Section 1 Short title
This Act may be cited as the “Tax Equity and Prosperity for Puerto Rican Families Act of 2017”.
Tax Equity and Prosperity for Puerto Rican Families Act of 2017
A BILL
To amend the Internal Revenue Code of 1986 to make residents of Puerto Rico eligible for the earned income tax credit and to provide for equitable treatment for residents of Puerto Rico with respect to the refundable portion of the child tax credit.
Sec. 2 Puerto Rico residents eligible for earned income tax credit
In general— Section 32 of the Internal Revenue Code of 1986 (relating to earned income) is amended by adding at the end the following new subsection:
“(n) Residents of Puerto Rico
“(1) In general—In the case of residents of Puerto Rico—
“(A) the United States shall be treated as including Puerto Rico for purposes of subsections (c)(1)(A)(ii)(I) and (c)(3)(C),
“(B) subsection (c)(1)(D) shall not apply to nonresident alien individuals who are residents of Puerto Rico,
“(C) adjusted gross income and gross income shall be computed without regard to section 933 for purposes of subsections (a)(2)(B) and (c)(2)(A)(i),
“(D) subsection (c)(1)(A)(ii)(II) shall be applied by substituting “age 21” for “age 25”, and
“(E) notwithstanding subsection (b)—
“(i) the credit percentage is 40,
“(ii) the phaseout percentage is 21.06,
“(iii) the earned income amount is $8,890, and
“(iv) the phaseout amount is $11,610 (increased by $3,000 in the case of a joint return).
“(2) Inflation adjustment—Subsection (j) shall apply to the dollar amounts in subparagraph (D), determined by treating the $8,890 and $11,610 amounts as though such amounts were contained in subsection (b)(2)(A) and by treating the $3,000 amount as though such amount were contained in subsection (b)(2)(B)(iii).”
Child tax credit not reduced— Subclause (II) of section 24(d)(1)(B)(ii) of such Code (relating to child tax credit) is amended by inserting before the period “(determined without regard to section 32(n) in the case of residents of Puerto Rico)”.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2016.
Sec. 3 Equitable treatment for residents of Puerto Rico with respect to the refundable portion of the child tax credit
In general— Section 24(d)(1) of the Internal Revenue Code of 1986 is amended by inserting “or section 933” after “section 112”.
Effective date— The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2016.