Section 1 Short title
This Act may be cited as the “Obamacare Marriage Penalty Elimination Act”.
Obamacare Marriage Penalty Elimination Act
A BILL
To amend the Internal Revenue Code of 1986 to eliminate the marriage penalty in, and reduce the eligibility limitation on, the tax credit for health insurance premiums.
Sec. 2 Elimination of marriage penalty in health insurance premium tax credit
In general— Section 36B(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(4) Elimination of marriage penalty—In the case of a joint return—
“(A) Credit determined separately with respect to each spouse—The credit allowed under this section shall be sum of the two credits determined under this section separately with respect to each spouse (as provided under this subparagraph).
“(B) Treatment of income of spouses
“(i) In general—Except as provided in clause (ii), each spouse shall take into account the income of such spouse for purposes of this section.
“(ii) Income split not to result in ineligibility for credit for either spouse—If—
“(I) the poverty line with respect to a spouse (determined after application of this paragraph but without regard to this clause) exceeds the income taken into account by such spouse for purposes of this section (as so determined), and
“(II) the income taken into account by the other spouse for purposes of this section (as so determined) exceeds the sum of the poverty line with respect to such other spouse (as so determined) plus the excess described in subclause (I),
“(C) Treatment of dependents
“(i) In general—Except as provided in clause (ii), dependents of the taxpayer shall be allocated between the two spouses at the election of the taxpayer. For purposes of determining the family size involved and household income with respect to each spouse, only such spouse and the dependents allocated to such spouse under this subparagraph shall be taken into account
“(ii) Limitation on taxpayer allocation—The number of dependents allocated to a spouse under clause (i) cannot exceed the number of dependents allocated to the other spouse by more than 1 dependent.
“(D) Treatment of premiums—To the extent that the amount of any monthly premium is determined separately with respect to either spouse or any dependent of the taxpayer, such premium shall be taken into account by such spouse or the spouse to which such dependent is allocated under subparagraph (C). In the case of any monthly premium which is not so separately determined, such premium may be allocated between the two spouses at the election of the taxpayer.”
Effective date— The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Sec. 3 Reduction in poverty line eligibility limitation for health insurance premium tax credit
Amendments to the Internal Revenue Code of 1986—
In general— Section 36B(c)(1)(A) of the Internal Revenue Code of 1986 is amended by striking “400 percent” and inserting “the applicable percentage”.
Applicable percentage— Section 36B(c)(1) of such Code is amended by redesignating subparagraphs (B), (C), and (D) as subparagraphs (C), (D), and (E), respectively, and by inserting after subparagraph (A) the following new subparagraph:
“(B) Applicable percentage—The term “applicable percentage” means such percentage as the Secretary, after consultation with the Secretary of Health and Human Services, determines will result in a combination of increased Federal revenues and reduced Federal outlays which is equal to the combination of reduced Federal revenues and increased Federal outlays as a result of the amendments made by section 2 of the Obamacare Marriage Penalty Elimination Act.”
Conforming amendments—
Section 36B(b)(3)(A)(i) of such Code is amended by inserting “and subsection (c)(1)(A)” after “Except as provided in clause (ii)”.
Section 36B(f)(2)(B)(i) of such Code is amended by striking “400 percent” and inserting “the applicable percentage (as defined in subsection (c)(1)(B))”.
Effective date— The amendments made by this subsection shall apply to taxable years beginning after December 31, 2015.
Amendments to the Patient Protection and Affordable Care Act—
In general— Section 1402(b)(2) of the Patient Protection and Affordable Care Act is amended by striking “400 percent” and inserting “the applicable percentage (as defined in section 36B(c)(1)(B) of the Internal Revenue Code of 1986)”.
Conforming amendments—
Section 1402(c)(1)(A) of such Act is amended by striking “The reduction” and inserting “Except as provided in subsection (b)(2), the reduction”.
Section 1402(c)(1)(B)(i) of such Act is amended by striking “The Secretary” and inserting “Except as provided in subsection (b)(2), the Secretary”.
Effective date— The amendments made by this subsection shall apply to months beginning after December 31, 2015.