1. Short title
This Act may be cited as the “Reinvestment to Ensure a Livable Income for Every Family Act of 2020” or the “RELIEF Act of 2020”.
Reinvestment to Ensure a Livable Income for Every Family Act of 2020
A BILL
To provide economic stimulus through advanced refundable tax credits to all individuals during the COVID–19 crisis, and for other purposes.
2. Sense of Congress
It is the sense of Congress that—
COVID–19 has contributed to major disruptions to the United States society and economy, putting the health and financial well-being of many Americans at risk;
direct economic stimulus such as advanced refundable tax credits, referred to as universal emergency rebates in this Act, can help bring much needed relief to people who need short-term payments now in order to get by during this crisis;
these direct payments should supplement the immediate, substantial expansion of existing social insurance programs including but not limited to unemployment insurance, supplemental nutrition assistance program, Medicaid, as well as relief for small businesses and other emergency economic measures;
as soon as possible and not later than two weeks after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Commissioner of the Social Security Administration and the Commissioner of the Internal Revenue Service, must establish a program for sending direct emergency rebates, in the form of electronic and paper payments, on a monthly basis, for every individual residing in the United States and its territories;
every qualifying adult over the age of 18 would receive $1,000 and every qualifying dependent child under the age of 18 would receive $500;
only the top 1 percent of income earners would have post taxes on these benefits in the next filing season and the rest of Americans would not face any tax penalties or extra costs, and so would be held harmless for any overpayments or other delivery errors; and
these advanced refundable tax credits would be transferred every month until the COVID–19 pandemic is formally declared and certified as ended from the Secretary of the Treasury and the Secretary of Health and Human Services.
3. Establishment of 2020 universal emergency rebates for individuals
In general— Section 6429 of the Internal Revenue Code of 1986 is amended to read as follows:
“6429. 2020 Universal Rebates for Individuals
“(a) In general—In the case of an eligible taxpayer, there shall be allowed as a credit against tax imposed by subtitle A for the first taxable year beginning in 2020 an amount equal to the lesser of—
“(1) net income tax liability, or
“(2) $1,000 ($2,000 in the case of a joint return).
“(b) Special rules
“(1) In general—In the case of an eligible taxpayer described in paragraph (2)—
“(A) the amount determined under subsection (a) shall not be less than $1,000 ($2,000 in the case of a joint return), and
“(B) the amount determined under subsection (a) (after application of subparagraph (A)) shall be increased by the product of $500 multiplied by the number of qualifying children (within the meaning of section 24(c)) of the taxpayer.
“(2) Eligible taxpayer described—A taxpayer is described in this paragraph if the taxpayer—
“(A) is at least 18 years of age as of December 31, 2020,
“(B) is a resident of the United States, or
“(C) is not a dependent of another taxpayer.
“(c) Treatment of credit—The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1.
“(d) Coordination with advance refunds of credit
“(1) In general—The amount of credit which would (but for this paragraph) be allowable under this section shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer under subsection (g). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1). Taxpayers would be held harmless.
“(2) Joint returns—In the case of a refund or credit made or allowed under subsection (g) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return.
“(e) Advance refunds and credits
“(1) In general—Each individual who was an eligible individual for such individual’s first taxable year beginning in 2019 shall be treated as having made a payment against the tax imposed by chapter 1 for such first taxable year in an amount equal to the advance refund amount for such taxable year.
“(2) Advance refund amount—For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such first taxable year if this section (other than subsection (f) and this subsection) had applied to such taxable year.
“(3) Timing of payments—The Secretary shall, subject to the provisions of this title, refund or credit any overpayment attributable to this section as rapidly as possible on a monthly basis and a pro rata amount for partial universal emergency rebate period in the first month of the implementation of this Act. No refund or credit shall be made or allowed under this subsection after the COVID–19 outbreak is over, as declared by the Secretary of the Treasury and the Secretary of Health and Human Services lifting designations of national economic turmoil and public health emergency, respectively.
“(4) Pro rata amounts—The pro rata amount for each partial universal emergency rebate period shall be calculated by multiplying the monthly amount for a full universal emergency rebate that would be paid to the beneficiary based on household size for such a period by the percentage calculated by dividing the number of days of the partial universal emergency rebate period by the number of days of the month.
“(5) Congressional extension of payments—The last cycle of payments will come up in the following quarter after the COVID–19 pandemic is certified to be over by the Secretary of the Treasury and the Secretary of Health and Human Services. Congress will have until such quarter is done to reexamine and decide if there is still further economic need to extend these payments.
“(6) No interest—No interest shall be allowed on any overpayment attributable to this section.”
Treatment of possessions—
Payment to possessions—
Mirror code possession— The Secretary of Treasury shall make a payment to each possession of the United States with a mirror code tax system in an amount equal to the loss to that possession. Such amount shall be determined by the information provided by the Government of the respective possession.
Other possessions— The Secretary of Treasury shall make a payment to each possession of the United States which does not have a mirror code tax system in an amount estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payment to the residents of such possession.
Coordination with credit allowed against United States income taxes— No credit shall be allowed against United States income taxes under section 6428 of the Internal Revenue Code of 1986 (as amended by this section) to any person—
to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section; or
who is eligible for payment under a plan described in paragraph (1)(B).
Definitions and special rules—
Possession of the United States— For purposes of this subsection, the term “possession of the United States” includes the Commonwealth of Puerto Rico and the Commonwealth of the North Mariana Islands.
Mirror code tax system— For purposes of this subsection, the term “mirror code system” means, with respect to any possession in the United States, the income tax system of such possession if the income tax lability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
Treatment of payments— For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from the credit allowed under section 6428 of the Internal Revenue Code of 1986 (as amended by this section).
Refunds disregarded in the administration of Federal programs and federally assisted programs— Any credit or refund allowed or made to any individual by reason of section 6248 of the Internal Revenue Code of 1986 (as amended by this section) or by reason of subsection (c) of this section shall not be taken into account as resources for the enacted month and the following months until funds are formally halted by decree from the Departments of the Treasury and the Health and Human Services, for purposes of determining eligibility of such individual or any other individual for benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.
Appropriations To carry out rebates—
In general— Immediately upon the enactment of this Act, the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2020.
Department of the Treasury—
For an additional amount for “Department of the Treasury—Financial Management Service—Salaries and Expenses”, $76,370,000, to remain available until September 30, 2021.
For an additional amount for “Department of the Treasury—Internal Revenue Service—Operations Support”, $180,185,000, to remain available until September 30, 2021.
For an additional amount for “Department of the Treasury—Internal Revenue Service—Taxpayer Services”, $65,300,000, to remain available until September 30, 2021.
Social Security Administration— For an additional amount for “Social Security Administration—Limitation on Administrative Expenses”, $39,000,000, to remain available until September 30, 2021.
Reports— No later than 15 days after enactment of this Act, the Secretary of the Treasury shall submit a plan to the Committees on Appropriations of the House of Representatives and the Senate detailing the expected use of the funds provided by paragraph (1)(A). Beginning 90 days after enactment of this Act, the Secretary of the Treasury shall submit a quarterly report to the Committees on Appropriations of the House of Representatives and the Senate detailing the actual expenditure of funds provided in paragraph (1)(A) and the expected expenditure of such funds in the subsequent quarter.
4. Additional application processes
The Secretary of the Treasury shall establish an expedited process by which individuals may provide necessary information to apply for and streamline access to temporary payments for universal emergency rebates outside the annual tax return process utilizing—
information from the beneficiary’s most recent tax return if the beneficiary has filed previously and such return is for 2018 or 2019; and
any additional or alternative information submission deemed necessary by the Secretary of the Treasury to facilitate application and prompt delivery of the universal emergency rebates.
5. Treatment of universal emergency rebates for income tax purposes
Notwithstanding any other provision of law, no amount received as a universal emergency rebate shall be treated as income for the purpose of calculating Federal, State, or local tax liability.
6. Post-taxes on high-income earners
In general— There is hereby imposed a tax on 2020 Universal Emergency Rebates for top income earners for tax year 2020 equal to 100 percent of the applicable amount.
Applicable amount— The term “applicable amount” shall be lesser of—
the amount paid to a taxpayer under section 3; or
5 percent of the amount by which the taxpayer’s adjusted gross income exceeds the threshold amount.
Threshold amount— The term “threshold amount” shall be—
$500,000 in the case of a taxpayer making a joint return under section 6103 or a surviving spouse (as defined in section 2(a)); or
$250,000 in the case of a married taxpayer (as defined in section 7703) filing a separate return ½ the dollar amount under (a).
Tax mechanism— The Secretary of the Treasury, in consultation with the Commissioner of the Internal Revenue Service, shall establish a system to record, collect, and notify top 1-percent income earners of taxes needing to be paid on their emergency rebates.
7. Reports regarding long-term economic resiliency tools
Not later than 365 days after the date of enactment of this Act, and annually thereafter, the Director of the Congressional Budget Office, in consultation with the Secretary of Treasury and Chair of the Federal Reserve, shall submit to Congress a report on how the United States Government could establish and implement alternative fiscal stimulus and economic stabilization policies, such as guaranteed income, to improve readiness for future extreme downturn caused by depressions, pandemics, and climate change catastrophes.