Section 1 Short title
This Act may be cited as the “Foster EITC Act of 2015”.
Foster EITC Act of 2015
A BILL
To amend the Internal Revenue Act of 1986 to strengthen the earned income tax credit and expand eligibility for childless individuals and youth formerly in foster care.
Sec. 2 Permanent extension of modifications to earned income tax credit
Increase in credit percentage for families with 3 or more children— Paragraph (1) of section 32(b) of the Internal Revenue Code of 1986 is amended—
by striking “The credit” and inserting the following:
“(A) In general—The credit”
by adding at the end the following new subparagraph:
“(B) Increased credit percentage for families with 3 or more qualifying children—In the case of an eligible individual with 3 or more qualifying children, the table in subparagraph (A) shall be applied by substituting “45” for “40” in the second column thereof.”
Joint returns—
In general— Subparagraph (B) of section 32(b)(2) of the Internal Revenue Code of 1986 is amended by striking “$3,000” and inserting “$5,000.”.
Inflation adjustments— Clause (ii) of section 32(j)(1)(B) of such Code is amended—
by striking “$3,000” and inserting “$5,000”,
by striking “subsection (b)(2)(B)(iii)” and inserting “subsection (b)(2)(B)”, and
by striking “calendar year 2007” and inserting “calendar year 2008”.
Conforming amendment— Section 32(b)of such Code is amended by striking paragraph (3).
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
Sec. 3 Strengthening the earned income tax credit
Increased credit for individuals with no qualifying children—
In general— The table in subparagraph (A) of section 32(b)(2) of the Internal Revenue Code of 1986 is amended—
by striking “$4,220” in the second column and inserting “$8,820”, and
by striking “$5,280” in the last column and inserting “$10,425”.
Inflation adjustments— Subparagraph (B) of section 32(j)(1) of the Internal Revenue Code of 1986, as amended by this Act, is amended—
in clause (i)—
by inserting “(except as provided in clause (iii))” after “(b)(2)(A)”, and
by striking “and” at the end, and
by adding at the end the following new clause:
“(iii) in the case of the $8,820 and $10,4250 amount in the table in subsection (b)(2)(A), by substituting “calendar year 2011” for “calendar year 1992” in subparagraph (B) of such section 1.”
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, as amended by this Act, is amended—
by striking “7.65” in the second column of the third row and inserting “15.3”, and
by striking “7.65” in the third column of the third row and inserting “15.3”.
Lowering eligibility age for certain childless individuals and youth formerly in foster care—
In general— Subclause (II) of section 32(c)(1)(A)(ii) of the Internal Revenue Code of 1986 is amended by striking “age 25” and inserting “age 21 (or, in the case of youth formerly in foster care, age 18)”.
Youth formerly in foster care— Subsection (c) of section 32 of such Code is amended by adding at the end the following new subparagraph:
“(G) Youth formerly in foster care—For purposes of subparagraph (A)(ii)(II), the term youth formerly in foster care means an individual who was in foster care on or after the date that such individual attained 16 years of age.”
Returns relating to youth in foster care—
In general— Subpart B of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by inserting after section 6050W the following new section:
“6050X. Returns relating to youth in foster care
“(a) Requirement of reporting
“(1) In general—Any State, local, or tribal agency responsible for reporting data to the Adoption and Foster Care Analysis and Reporting System shall make a return, at such times as the Secretary may prescribe, described in subsection (b) with respect to any individual who is in foster care within the jurisdiction of such State, locality, or tribe on or after the date that such individual attained 16 years of age.
“(2) Single return—Except as provided by the Secretary, a State, local, or tribal agency described in paragraph (1) which has made a return for an individual described in such paragraph shall not be required to make a return for such individual for any subsequent calendar year.
“(b) Form and manner of returns—A return is described in this subsection if such return—
“(1) is in such form as the Secretary may prescribe, and
“(2) contains, with respect to each individual described in subsection (a)(1)—
“(A) the name, date of birth, and TIN of such individual,
“(B) the identification number assigned to such individual for purposes of the statewide or tribal automated child welfare information system, and
“(C) such other information as the Secretary may prescribe.
“(c) Statement To Be furnished to individuals with respect to whom information is required
“(1) In general—Every person required to make a return under subsection (a) shall furnish to each person whose name is required to be set forth in such return a written statement showing—
“(A) the name and address of the person required to make such return and the phone number of the information contact for such person, and
“(B) the information required to be shown on the return with respect to such individual.
“(2) Date—The written statement required under paragraph (1) shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) is required to be made.”
Assessable penalties— Subparagraph (B) of section 6724(d)(1) of such Code is amended—
by redesignating clauses (xxiv) and (xxv) as clauses (xxv) and (xxvi), respectively, and
by inserting after clause (xxiii) the following new clause:
“(xxiv) section 6050X (relating to returns relating to youth in foster care),”
Conforming amendment— The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by adding at the end the following new item:
Effective dates— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
Sec. 4 Simplifying the earned income tax credit
Modification of abandoned spouse rule—
In general— Section 32(c)(1) of the Internal Revenue Code of 1986, as amended by this Act, is amended by adding at the end the following new paragraph:
“(H) 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)
“(I) during the last 6 months of such taxable year, does not have the same principal place of abode as the individual's spouse, or
“(II) has a legally binding separation agreement with 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,”
Conforming amendments—
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)”.
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)(H)”.
Simplification of rules regarding presence of qualifying child—
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, as amended by this Act, is amended by adding at the end the following new paragraph:
“(I) 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 custodial parent of such child who does not make such a claim of such child may be considered an eligible individual without a qualifying child for purposes of the credit allowed under this section for such taxable year.”
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.”
Effective dates— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.