--- kind: "diff" citation: "H.R. 5377" bill: "116-hr-5377" heading: "Restoring Tax Fairness for States and Localities Act" from: "eh" from_label: "Engrossed in House" to: "ih" to_label: "Introduced in House" sections_amended: 3 sections_added: 0 sections_removed: 2 url: "https://uscodex.org/bills/116/hr/5377/changes/ih" --- # H.R. 5377 — what changed H.R. 5377, Restoring Tax Fairness for States and Localities Act — 3 sections amended and 2 removed between Engrossed in House and Introduced in House. Edits are marked `struck` and `inserted`. ## Sec. 2 Elimination for 2019 of marriage penalty in limitation on deduction of State and local taxes - (a) In general— Section 164(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: - “(7) Special rule for limitation on individual deductions for 2019—In the case of a taxable year beginning after December 31, 2018, and before January 1, 2020, if the adjusted gross income of the taxpayer for such taxable year does not exceed $100,000,000, paragraph (6) shall be applied by substituting “($20,000 in the case of a joint return)” for “($5,000 in the case of a married individual filing a separate return)”.” - (b) Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2018. ## Sec. 3 Elimination for 2020 and 2021 of limitation on deduction of State and local taxes - (a) In general— Section 164(b) 164(b)(6)(B) of the Internal Revenue Code of 1986, as amended by section 2, 1986 is further amended by adding at the end inserting “in the following new paragraph:case of a taxable year beginning before January 1, 2020, or after December 31, 2021,” before “the aggregate amount of taxes”. - “(8) Suspension of dollar limitation on State and local taxes for 2020 and 2021 - “(A) In general—In the case of any taxable year beginning in 2020 or 2021, subparagraph (B) of paragraph (6) shall not apply. - “(B) Exception for certain high-income taxpayers—Subparagraph (A) shall not apply to any taxpayer for any taxable year if the adjusted gross income of such taxpayer for such taxable year exceeds $100,000,000.” - (b) Conforming amendments— Section 164(b)(6) of the Internal Revenue Code of 1986 is amended— - (1) by striking “For purposes of subparagraph (B)” and inserting “For purposes of this section”; - (2) by striking “January 1, 2018” and inserting “January 1, 2022”; - (3) by striking “December 31, 2017, shall” and inserting “December 31, 2021, shall”; and - (4) by adding at the end the following: “For purposes of this section, in the case of State or local taxes with respect to any real or personal property paid during a taxable year beginning in 2020 or 2021, the Secretary shall prescribe rules which treat all or a portion of such taxes as paid in a taxable year or years other than the taxable year in which actually paid as necessary or appropriate to prevent the avoidance of the limitations of this subsection.”. - (c) Effective date— The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after December 31, 2019. ## Sec. 4 Increase of top marginal individual income tax rate under temporary rules - (a) Increase—In general— Section 62(a)(2)(D) The tables contained in subparagraphs (A), (B), (C), (D), and (E) of section 1(j)(2) of the Internal Revenue Code of 1986 is are each amended by striking “$250” “37%” and inserting “$1,000”.“39.6%” and— - (1) in subparagraph (A)— - (A) by striking “$600,00” each place such term appears and inserting “$479,000”; and - (B) by striking “$161,379” and inserting “$119,029”; - (2) in subparagraph (B)— - (A) by striking “$500,000” each place such term appears and inserting “$452,400”; and - (B) by striking “$149,298” and inserting “$132,638”; - (3) in subparagraph (C)— - (A) by striking “$500,000” each place such term appears and inserting “$425,800”; and - (B) by striking “$150,689.50” and inserting “$124,719.50”; and - (4) in subparagraph (D)— - (A) by striking “$300,000” each place such term appears and inserting “$239,500”; and - (B) by striking “$80,689.50” and inserting “$59,514.50”. - (b) Conforming amendments— - (1) Section 1(j)(4)(B)(iii) of the Internal Revenue Code of 1986 is amended— - (A) in the matter preceding subclause (I), by striking “37 percent” and inserting “39.6 percent”; - (B) in subclause (II), by striking “37-percent bracket” and inserting “39.6-percent bracket”; and - (C) in the heading, by striking “37-percent bracket” and inserting “39.6-percent bracket”. - (b) Conforming amendments— Section 62(d)(3) of the Internal Revenue Code of 1986 is amended— - (2) by striking “2015” and inserting “2019”;Section 1(j)(4)(C) of such Code is amended— - (A) in clause (i)(II), by striking “paragraph (5)(B)(i)(IV)” and inserting “paragraph (5)(B)(iv)”; and - (B) by amending clause (ii) to read as follows: - “(ii) the amount which would (without regard to this paragraph) be taxed at a rate below 39.6 percent shall not be more than the sum of— - “(I) the earned taxable income of such child, plus - “(II) the maximum dollar amount for the 35-percent rate bracket for estates and trusts.” - (3) by striking “$250” and inserting “$1,000”; andThe heading of section 1(j)(5) of such Code is amended to read as follows: “Application of zero percent capital gain rate brackets”. - (4) in subparagraph (B), by striking “2014” Subparagraphs (A) and inserting “2018”.(B) of section 1(j)(5) of such Code are amended to read as follows: - “(A) In general—Subsection (h)(1)(B)(i) shall be applied by substituting “below the maximum zero rate amount” for “which would (without regard to this paragraph) be taxed at a rate below 25 percent”. - “(B) Maximum zero rate amount defined—For purposes of subparagraph (A), the term “maximum zero rate amount” means— - “(i) in the case of a joint return or surviving spouse, $77,200, - “(ii) in the case of an individual who is a head of household (as defined in section 2(b)), $51,700, - “(iii) in the case of any other individual (other than an estate or trust), an amount equal to ½ of the amount in effect for the taxable year under clause (i), and - “(iv) in the case of an estate or trust, $2,600.” - (5) Section 1(j)(5)(C) of such Code is amended by striking “clauses (i) and (ii) of”. - (c) Effective date— The amendments made by this section subsection shall apply to taxable years beginning after December 31, 2018.2019. - (d) Section 15 not To apply— Section 15 of the Internal Revenue Code of 1986 shall not apply to any change in a rate of tax by reason of any amendment made by this section. ## Sec. 5 Above-the-line deduction allowed for certain expenses of first responders — removed - (a) In general— Section 62(a)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: - “(F) Certain expenses of first responders—The deductions allowed by section 162 which consist of expenses, not in excess of $1,000, paid or incurred by a first responder— - “(i) as tuition or fees for the participation of the first responder in professional development courses related to service as a first responder; or - “(ii) for uniforms used by the first responder in service as a first responder.” - (b) First responder defined— Section 62(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: - “(4) First responder—For purposes of subsection (a)(2)(F), the term “first responder” means, with respect to any taxable year, any individual who is employed as a law enforcement officer, firefighter, paramedic, or emergency medical technician for at least 1,000 hours during such taxable year.” - (c) Inflation adjustment— Section 62(d)(3) of the Internal Revenue Code of 1986, as amended by section 4, is further amended by striking “the $1,000 amount in subsection (a)(2)(D)” and inserting “the $1,000 amount in each of subparagraphs (D) and (F) of subsection (a)(2)”. - (d) Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2019. ## Sec. 6 Increase of top marginal individual income tax rate under temporary rules — removed - (a) In general— The tables contained in subparagraphs (A), (B), (C), (D), and (E) of section 1(j)(2) of the Internal Revenue Code of 1986 are each amended by striking “37%” and inserting “39.6%” and— - (1) in subparagraph (A)— - (A) by striking “$600,000” each place such term appears and inserting “$479,000”; and - (B) by striking “$161,379” and inserting “$119,029”; - (2) in subparagraph (B)— - (A) by striking “$500,000” each place such term appears and inserting “$452,400”; and - (B) by striking “$149,298” and inserting “$132,638”; - (3) in subparagraph (C)— - (A) by striking “$500,000” each place such term appears and inserting “$425,800”; and - (B) by striking “$150,689.50” and inserting “$124,719.50”; and - (4) in subparagraph (D)— - (A) by striking “$300,000” each place such term appears and inserting “$239,500”; and - (B) by striking “$80,689.50” and inserting “$59,514.50”. - (b) Conforming amendments— - (1) Section 1(j)(4)(B)(iii) of the Internal Revenue Code of 1986 is amended— - (A) in the matter preceding subclause (I), by striking “37 percent” and inserting “39.6 percent”; - (B) in subclause (II), by striking “37-percent bracket” and inserting “39.6-percent bracket”; and - (C) in the heading, by striking “37-percent bracket” and inserting “39.6-percent bracket”. - (2) Section 1(j)(4)(C) of such Code is amended— - (A) in clause (i)(II), by striking “paragraph (5)(B)(i)(IV)” and inserting “paragraph (5)(B)(iv)”; and - (B) by amending clause (ii) to read as follows: - “(ii) the amount which would (without regard to this paragraph) be taxed at a rate below 39.6 percent shall not be more than the sum of— - “(I) the earned taxable income of such child, plus - “(II) the maximum dollar amount for the 35-percent rate bracket for estates and trusts.” - (3) The heading of section 1(j)(5) of such Code is amended to read as follows: “Application of zero percent capital gain rate brackets”. - (4) Subparagraphs (A) and (B) of section 1(j)(5) of such Code are amended to read as follows: - “(A) In general—Subsection (h)(1)(B)(i) shall be applied by substituting “below the maximum zero rate amount” for “which would (without regard to this paragraph) be taxed at a rate below 25 percent”. - “(B) Maximum zero rate amount defined—For purposes of subparagraph (A), the term “maximum zero rate amount” means— - “(i) in the case of a joint return or surviving spouse, $77,200; - “(ii) in the case of an individual who is a head of household (as defined in section 2(b)), $51,700; - “(iii) in the case of any other individual (other than an estate or trust), an amount equal to ½ of the amount in effect for the taxable year under clause (i); and - “(iv) in the case of an estate or trust, $2,600.” - (5) Section 1(j)(5)(C) of such Code is amended by striking “clauses (i) and (ii) of”. - (c) Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2019. - (d) Section 15 not To apply— Section 15 of the Internal Revenue Code of 1986 shall not apply to any change in a rate of tax by reason of any amendment made by this section.