64DB494A"><enum>(II)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting <quote>2018</quote> for <quote>2016</quote> in subparagraph (A)(ii) thereof.</text> </subclause></clause><clause id="HE8C992F65A7B4387ACB9C72D6CE5094A"><enum>(ii)</enum><header>Rounding</header><text display-inline="yes-display-inline">If any increase under clause (i) is not a multiple of $10, such increase shall be rounded to the nearest multiple of $10.</text> </clause><clause id="H377932798977404683BFE3748C13E83B"><enum>(iii)</enum><header>Coordination with other inflation adjustment</header><text>Subsection (j) shall not apply to any dollar amount specified in this paragraph.</text></clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection commented="no" id="H6F3FC98C05DD4857819468B5DDBD9D6D"><enum>(b)</enum><header>Information return matching</header><text>As soon as practicable, the Secretary of the Treasury (or the Secretary’s delegate) shall develop and implement procedures for checking an individual’s claim for a credit under <external-xref legal-doc="usc" parsable-cite="usc/26/32">section 32</external-xref> of the Internal Revenue Code of 1986, by reason of subsection (n)(1) thereof, against any information return made with respect to such individual under section 6050S (relating to returns relating to higher education tuition and related expenses).</text> </subsection><subsection id="H242F4AAEA71043E1BF003D8D53F897E6"><enum>(c)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2018.</text> </subsection></section><section id="H09BA174D9BC4438BB916E95DB9767BD9"><enum>102.</enum><header>Taxpayer eligible for childless earned income credit in case of qualifying children who fail to meet certain identification requirements</header> <subsection id="HE2BCDC2544D642B38CA0EE2C618EFEE2"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32(c)(1)</external-xref> is amended by striking subparagraph (F).</text> </subsection><subsection id="H672E0E7570554A828DFE19CCB178F5E2"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section><section id="HB18AA175EFD6444CB74662EBC0C4C83C"><enum>103.</enum><header>Credit allowed in case of certain separated spouses</header> <subsection id="H0A66BAAFCDB3455380786329D4B43425"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32(d)</external-xref> is amended—</text> <paragraph id="HE462333371A346FAAE163D3FB48A6A4C"><enum>(1)</enum><text>by striking <quote><header-in-text level="subsection" style="OLC">Married individuals.—</header-in-text>In the case of</quote> and inserting the following:</text> <quoted-block display-inline="yes-display-inline" id="H5FF4A6A664654C689F4499B3A0972FB7" style="OLC"> <text><header-in-text level="subsection" style="OLC">Married individuals.—</header-in-text></text><paragraph id="HFDFD08AFB134432694B722C52493B389"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph><paragraph id="H9FA943DEA1494CF3AA4FBBF08A90DEAE"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="HED5F5DC3A34C4059B9533E1815CC1A10" style="OLC"> <paragraph id="HC4E81C6B25EC4F5C932D09B6740D0EDC"><enum>(2)</enum><header>Determination of marital status</header><text display-inline="yes-display-inline">For purposes of this section—</text> <subparagraph id="H0258F31FD4944905A979E228EE1F458D"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), marital status shall be determined under section 7703(a).</text> </subparagraph><subparagraph id="H316612EA52B3478C871DD5BA7D1D6C50"><enum>(B)</enum><header>Special rule for separated spouse</header><text display-inline="yes-display-inline">An individual shall not be treated as married if such individual—</text> <clause id="H5BC634C799E04B70A29310F83AB5F6B5"><enum>(i)</enum><text>is married (as determined under section 7703(a)) and does not file a joint return for the taxable year,</text> </clause><clause id="H08A8379E15AA44798D767FC6C8DDA079"><enum>(ii)</enum><text>lives with a qualifying child of the individual for more than one-half of such taxable year, and</text> </clause><clause id="H2A8E7ADB224346FC8C8752F4638B8823"><enum>(iii)</enum> <subclause commented="no" display-inline="yes-display-inline" id="HC2360B024F4343F6B0AF77AA97D137BC"><enum>(I)</enum><text>during the last 6 months of such taxable year, does not have the same principal place of abode as the individual’s spouse, or</text> </subclause><subclause id="HD42EDBA6B6AF46DA85B286F239C1E4ED" indent="up1"><enum>(II)</enum><text>has a decree, instrument, or agreement (other than a decree of divorce) described in section 121(d)(3)(C) with respect to the individual’s spouse and is not a member of the same household with the individual’s spouse by the end of the taxable year.</text></subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="H7DC3A64FAC6B4F4489F5E5A4C8ED57FF"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="HA2E72DFE55A44E48B5079BA8B3523381"><enum>(1)</enum><text display-inline="yes-display-inline">Section 32(c)(1)(A) of such Code is amended by striking the last sentence.</text> </paragraph><paragraph id="H2D0248A6E5B147E4BD0A319C4E754C4C"><enum>(2)</enum><text display-inline="yes-display-inline">Section 32(c)(1)(E)(ii) of such Code is amended by striking <quote>(within the meaning of section 7703)</quote>.</text> </paragraph><paragraph id="H7A5C20A3385546CC9DAE8CA83E29D6D2"><enum>(3)</enum><text>Section 32(d)(1) of such Code, as amended by subsection (a), is amended by striking <quote>(within the meaning of section 7703)</quote>.</text> </paragraph></subsection><subsection id="H54A5535F1F934955B81AB415A256B61E"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section><section id="HFEE849E814E842199854D5C442D2BCBC"><enum>104.</enum><header>Elimination of disqualified investment income test</header> <subsection id="H555B5BEFA31C4FA4A15B4D8A64C379BB"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32</external-xref> of the Internal Revenue Code of 1986 is amended by striking subsection (i).</text> </subsection><subsection id="H5E24E38CE4CD4681807DBA080C8DA69E"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="H7BF664CD39AD4D5D8CEACA4837402DBE"><enum>(1)</enum><text display-inline="yes-display-inline">Section 32(j)(1) of such Code is amended by striking <quote>subsection (b)(2) and (i)(1)</quote> and inserting <quote>subsection (b)(2)</quote>.</text> </paragraph><paragraph id="H8D5C4AAE14FE429D9D5A107CFBE9030E"><enum>(2)</enum><text display-inline="yes-display-inline">Section 32(j)(1)(B)(i) of such Code is amended by striking <quote>subsections (b)(2)(A) and (i)(1)</quote> and inserting <quote>subsection (b)(2)(A)</quote>.</text> </paragraph><paragraph id="HA98B050F3A7B464390AD43EC7D6AFEC4"><enum>(3)</enum><text>Section 32(j)(2) of such Code is amended—</text> <subparagraph id="HF4CC57061A93496ABE65C4364AA34CC1"><enum>(A)</enum><text>by striking subparagraph (B); and</text> </subparagraph><subparagraph id="H82569A79AAA040E4A9F7A9BE65AEE085"><enum>(B)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">Rounding.—</header-in-text></quote> and all that follows through <quote>If any dollar amount</quote> and inserting the following: <quote><header-in-text level="paragraph" style="OLC">Rounding.—</header-in-text>If any dollar amount</quote>.</text> </subparagraph></paragraph></subsection><subsection id="H5EEFA3ECCEC54E97B19A4EF1DFF55872"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section><section id="H9223271DCF2A40D688143B15EED123A8"><enum>105.</enum><header>Application of earned income tax credit in possessions of the United States</header> <subsection id="H5FD32B255F6249F8B15115A8418E4214"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/77">Chapter 77</external-xref> of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:</text> <quoted-block display-inline="no-display-inline" id="HEA8C20C6468F4C54A9CA201D45E08783" style="OLC"> <section id="H808FC73B2948482F96F2E1AA4530E842"><enum>7529.</enum><header>Application of earned income tax credit to possessions of the United States</header> <subsection id="H7A54755F3F39468491D2CBE5CB54A1AD"><enum>(a)</enum><header>Puerto Rico</header> <paragraph id="H7D696FFC495A41448D9FCDFCB121235D"><enum>(1)</enum><header>In general</header><text>With respect to calendar year 2020 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to Puerto Rico equal to—</text> <subparagraph id="H4931C5D79A384B58A8F5E428D7911254"><enum>(A)</enum><text>the specified matching amount for such calendar year, plus</text> </subparagraph><subparagraph id="H2701150616F84D78A6C27633C126D9A1"><enum>(B)</enum><text>in the case of calendar years 2020 through 2024, the lesser of—</text> <clause id="HCA9A2926643D4613BC10740866BE9681"><enum>(i)</enum><text>the expenditures made by Puerto Rico during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to the earned income tax credit, or</text> </clause><clause id="H6E20B6DBE83E4F93A93A7FBA5C5F60E0"><enum>(ii)</enum><text>$1,000,000.</text> </clause></subparagraph></paragraph><paragraph id="HD12E18066B464B3EA95ED55C755D15CA"><enum>(2)</enum><header>Requirement to reform earned income tax credit</header><text display-inline="yes-display-inline">The Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless Puerto Rico has in effect an earned income tax credit for taxable years beginning in or with such calendar year which (relative to the earned income tax credit which was in effect for taxable years beginning in or with calendar year 2019) increases the percentage of earned income which is allowed as a credit for each group of individuals with respect to which such percentage is separately stated or determined in a manner designed to substantially increase workforce participation.</text> </paragraph><paragraph id="HA0247ECD8A564F8D87BD73CB098AF56F"><enum>(3)</enum><header>Specified matching amount</header><text display-inline="yes-display-inline">For purposes of this subsection—</text> <subparagraph id="HFCC3E94419EC466C969D9C008A613256"><enum>(A)</enum><header>In general</header><text>The term <quote>specified matching amount</quote> means, with respect to any calendar year, the lesser of—</text> <clause id="H52F57941F28D4DB28FF39D670B078C36"><enum>(i)</enum><text>the excess (if any) of—</text> <subclause id="H9FFF4B0DE076458792F9976C7D31B95F"><enum>(I)</enum><text>the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with such calendar year, over</text> </subclause><subclause id="H81B29460D63C4B53B271E0BD5B65444B"><enum>(II)</enum><text>the base amount for such calendar year, or</text> </subclause></clause><clause id="HCF27B0730074435AAF71AA42CF4F7ED1"><enum>(ii)</enum><text display-inline="yes-display-inline">the product of 3, multiplied by the base amount for such calendar year.</text> </clause></subparagraph><subparagraph id="HD5DE70E1AD414FF2B28BF0A93540902D"><enum>(B)</enum><header>Base amount</header> <clause id="HC5CF15EB8C5F47159C2F90A2DE2A7C98"><enum>(i)</enum><header>Base amount for 2020</header><text>In the case of calendar year 2020, the term <quote>base amount</quote> means the greater of—</text> <subclause id="H0016B4AE67744A9A959454C4CCAE6813"><enum>(I)</enum><text>the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with calendar year 2019 (rounded to the nearest multiple of $1,000,000), or</text> </subclause><subclause id="H476F78F3E5D7492C8D241ABF814C564F"><enum>(II)</enum><text>$200,000,000.</text> </subclause></clause><clause commented="no" id="HAFA6C396A2FC46C78D107E579B9CF9E2"><enum>(ii)</enum><header>Inflation adjustment</header><text>In the case of any calendar year after 2020, the term <quote>base amount</quote> means the dollar amount determined under clause (i) increased by an amount equal to—</text> <subclause commented="no" id="H207D9AAF0F8C49CA98BC35951463A85F"><enum>(I)</enum><text>such dollar amount, multiplied by—</text> </subclause><subclause commented="no" id="HC599022620C042218DB88AA37B427C45"><enum>(II)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting <quote>calendar year 2019</quote> for <quote>calendar year 2016</quote> in subparagraph (A)(ii) thereof.</text> </subclause><continuation-text commented="no" continuation-text-level="clause">Any amount determined under this clause shall be rounded to the nearest multiple of $1,000,000.</continuation-text></clause></subparagraph></paragraph><paragraph id="H7FE7FE47CB5F4231B48DECA33C9EAA68"><enum>(4)</enum><header>Rules related to payments and reports</header> <subparagraph id="HF2A12C3CD3CD41D2988B709882C3EB48"><enum>(A)</enum><header>Timing of payments</header><text>The Secretary shall make payments under paragraph (1) for any calendar year—</text> <clause id="HC7A41AB67E4D4A37AE21346045D75B6F"><enum>(i)</enum><text>after receipt of the report described in subparagraph (B) for such calendar year, and</text> </clause><clause id="H5873C3399FD243058A0EADA4CFD467DC"><enum>(ii)</enum><text>except as provided in clause (i), within a reasonable period of time before the due date for individual income tax returns (as determined under the laws of Puerto Rico) for taxable years which began on the first day of such calendar year.</text> </clause></subparagraph><subparagraph id="H7D9F7FBE3BAF494B990DB0B4110A36F1"><enum>(B)</enum><header>Annual reports</header><text>With respect to calendar year 2020 and each calendar year thereafter, Puerto Rico shall provide to the Secretary a report which shall include—</text> <clause id="H1C4CC29271DD45D0A4F09A6408505A54"><enum>(i)</enum><text>an estimate of the costs described in paragraphs (1)(B)(i) and (3)(A)(i)(I) with respect to such calendar year, and</text> </clause><clause id="H84192CA25D84436589533F8D29F2309B"><enum>(ii)</enum><text>a statement of such costs with respect to the preceding calendar year.</text> </clause></subparagraph><subparagraph id="H7168CBF35AD047A5AB6F383390C064B8"><enum>(C)</enum><header>Adjustments</header> <clause id="HB0E0329AF7494CFB864DC6A0B4866037"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">In the event that any estimate of an amount is more or less than the actual amount as later determined and any payment under paragraph (1) was determined on the basis of such estimate, proper payment shall be made by, or to, the Secretary (as the case may be) as soon as practicable after the determination that such estimate was inaccurate. Proper adjustment shall be made in the amount of any subsequent payments made under paragraph (1) to the extent that proper payment is not made under the preceding sentence before such subsequent payments.</text> </clause><clause id="H47D5D30E8DF648A3BCBA987F99C5448F"><enum>(ii)</enum><header>Additional reports</header><text>The Secretary may require such additional periodic reports of the information described in subparagraph (B) as the Secretary determines appropriate to facilitate timely adjustments under clause (i).</text> </clause></subparagraph><subparagraph id="H92AD63D79418453B8B2217F918E487F6"><enum>(D)</enum><header>Determination of cost of earned income tax credit</header><text>For purposes of this subsection, the cost to Puerto Rico of the earned income tax credit shall be determined by the Secretary on the basis of the laws of Puerto Rico and shall include reductions in revenues received by Puerto Rico by reason of such credit and refunds attributable to such credit, but shall not include any administrative costs with respect to such credit.</text> </subparagraph><subparagraph id="H2E574A08A4B149508D983856E307265A"><enum>(E)</enum><header>Prevention of manipulation of base amount</header><text>No payments shall be made under paragraph (1) if the earned income tax credit as in effect in Puerto Rico for taxable years beginning in or with calendar year 2019 is modified after the date of the enactment of this subsection.</text> </subparagraph></paragraph></subsection><subsection id="H864367A28998492F86B52A7FD5F0A95D"><enum>(b)</enum><header>Possessions with mirror code tax systems</header> <paragraph id="H22BAB0A5C76E4390A5EC79BFE3A14628"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">With respect to calendar year 2020 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to the Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands equal to—</text> <subparagraph id="H79224BC349744A7EA96FD14C34FA1332"><enum>(A)</enum><text>75 percent of the cost to such possession of the earned income tax credit for taxable years beginning in or with such calendar year, plus</text> </subparagraph><subparagraph id="HC19CE1EB596C44F09166E028A9A58835"><enum>(B)</enum><text>in the case of calendar years 2020 through 2024, the lesser of—</text> <clause id="H8F1821DF05E7478E9EBAAA58CE72DCDB"><enum>(i)</enum><text>the expenditures made by such possession during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or</text> </clause><clause id="HAA6DAF7BCC794D76AFDB74B3196465D9"><enum>(ii)</enum><text>$50,000.</text> </clause></subparagraph></paragraph><paragraph id="H1B415EB370C842189A516A390DB3D8B1"><enum>(2)</enum><header>Application of certain rules</header><text>Rules similar to the rules of subparagraphs (A), (B), (C), and (D) of subsection (a)(4) shall apply for purposes of this subsection.</text> </paragraph></subsection><subsection id="HECBFC155E61F4D4F8F2629CC17D87273"><enum>(c)</enum><header>American Samoa</header> <paragraph id="HADCECD66546341BDA602540BA324D0CC"><enum>(1)</enum><header>In general</header><text>With respect to calendar year 2020 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to American Samoa equal to—</text> <subparagraph id="HED733CAAE83948389072CFC69546B66B"><enum>(A)</enum><text>the lesser of—</text> <clause id="H5782E1DF2A374DA58AD62293A16DF67B"><enum>(i)</enum><text>75 percent of the cost to American Samoa of the earned income tax credit for taxable years beginning in or with such calendar year, or</text> </clause><clause id="HE64299928D07461D8909B1E52E3A9312"><enum>(ii)</enum><text>$12,000,000, plus</text> </clause></subparagraph><subparagraph id="H9BE7C814AF6A477EB87D7871AC55AEC7"><enum>(B)</enum><text>in the case of calendar years 2020 through 2024, the lesser of—</text> <clause id="H0075E4D042D3453992F3CBC44F4A0CC1"><enum>(i)</enum><text>the expenditures made by American Samoa during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or</text> </clause><clause id="HBA25DD3883224135A7BF6437A01376AC"><enum>(ii)</enum><text>$50,000.</text> </clause></subparagraph></paragraph><paragraph id="H9F2CB8A5E00A4F9CBF1C19DDD40DE6DB"><enum>(2)</enum><header>Requirement to enact and maintain an earned income tax credit</header><text display-inline="yes-display-inline">The Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless American Samoa has in effect an earned income tax credit for taxable years beginning in or with such calendar year which allows a refundable tax credit to individuals on the basis of the taxpayer’s earned income which is designed to substantially increase workforce participation.</text> </paragraph><paragraph commented="no" id="HF8C946F270C54C51999390EF624AD56E"><enum>(3)</enum><header>Inflation adjustment</header><text>In the case of any calendar year after 2020, the $12,000,000 amount in paragraph (1)(A)(ii) shall be increased by an amount equal to—</text> <subparagraph commented="no" id="H4F9D5C78D12C437DBA951C4C3821DAF1"><enum>(A)</enum><text>such dollar amount, multiplied by—</text> </subparagraph><subparagraph commented="no" id="H3D3C89182248437E87B3E190A9EE404E"><enum>(B)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting <quote>calendar year 2019</quote> for <quote>calendar year 2016</quote> in subparagraph (A)(ii) thereof.</text> </subparagraph><continuation-text commented="no" continuation-text-level="paragraph">Any increase determined under this clause shall be rounded to the nearest multiple of $100,000.</continuation-text></paragraph><paragraph id="HDDC63F20728F4EE093530031B5B7157E"><enum>(4)</enum><header>Application of certain rules</header><text>Rules similar to the rules of subparagraphs (A), (B), (C), and (D) of subsection (a)(4) shall apply for purposes of this subsection.</text> </paragraph></subsection><subsection id="H60825C3739B141969B6F8B9646B214C9"><enum>(d)</enum><header>Treatment of payments</header><text>For purposes of section 1324 of title 31, United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H6E6265A2E9FA4AE295439F2202039E64"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:</text> <quoted-block display-inline="no-display-inline" id="H664DD18E9EA84EE2A1AEC4A414218928" style="OLC"> <toc container-level="quoted-block-container" idref="HEA8C20C6468F4C54A9CA201D45E08783" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration"> <toc-entry idref="H808FC73B2948482F96F2E1AA4530E842" level="section">Sec. 7529. Application of earned income tax credit to possessions of the United States.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section><enum>II</enum><header>Child Tax Credit</header> <section commented="no" id="HA2CC950ECD4E40A9BEECA6A1E72E878F" section-type="subsequent-section"><enum>201.</enum><header>Child tax credit fully refundable for 2019 and 2020</header> <subsection commented="no" id="H859D8734E5E94C96B10D61AB425FF877"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/24">Section 24(h)</external-xref> is amended by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="H4A9545930C394C309EA5067E40D2735A" style="OLC"> <paragraph commented="no" id="H341353BD926F40059D9B2F497E45F286"><enum>(8)</enum><header>Credit fully refundable for 2019 and 2020</header><text display-inline="yes-display-inline">In the case of an individual other than a nonresident alien, for any taxable year beginning in 2019 or 2020—</text> <subparagraph commented="no" id="H57FEE44216BE479784F2446D4E9673BB"><enum>(A)</enum><text display-inline="yes-display-inline">paragraph (5) of this subsection shall not apply, and</text> </subparagraph><subparagraph commented="no" id="HABD324BD79AD4B088287347CD0A72E0C"><enum>(B)</enum><text>the increase determined under the first sentence of subsection (d)(1) shall be the amount determined under subparagraph (A) of such subsection (determined without regard to paragraph (4) of this subsection).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection commented="no" id="HFD50BEAA6F7743BEA9039625427701EF"><enum>(b)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendment made by this section shall apply to taxable years beginning after December 31, 2018.</text> </subsection></section><section id="H245A7614D3974B7FAD693F87DD6E5E0F"><enum>202.</enum><header>Payments to possessions</header> <subsection id="H62D59E21F1ED4F2FA984403663F6B4F9"><enum>(a)</enum><header>Mirror code possession</header><text>The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of <external-xref legal-doc="usc" parsable-cite="usc/26/24">section 24</external-xref> of the Internal Revenue Code of 1986 with respect to taxable years beginning after 2018. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.</text> </subsection><subsection id="H37BCF0C2A18A467CAAD8EAEF58F854A4"><enum>(b)</enum><header>Other possessions</header><text>The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the application of section 24 of such Code for taxable years beginning after 2018 if the provisions of such section had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession in a manner which replicates to the greatest degree practicable the benefits that would have been so provided to each such resident.</text> </subsection><subsection id="H66B8C3A6C7CA42F2A085C06A2C7A91ED"><enum>(c)</enum><header>Coordination with credit allowed against United States income taxes</header> <paragraph id="H047DC8CEC6864F50A8C3EAC7042A9674"><enum>(1)</enum><header>In general</header><text>No credit shall be allowed against United States income taxes for any taxable year under <external-xref legal-doc="usc" parsable-cite="usc/26/24">section 24</external-xref> of the Internal Revenue Code of 1986 to any person—</text> <subparagraph id="H2290E1605ECA44DBBE7EDD816A3447E8"><enum>(A)</enum><text display-inline="yes-display-inline">to whom a credit is allowed against taxes imposed by a possession with a mirror code tax system by reason of the application of section 24 of such Code in such possession for such taxable year; or</text> </subparagraph><subparagraph id="H22256FB28EC6441481327F93F14E2BE1"><enum>(B)</enum><text>who is eligible for a payment under a plan described in subsection (b) with respect to such taxable year.</text> </subparagraph></paragraph><paragraph id="H11BD977AD9B64B0EA613E5A4517998F8"><enum>(2)</enum><header>Restriction on refundable credit</header><text>In the case of any person to whom a credit would be allowed against taxes imposed by a possession which does not have a mirror code tax system if the provisions of such section 24 had been in effect in such possession for the taxable year (and who is not described in paragraph (1)(B)), section 24(h)(8) of such Code (as added by this Act) shall not apply to such person for such taxable year.</text> </paragraph></subsection><subsection id="H2CCC4306A63F48B1BCD1F301BD2736A7"><enum>(d)</enum><header>Definitions and special rules</header> <paragraph id="H84173AF0C43B47A6B5DB8DF8E10A7EA1"><enum>(1)</enum><header>Possession of the United States</header><text>For purposes of this section, the term <quote>possession of the United States</quote> includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.</text> </paragraph><paragraph id="HA37E52B14D324227B6EB260B5A0813E7"><enum>(2)</enum><header>Mirror code tax system</header><text>For purposes of this section, the term <quote>mirror code tax system</quote> means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.</text> </paragraph><paragraph id="H9A7554454320420E98B952CB6E23BC93"><enum>(3)</enum><header>Treatment of payments</header><text>For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this section shall be treated in the same manner as a refund due from the credit allowed under <external-xref legal-doc="usc" parsable-cite="usc/26/24">section 24</external-xref> of the Internal Revenue Code of 1986.</text> </paragraph></subsection></section><enum>III</enum><header>Dependent Care Assistance</header> <section id="H5DFDC4BC03084E9D9F002464ED2AA9E9"><enum>301.</enum><header>Refundability and enhancement of child and dependent care tax credit</header> <subsection id="H16D50F3A5AFA4FEE92CD78543EEB7AC9"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/21">Section 21</external-xref> is amended by adding at the end the following new subsection:</text> <quoted-block display-inline="no-display-inline" id="HD81008B6A5D14CED8CD0FDF189A1BBF0" style="OLC"> <subsection id="HB64742E654F14B46937E5512033F12F3"><enum>(g)</enum><header>Special rules for 2019 and 2020</header><text display-inline="yes-display-inline">In the case of any taxable year beginning in 2019 or 2020—</text> <paragraph id="H4A7FAA4024A64EDD8877FC4C65E86004"><enum>(1)</enum><header>Credit made refundable</header><text display-inline="yes-display-inline">In the case of an individual other than a nonresident alien, the credit allowed under subsection (a) shall be treated as a credit allowed under subpart C (and not allowed under this subpart).</text> </paragraph><paragraph id="HBC96BA9D27F74617A9A83F5D3F51C715"><enum>(2)</enum><header>Increase in applicable percentage</header><text display-inline="yes-display-inline">Subsection (a)(2) shall be applied—</text> <subparagraph id="H1D60EF82704A42BD955AAAE2A4176BA3"><enum>(A)</enum><text>by substituting <quote>50 percent</quote> for <quote>35 percent</quote>, and</text> </subparagraph><subparagraph id="HB8C80422A81442198DF846ACF91B8944"><enum>(B)</enum><text>by substituting <quote>$120,000</quote> for <quote>$15,000</quote>.</text> </subparagraph></paragraph><paragraph id="H0112CC49254B4EC993505C4D826E9DF6"><enum>(3)</enum><header>Increase in dollar limit on amount creditable</header><text>Subsection (c) shall be applied—</text> <subparagraph id="HFA83623C7A9640AFB07F98C7F470415E"><enum>(A)</enum><text>by substituting <quote>$6,000</quote> for <quote>$3,000</quote> in paragraph (1) thereof, and</text> </subparagraph><subparagraph id="H5F48796C408D49FA87BDC7A57CE1E90B"><enum>(B)</enum><text>by substituting <quote>twice the amount in effect under paragraph (1)</quote> for <quote>$6,000</quote> in paragraph (2) thereof.</text> </subparagraph></paragraph><paragraph commented="no" id="HB0B10E91FDBC4EEE9C84D61C3A941ADC"><enum>(4)</enum><header>Inflation adjustment of dollar amounts</header><text display-inline="yes-display-inline">In the case of any taxable year beginning after 2019, the $120,000 amount in paragraph (2)(B) and the $6,000 amount in paragraph (3)(A) shall each be increased by an amount equal to—</text> <subparagraph commented="no" id="HAF37407FBBF345F7901B759546C06662"><enum>(A)</enum><text>such dollar amount, multiplied by</text> </subparagraph><subparagraph commented="no" id="HBE8B90403DCF41009E75ED23DC0AB38F"><enum>(B)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting <quote>2018</quote> for <quote>2016</quote> in subparagraph (A)(ii) thereof.</text> </subparagraph><continuation-text commented="no" continuation-text-level="paragraph">If any increase determined under this paragraph is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100.</continuation-text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H94ED7EE2B29F47EEB487660BE6AD4B69"><enum>(b)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">Section 1324(b)(2) of title 31, United States Code, is amended by inserting <quote>21 (by reason of subsection (g) thereof),</quote> before <quote>25A</quote>.</text> </subsection><subsection id="H6076451B0A6B48D2A8B3ACFC225D7DA4"><enum>(c)</enum><header>Coordination with possession tax systems</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/21">Section 21(g)(1)</external-xref> of the Internal Revenue Code of 1986 (as added by this section) shall not apply to any person—</text> <paragraph id="HD84C6229AF0D4EB5AB19813352498514"><enum>(1)</enum><text>to whom a credit is allowed against taxes imposed by a possession with a mirror code tax system by reason of the application of section 21 of such Code in such possession for such taxable year; or</text> </paragraph><paragraph id="HC118E3EB03C640F6A333B536DADAE0B1"><enum>(2)</enum><text>to whom a credit would be allowed against taxes imposed by a possession which does not have a mirror code tax system if the provisions of section 21 of such Code had been in effect in such possession for such taxable year.</text> </paragraph></subsection><subsection id="H210124F2893248969F806BC448343451"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2018.</text> </subsection></section><section commented="no" display-inline="no-display-inline" id="H9321301A1DB04107A78544105CE985D8" section-type="subsequent-section"><enum>302.</enum><header display-inline="yes-display-inline">Increase in exclusion for employer-provided dependent care assistance</header> <subsection commented="no" display-inline="no-display-inline" id="HC3EFD85E1DD04AF89F6CDBE069E717ED"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/129">Section 129(a)(2)</external-xref> is amended by adding at the end the following new subparagraph:</text> <quoted-block display-inline="no-display-inline" id="H1E8299932C51453596DBE0D2942A8B55" style="OLC"> <subparagraph id="HD39228838CF9478AB5A2F7E0E0FB79DE"><enum>(D)</enum><header>Special rule for 2020 and 2021</header><text display-inline="yes-display-inline">In the case of any taxable year beginning in 2020 or 2021—</text> <clause id="HD4C9901F62874F03973739335545CF87"><enum>(i)</enum><header>In general</header><text>Subparagraph (A) shall be applied be substituting <quote>$10,500 (half such dollar amount</quote> for <quote>$5,000 ($2,500</quote>.</text> </clause><clause id="H6154BA14D5F14D1F987A5180C63BE218"><enum>(ii)</enum><header>Inflation adjustment</header><text>In the case of any taxable year beginning after 2020, the $10,500 amount in clause (i) shall be increased by an amount equal to—</text> <subclause id="H02C2AA60A62D4859A6E4C244E1D8651A"><enum>(I)</enum><text>such dollar amount, multiplied by</text> </subclause><subclause id="H668D6FE9E7374A29A6FC91D109DE9035"><enum>(II)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting <quote>2019</quote> for <quote>2016</quote> in subparagraph (A)(ii) thereof.</text> </subclause><continuation-text continuation-text-level="clause">Any increase determined under the preceding sentence which is not a multiple of $50, shall be rounded to the nearest multiple of $50.</continuation-text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection commented="no" display-inline="no-display-inline" id="H1F49A89294FE4931B722BA508E4959D6"><enum>(b)</enum><header display-inline="yes-display-inline">Effective date</header><text display-inline="yes-display-inline">The amendment made by this section shall apply to taxable years beginning after December 31, 2019.</text> </subsection></section><enum>IV</enum><header>Certain Fringe Benefit Expenses</header> <section id="HDF9ACB59FA274906A6249375D75DC90D" section-type="subsequent-section"><enum>401.</enum><header>Repeal of inclusion of certain fringe benefit expenses in unrelated business taxable income</header> <subsection id="H9D2619CDDD6E4740987806B58C08608E"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/512">Section 512(a)</external-xref> is amended by striking paragraph (7).</text> </subsection><subsection id="H3036C805A1BA4237B12D1DEB9CDA1B4B"><enum>(b)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendment made by this subsection shall take effect as if included in the amendments made by section 13703 of <external-xref legal-doc="public-law" parsable-cite="pl/115/97">Public Law 115–97</external-xref>.</text> </subsection></section>