Worker Relief and Credit Reform Act of 2019

“(4) Qualifying student

“(A) In general—The term “qualifying student” means, with respect to any taxable year, any individual who—

“(i) is an eligible student (as defined in section 25A(b)(3)) with respect to at least one academic period beginning during such taxable year,

“(ii) either—

“(I) qualifies for a Federal Pell Grant with respect to such academic period, or

“(II) meets the requirements of subparagraph (B) or (C) for the taxable year, and

“(iii) is not a dependent for whom a deduction is allowable under section 151 to another taxpayer for any taxable year beginning in the same calendar year as such taxable year.

“(B) Independent students—In the case of any independent student, the requirements of this subparagraph are met for such taxable year if the household income of the taxpayer is less than 300 percent of the poverty line for the size of the family involved for the taxable year.

“(C) Other students

“(i) In general—In the case of any individual who is not an independent student, the requirements of this subparagraph are met for such taxable year if the aggregate household incomes of all the individual’s specified supporters (and the taxpayer if not otherwise taken into account) for the taxable years of such supporters which end in or with the calendar year in which such individual’s taxable year begins is less than 300 percent of the poverty line for the size of the family involved (determined on a single aggregate basis) for the taxable year.

“(ii) Specified supporter—The term “specified supporter” means, with respect to any individual described in clause (i), any taxpayer with respect to whom such individual was a dependent for any taxable year ending in the 3-year period described in subparagraph (D)(i).

“(D) Independent student defined

“(i) In general—The term “independent student” means any individual if such individual was not a dependent of another taxpayer for any taxable year ending in the 3-year period which ends on the first day of the first academic period with respect to which such individual is an eligible student (as defined in section 25A(b)(3)).

“(ii) Certain academic periods disregarded—An academic period shall be disregarded under clause (i) if such academic period ends more than 2 years before the beginning of the next academic period with respect to which the individual is an eligible student (as defined in section 25A(b)(3)).

“(E) Other definitions

“(i) Household income—The term “household income” has the meaning given such term in section 36B(d)(2).

“(ii) Poverty line—The term “poverty line” has the meaning given such term in section 36B(d)(3)(A).

“(iii) Family size—The family size involved with respect to any taxpayer shall be determined under rules similar to the rules of section 36B(d)(1).”

“(3) Qualifying dependent

“(A) In general—The term “qualifying dependent” means—

“(i) a qualifying child of the taxpayer, as defined in section 152(c), determined—

“(I) by substituting “12” for “19” in paragraph (3)(A)(i) thereof, and

“(II) without regard to paragraphs (1)(D) and (3)(A)(ii) thereof and section 152(e),

“(ii) any individual who is physically or mentally incapable of caring for himself or herself (within the meaning of section 21(b)(1)) and who—

“(I) is the taxpayer’s spouse, or

“(II) is a qualifying relative of the taxpayer, as defined in section 152(d), determined without regard to paragraph (1)(B) thereof and by treating an individual as a qualifying child of the taxpayer for purposes of paragraph (1)(D) thereof only if such individual is a qualifying child of the taxpayer as determined under clause (i) of this subparagraph, or

“(iii) any qualifying relative of the taxpayer (as defined in section 152(d), determined without regard to paragraph (1)(B) thereof) who has attained age 65 as of the close of the calendar year in which the taxable year of the taxpayer begins.”

“(b) Earned income amount; phaseout amount—For purposes of this section—

“(1) Earned income amount—The term “earned income amount” means $4,000 (twice such amount in the case of a joint return).

“(2) Phaseout amount—The term “phaseout amount” means $30,000 ($50,000 in the case of a joint return).

“(3) Inflation adjustment—In the case of any taxable year beginning after 2019, the $4,000 amount in paragraph (1) and each dollar amount in paragraph (2) 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 “2018” for “2016” in subparagraph (A)(ii) thereof.”

“(g) Increased credit for certain unmarried individuals with 2 or more qualifying children

“(1) In general—In the case of a qualified individual, the amount of the credit otherwise determined under subsection (a) shall be increased by the amount of the credit determined under this section as such section was in effect for taxable years beginning in 2018 but with the modifications described in paragraph (2).

“(2) Modifications—Solely for purposes of determining the increase under paragraph (1)—

“(A) Credit percentage—The credit percentage shall be equal to—

“(i) in the case of a qualified individual with 2 qualifying children, 12.5 percent, and

“(ii) in the case of a qualified individual with 3 or more qualifying children, 18.75 percent.

“(B) Phaseout percentage—The phaseout percentage shall be equal to 5 percent.

“(C) Application of inflation adjustment—Section 32(j) as in effect for taxable years beginning in 2018 shall be applied by taking into account the taxable year for which the increase under paragraph (1) is determined.

“(3) Qualified individual—For purposes of this subsection, the term “qualified individual” means any individual who—

“(A) is not married (as determined under section 7703), and

“(B) has 2 or more qualifying children.

“(4) Qualifying child—For purposes of this subsection, the term “qualifying child” means a child described in subsection (c)(3)(A)(i) determined without regard to subclause (I) thereof.”

“7529. Advance payment of earned income credit; earned income savings accounts

“(a) In general—Not later that the date that is 2 years after the date of the enactment of this section, the Secretary shall establish a program for making direct advance monthly payments of the credit allowable under section 32 to taxpayers who elect to receive such payments.

“(b) Limitation—The aggregate monthly payments made under subsection (a) with respect to any taxpayer for any taxable year shall not exceed 75 percent of the estimated amount of the credit allowable under section 32 to such taxpayer for such taxable year.

“(c) Election—The election under subsection (a) may be made or changed for subsequent periods at any time during the taxable year. In the case of an election made after the beginning of a taxable year, the monthly advance payments shall be made for months beginning after the date that such election becomes effective and the total amount of advance payments (subject to the limitation of subsection (b)) shall be prorated among the remaining months.

“(d) Method of payment—The program established under subsection (a) shall include an option for taxpayers to elect to receive payments under such program by prepaid debit card.

“(e) Reports to taxpayers

“(1) In general—With respect to payments made under this section for any calendar year, not later than January 31 of the following calendar year, the Secretary shall issue a statement to each individual with respect to whom payments were made under this section setting forth—

“(A) the name, address, and TIN of such person,

“(B) the aggregate amount of payments made under this section with respect to such person for such calendar year,

“(C) a statement that such individual is required to file a return of tax with respect to taxable years which include any portion of such calendar year regardless of whether such individual has income tax liability with respect to such taxable years, and

“(D) such other information as the Secretary may provide.

“(2) Election to receive statement through on-line portal—A taxpayer may elect to receive the statement described in paragraph (1) through the on-line portal described in subsection (f).

“(f) Recapture of excess payments—If the aggregate payments made to any taxpayer under subsection (a) with respect to any taxable year exceed the credit allowed under section 32 (determined without regard to subsection (h) thereof) with respect to such taxpayer for such taxable year, the tax imposed by chapter 1 with respect to such taxpayer for such taxable year shall be increased by such excess.

“(g) Restriction on allowance of advance payment if excess payments not repaid—In the case of a taxpayer who fails to pay any tax liability which includes an increase determined under subsection (f) before the date on which payment of such tax is due, no payment shall be made under subsection (a) to such taxpayer during the period beginning on such date and ending with the 2-year period which begins on the date that such tax liability (and any interest or penalties in connection with such liability) has been paid in full.”

“(h) Coordination with advance payment of credit—With respect to any taxable year, the amount which would (but for this subsection) be allowed as a credit to the taxpayer under this section shall be reduced (but not below zero) by the aggregate payments made under section 7529 to such taxpayer for such taxable year.”