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Bill
Notes

H.R. 5377 — what changed

Restoring Tax Fairness for States and Localities Act

From Introduced in House to Reported in House. 2 sections amended and 2 added between Introduced in House and Reported in House.

Sec. 3 Elimination for 2020 and 2021 of limitation on deduction of State and local taxes

(a)
In general— Section 164(b)(6)(B) of the Internal Revenue Code of 1986 is amended by inserting “in the case of a taxable year beginning before January 1, 2020, or after December 31, 2021,” before “the aggregate amount of taxes”.
(b)
Conforming amendments— Section 164(b)(6) of the Internal Revenue Code of 1986 is amended—
(1)
changed by striking “For purposes of subparagraph (B)” and inserting “For purposes of this section”;section”,
(2)
changed by striking “January 1, 2018” and inserting “January 1, 2022”;2022”,
(3)
changed by striking “December 31, 2017, shall” and inserting “December 31, 2021, shall”; 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)
changed 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 in deduction for certain expenses of elementary and secondary school teachers

(a)
changed In general—Increase— The tables contained in subparagraphs (A), (B), (C), (D), and (E) of section 1(j)(2) Section 62(a)(2)(D) of the Internal Revenue Code of 1986 are each is amended by striking “37%” “$250” and inserting “39.6%” and—“$500”.
(b)
added Conforming amendments— Section 62(d)(3) of the Internal Revenue Code of 1986 is amended—
(1)
removed in subparagraph (A)—
(A)
removed by striking “$600,00” each place such term appears and inserting “$479,000”; and
(B)
removed by striking “$161,379” and inserting “$119,029”;
(2)
removed in subparagraph (B)—
(A)
removed by striking “$500,000” each place such term appears and inserting “$452,400”; and
(B)
removed by striking “$149,298” and inserting “$132,638”;
(3)
removed in subparagraph (C)—
(A)
removed by striking “$500,000” each place such term appears and inserting “$425,800”; and
(B)
removed by striking “$150,689.50” and inserting “$124,719.50”; and
(4)
removed in subparagraph (D)—
(A)
removed by striking “$300,000” each place such term appears and inserting “$239,500”; and
(B)
removed by striking “$80,689.50” and inserting “$59,514.50”.
(b)
removed Conforming amendments—
(1)
removed Section 1(j)(4)(B)(iii) of the Internal Revenue Code of 1986 is amended—
(A)
removed in the matter preceding subclause (I), by striking “37 percent” and inserting “39.6 percent”;
(B)
removed in subclause (II), by striking “37-percent bracket” and inserting “39.6-percent bracket”; and
(C)
removed in the heading, by striking “37-percent bracket” and inserting “39.6-percent bracket”.
(1)
changed Section 1(j)(4)(C) of such Code is amended—by striking “2015” and inserting “2019”,
(A)
removed in clause (i)(II), by striking “paragraph (5)(B)(i)(IV)” and inserting “paragraph (5)(B)(iv)”; and
(B)
removed by amending clause (ii) to read as follows:

removed “(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—

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

removed “(II) the maximum dollar amount for the 35-percent rate bracket for estates and trusts.”

(2)
changed The heading of section 1(j)(5) of such Code is amended to read as follows: “Application of zero percent capital gain rate brackets”.by striking “$250” and inserting “$500”, and
(3)
changed Subparagraphs (A) in subparagraph (B), by striking “2014” and (B) of section 1(j)(5) of such Code are amended to read as follows:inserting “2018”.

removed “(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”.

removed “(B) Maximum zero rate amount defined—For purposes of subparagraph (A), the term “maximum zero rate amount” means—

removed “(i) in the case of a joint return or surviving spouse, $77,200,

removed “(ii) in the case of an individual who is a head of household (as defined in section 2(b)), $51,700,

removed “(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

removed “(iv) in the case of an estate or trust, $2,600.”

(5)
removed Section 1(j)(5)(C) of such Code is amended by striking “clauses (i) and (ii) of”.
(c)
changed Effective date— The amendments made by this subsection section shall apply to taxable years beginning after December 31, 2019.2018.
(d)
removed 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

added
(a)
added In general— Section 62(a)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

added “(F) Certain expenses of first responders—The deductions allowed by section 162 which consist of expenses, not in excess of $500, paid or incurred by a first responder—

added “(i) as tuition or fees for the participation of the first responder in professional development courses related to service as a first responder, or

added “(ii) for uniforms used by the first responder in service as a first responder.”

(b)
added First responder defined— Section 62(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

added “(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 1000 hours during such taxable year.”

(c)
added Inflation adjustment— Section 62(d)(3) of the Internal Revenue Code of 1986, as amended by section 4, is further amended by striking “the $500 amount in subsection (a)(2)(D)” and inserting “the $500 amount in each of subparagraphs (D) and (F) of subsection (a)(2)”.
(d)
added 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

added
(a)
added 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)
added in subparagraph (A)—
(A)
added by striking “$600,000” each place such term appears and inserting “$479,000”, and
(B)
added by striking “$161,379” and inserting “$119,029”,
(2)
added in subparagraph (B)—
(A)
added by striking “$500,000” each place such term appears and inserting “$452,400”, and
(B)
added by striking “$149,298” and inserting “$132,638”,
(3)
added in subparagraph (C)—
(A)
added by striking “$500,000” each place such term appears and inserting “$425,800”, and
(B)
added by striking “$150,689.50” and inserting “$124,719.50”, and
(4)
added in subparagraph (D)—
(A)
added by striking “$300,000” each place such term appears and inserting “$239,500”, and
(B)
added by striking “$80,689.50” and inserting “$59,514.50”.
(b)
added Conforming amendments—
(1)
added Section 1(j)(4)(B)(iii) of the Internal Revenue Code of 1986 is amended—
(A)
added in the matter preceding subclause (I), by striking “37 percent” and inserting “39.6 percent”,
(B)
added in subclause (II), by striking “37-percent bracket” and inserting “39.6-percent bracket”, and
(C)
added in the heading, by striking “37-percent bracket” and inserting “39.6-percent bracket”.
(2)
added Section 1(j)(4)(C) of such Code is amended—
(A)
added in clause (i)(II), by striking “paragraph (5)(B)(i)(IV)” and inserting “paragraph (5)(B)(iv)”, and
(B)
added by amending clause (ii) to read as follows:

added “(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—

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

added “(II) the maximum dollar amount for the 35-percent rate bracket for estates and trusts.”

(3)
added 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)
added Subparagraphs (A) and (B) of section 1(j)(5) of such Code are amended to read as follows:

added “(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”.

added “(B) Maximum zero rate amount defined—For purposes of subparagraph (A), the term “maximum zero rate amount” means—

added “(i) in the case of a joint return or surviving spouse, $77,200,

added “(ii) in the case of an individual who is a head of household (as defined in section 2(b)), $51,700,

added “(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

added “(iv) in the case of an estate or trust, $2,600.”

(5)
added Section 1(j)(5)(C) of such Code is amended by striking “clauses (i) and (ii) of”.
(c)
added Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2019.
(d)
added 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.