H.R. 6760 — what changed

“(A) by increasing the minimum and maximum dollar amounts for each bracket for which a tax is imposed under such table by the cost-of-living adjustment for such calendar year, determined under this subsection for such calendar year by substituting ‘2017’ for ‘2016’ in paragraph (3)(A)(ii),”

“(B) Special rule—In the case of a table prescribed in lieu of the table contained in subsection (b), (c), or (d), subparagraph (A)”

“(g) Special rules for certain children with unearned income

“(1) In general—In the case of any child to whom this subsection applies—

“(A) Modifications to applicable rate brackets—In determining the amount of tax imposed by this section for the taxable year on such child, the income tax table otherwise applicable under this section to such child shall be applied with the following modifications:

“(i) 24-percent bracket—The maximum taxable income which is taxed at a rate below 24 percent shall not be more than the sum of—

“(I) the earned taxable income of such child, plus

“(II) the minimum taxable income for the 24-percent bracket in the table under subsection (e) (as adjusted under subsection (f)) for the taxable year.

“(ii) 35-percent bracket—The maximum taxable income which is taxed at a rate below 35 percent shall not be more than the sum of—

“(I) the earned taxable income of such child, plus

“(II) the minimum taxable income for the 35-percent bracket in the table under subsection (e) (as adjusted under subsection (f)) for the taxable year.

“(iii) 37-percent bracket—The maximum taxable income which is taxed at a rate below 37 percent shall not be more than the sum of—

“(I) the earned taxable income of such child, plus

“(II) the minimum taxable income for the 37-percent bracket in the table under subsection (e) (as adjusted under subsection (f)) for the taxable year.

“(B) Coordination with capital gains rates—For purposes of applying section 1(h)—

“(i) the maximum zero rate amount shall not be more than the sum of—

“(I) the earned taxable income of such child, plus

“(II) the amount in effect under subsection (h)(13) for the taxable year, and

“(ii) the maximum 15-percent rate amount shall not be more than the sum of—

“(I) the earned taxable income of such child, plus

“(II) the amount in effect under subsection (h)(12)(D) for the taxable year.”

changed “(3) Earned taxable income—For purposes of this subsection, the term earned “earned taxable income income” means, with respect to any child for any taxable year, the taxable income of such child reduced (but not below zero) by the net unearned income of such child.”

added “(5) Special rules for determining parent eligible to make election—For purposes of paragraph (7), the parent referred to in subparagraph (A)(iv) thereof is—”

“(12) Maximum 15-percent rate amount defined—For purposes of this subsection, the maximum 15-percent rate amount shall be—

“(A) in the case of a joint return or surviving spouse (as defined in section 2(a)), $479,000 (½ such amount in the case of a married individual filing a separate return),

“(B) in the case of an individual who is the head of a household (as defined in section 2(b)), $452,400,

“(C) in the case of any other individual (other than an estate or trust), $425,800, and

“(D) in the case of an estate or trust, $12,700.

“(13) Determination of 0 percent rate bracket for estates and trusts—In the case of any estate or trust, paragraph (1)(B) shall be applied by treating the amount determined in clause (i) thereof as being equal to $2,600.

“(14) Inflation adjustment

“(A) In general—In the case of any taxable year beginning after 2018, each of the dollar amounts in paragraphs (12) and (13) shall be increased by an amount equal to—

“(i) such dollar amount, multiplied by

“(ii) the cost-of-living adjustment determined under subsection (f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2017” for “calendar year 2016” in subparagraph (A)(ii) thereof.

“(B) Rounding—If any increase under subparagraph (A) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.”

“(4) Adjustments for inflation

“(A) In general—In the case of a taxable year beginning after 2018, each dollar amount in paragraph (2)(B), (2)(C), or (5) or subsection (f) shall be increased by an amount equal to—

“(i) such dollar amount, multiplied by

“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting for “2016” in subparagraph (A)(ii) thereof—

“(I) in the case of the dollar amounts contained in paragraph (2)(B) or (2)(C), “2017”,

“(II) in the case of the dollar amounts contained in paragraph (5)(A) or subsection (f), “1987”, and

“(III) in the case of the dollar amount contained in paragraph (5)(B), “1997”.

“(B) Rounding—If any increase under subparagraph (A) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.”

“(a) Allowance of credit—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of—

“(1) $2,000 for each qualifying child of the taxpayer, and

“(2) $500 for each qualifying dependent (other than a qualifying child) of the taxpayer.

changed “(b) Limitation based on adjusted gross income—The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds $400,000 in the case of a joint return ($200,000 in any other case). For purposes of the preceding sentence, the term modified “modified adjusted gross income income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.

“(c) Qualifying child; qualifying dependent—For purposes of this section—

changed “(1) Qualifying child—The term qualifying child “qualifying child” means any qualifying dependent of the taxpayer—

“(A) who is a qualifying child (as defined in section 7706(c)) of the taxpayer,

“(B) who has not attained age 17 at the close of the calendar year in which the taxable year of the taxpayer begins, and

“(C) whose name and social security number are included on the taxpayer’s return of tax for the taxable year.

changed “(2) Qualifying dependent—The term qualifying dependent “qualifying dependent” means any dependent of the taxpayer (as defined in section 7706 without regard to all that follows resident “resident of the United States States” in section 7706(b)(3)(A)) whose name and TIN are included on the taxpayer’s return of tax for the taxable year.

“(3) Social security number defined—For purposes of this subsection, the term social security number means, with respect to a return of tax, a social security number issued to an individual by the Social Security Administration, but only if the social security number is issued—

“(A) to a citizen of the United States or pursuant to subclause (I) (or that portion of subclause (III) that relates to subclause (I)) of section 205(c)(2)(B)(i) of the Social Security Act, and

“(B) on or before the due date of filing such return.”

“(A) the credit which would be allowed under this section determined—

“(i) by substituting “$1,400” for “$2,000” in subsection (a)(1),

“(ii) without regard to subsection (a)(2), and

“(iii) without regard to this subsection and the limitation under section 26(a), or”

“(4) Adjustment for inflation

“(A) In general—In the case of a taxable year beginning after 2018, the $1,400 amount in paragraph (1)(A)(i) shall be increased by an amount equal to—

“(i) such dollar amount, multiplied by

“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “2017” for “2016” in subparagraph (A)(ii) thereof.

“(B) Rounding—If any increase under subparagraph (A) is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100.

“(C) Limitation—The amount of any increase under subparagraph (A) (after the application of subparagraph (B)) shall not exceed $600.”

“(e) Taxpayer identification requirement—No credit shall be allowed under this section if the identifying number of the taxpayer was issued after the due date for filing the return of tax for the taxable year.”

“(G) Cash contributions

“(i) In general—Any contribution of cash to an organization described in subparagraph (A) shall be allowed to the extent that the aggregate of such contributions does not exceed 60 percent of the taxpayer’s contribution base for the taxable year, reduced by the aggregate amount of contributions allowable under subparagraph (A) for such taxpayer for such year.

“(ii) Carryover—If the aggregate amount of contributions described in clause (i) exceeds the limitation of clause (i), such excess shall be treated (in a manner consistent with the rules of subsection (d)(1)) as a charitable contribution to which clause (i) applies in each of the 5 succeeding years in order of time.”

“(ii) the excess of—

“(I) the sum of 50 percent of the taxpayer’s contribution base for the taxable year, plus so much of the amount of charitable contributions allowable under subparagraph (G) as does not exceed 10 percent of such contribution base, over

“(II) the amount of charitable contributions allowable under subparagraphs (A) and (G) (determined without regard to subparagraph (C)).”

“(A) any area”

“(B) the Sinai Peninsula of Egypt.”

“(A) in the case of an area described in paragraph (2)(A), such service is performed”

“(B) in the case of the area described in paragraph (2)(B), such service is performed during any period with respect to which one or more members of the Armed Forces of the United States are entitled to special pay under section 310 of title 37, United States Code (relating to special pay; duty subject to hostile fire or imminent danger), for service performed in such area.”

“(1) Every individual who has gross income for the taxable year, except that a return shall not be required of—

“(A) an individual who is not married (determined by applying section 7703) and who has gross income for the taxable year which does not exceed the standard deduction applicable to such individual for such taxable year under section 63, or

“(B) an individual entitled to make a joint return if—

“(i) the gross income of such individual, when combined with the gross income of such individual’s spouse, for the taxable year does not exceed the standard deduction which would be applicable for such taxable year under section 63 if such individual and such individual’s spouse made a joint return,

“(ii) such individual’s spouse does not make a separate return, and

“(iii) neither such individual nor such individual’s spouse is an individual described in section 63(c)(4) who has income (other than earned income) in excess of the amount in effect under section 63(c)(4)(A).”

“(A) who is a dependent of either the taxpayer or the taxpayer’s spouse for the taxable year, or”

“(f) Additional standard deduction for the aged and blind

“(1) In general—For purposes of subsection (c)(1), the additional standard deduction is, with respect to a taxpayer for a taxable year, the sum of—

“(A) $600 if the taxpayer has attained age 65 before the close of such taxable year, and

“(B) $600 if the taxpayer is blind as of the close of such taxable year.

“(2) Application to married individuals

“(A) Joint returns—In the case of a joint return, paragraph (1) shall be applied separately with respect to each spouse.

“(B) Certain married individuals filing separately—In the case of a married individual filing a separate return, if—

“(i) the spouse of such individual has no gross income for the calendar year in which the taxable year of such individual begins,

“(ii) such spouse is not the dependent of another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins, and

“(iii) the TIN of such spouse is included on such individual’s return of tax for the taxable year,”

“(1) who is a dependent of such employee or of such employee’s spouse, or”

“(1) Deduction for estates and trusts—For purposes of subsection (a), the taxable income of an estate or trust shall be computed without any deduction under section 642(b).”

“(1) any deduction from gross income, or”

“(ii) in the case of an estate or trust, the deduction allowed for such year under section 642(b).”

“(iii) the number of the taxpayer’s dependents,”

“(2) Exempt amount

“(A) In general—For purposes of paragraph (1), the term exempt amount means an amount equal to—

“(i) the sum of the amount determined under subparagraph (B) and the standard deduction, divided by

“(ii) 52.

“(B) Amount determined—For purposes of subparagraph (A), the amount determined under this subparagraph is—

“(i) the dollar amount in effect under section 7706(d)(1)(B), multiplied by

“(ii) the number of the taxpayer’s dependents for the taxable year in which the levy occurs.

“(C) Verified statement—Unless the taxpayer submits to the Secretary a written and properly verified statement specifying the facts necessary to determine the proper amount under subparagraph (A), subparagraph (A) shall be applied as if the taxpayer were a married individual filing a separate return with no dependents.”

“(6) Inflation adjustment—In the case of any taxable year beginning in a calendar year beginning after 2018, the $4,150 amount in paragraph (1)(B) shall be increased by an amount equal to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under section 1(c)(2)(A) for the calendar year in which such taxable year begins, determined by substituting “calendar year 2017” for “calendar year 2016” in clause (ii) thereof.”

“(ii) Limitation—The aggregate amount treated as acquisition indebtedness for any period shall not exceed the excess (if any) of—

“(I) $750,00 ($375,000, in the case of a married individual filing a separate return), over

“(II) the sum of the aggregate outstanding pre-October 13, 1987, indebtedness (as defined in subparagraph (D)) plus the aggregate outstanding pre-December 15, 2017, indebtedness (as defined in subparagraph (C)).”

“(C) Treatment of indebtedness incurred on or before December 15, 2017

“(i) In general—In the case of any pre-December 15, 2017, indebtedness, subparagraph (B)(ii) shall not apply and the aggregate amount of such indebtedness treated as acquisition indebtedness for any period shall not exceed the excess (if any) of—

“(I) $1,000,000 ($500,000, in the case of a married individual filing a separate return), over

“(II) the aggregate outstanding pre-October 13, 1987, indebtedness (as defined in subparagraph (D)).

“(ii) Pre-December 15, 2017, indebtedness—For purposes of this subparagraph—

“(I) In general—The term pre-December 15, 2017, indebtedness means indebtedness (other than pre-October 13, 1987, indebtedness) incurred on or before December 15, 2017.

“(II) Binding written contract exception—In the case of a taxpayer who enters into a written binding contract before December 15, 2017, to close on the purchase of a principal residence before January 1, 2018, and who purchases such residence before April 1, 2018, the term pre-December 15, 2017, indebtedness shall include indebtedness secured by such residence.

“(iii) Refinancing indebtedness

“(I) In general—In the case of any indebtedness which is incurred to refinance indebtedness, such refinanced indebtedness shall be treated for purposes of this subparagraph as incurred on the date that the original indebtedness was incurred to the extent the amount of the indebtedness resulting from such refinancing does not exceed the amount of the refinanced indebtedness.

changed “(II) Limitation on period of refinancing—Subclause (I) shall not apply to any indebtedness after the expiration of the term of the original indebtedness or, if the principal of such original indebtedness is not amortized over its term, the expiration of the term of the first 1st refinancing of such indebtedness (or if earlier, the date which is 30 years after the date of such first 1st refinancing).”

“(a) In general—In the case of an individual, miscellaneous itemized deductions shall not be allowed.”

“(d) Computation of adjusted gross income—For purposes of this title, the adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual, except that—

“(1) the deductions for costs which are paid or incurred in connection with the administration of the estate or trust and which would not have been incurred if the property were not held in such trust or estate, and

“(2) the deductions allowable under sections 642(b), 651, and 661,”

added “(A) Certain taxes—No deduction (other than a deduction allowable in computing adjusted gross income) shall be allowed for any taxes described in paragraph (1), (2), or (3) of section 164(a) or clause (ii) of section 164(b)(5)(A).”

“(E) Section 642(c) shall not apply.”

changed “(iii) Applicable amount defined—For purposes of clause (ii), the term applicable amount “applicable amount” means—

“(I) $300,000 in the case of a joint return or a surviving spouse,

“(II) $275,000 in the case of a head of household,

“(III) $250,000 in the case of an individual who is not married and who is not a surviving spouse or head of household, and

“(IV) ½ the amount applicable under subclause (I) in the case of a married individual filing a separate return.”

“(2) Qualified military individual—For purposes of this subsection, the term qualified military individual means a member of the Armed Forces of the United States on active duty who moves pursuant to a military order and incident to a permanent change of station.”

“(a) Deduction allowed—There shall be allowed as a deduction moving expenses paid or incurred during the taxable year by a member of the Armed Forces of the United States on active duty who moves pursuant to a military order and incident to a permanent change of station.”

changed “(e) Expenses furnished in-Kind—Any in kind—Any moving and storage expenses which are furnished in-kind in kind (or for which reimbursement or an allowance is provided, but only to the extent of the expenses paid or incurred)—

“(1) to such member, his spouse, or his dependents, shall not be includible in gross income, and no reporting with respect to such expenses shall be required by the Secretary of Defense or the Secretary of Transportation, as the case may be, and

“(2) to such member’s spouse and his dependents with regard to moving to a location other than the one to which such member moves (or from a location other than the one from which such member moves), this section shall apply with respect to the moving expenses of his spouse and dependents as if his spouse commenced work as an employee at a new principal place of work at such location.”

changed “(g) Modifications to gift tax payable To to reflect different tax rates—For purposes of applying subsection (b)(2) with respect to 1 or more gifts, the rates of tax under subsection (c) in effect at the decedent’s death shall, in lieu of the rates of tax in effect at the time of such gifts, be used both to compute—

“(1) the tax imposed by chapter 12 with respect to such gifts, and

“(2) the credit allowed against such tax under section 2505, including in computing—

“(A) the applicable credit amount under section 2505(a)(1), and

“(B) the sum of the amounts allowed as a credit for all preceding periods under section 2505(a)(2).”

“(B) 50 percent of the dollar amount applicable under subparagraph (A) in the case of a taxpayer described in paragraph (1)(B) or (1)(C), and

“(C) $75,000 in the case of a taxpayer described in paragraph (1)(D).”

“(3) Inflation adjustment—In the case of any taxable year beginning in a calendar year after 2018, each dollar amount described in clause (i) or (ii) of subparagraph (B) shall be increased by an amount equal to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting—

“(i) in the case of a dollar amount contained in paragraph (1)(D) or (2)(C) or in subsection (b)(1)(A), “calendar year 2011” for “calendar year 2016” in subparagraph (A)(ii) thereof, and

“(ii) in the case of a dollar amount contained in paragraph (1)(A), (1)(B), or (2)(A), “calendar year 2017” for “calendar year 2016” in subparagraph (A)(ii) thereof.”