Dependent Income Exclusion Act of 2019

“(C) Exception for certain dependent income

“(i) In general—There shall not be taken into account under subparagraph (A)(ii) any wages (determined under section 3401(a)) or net earnings from self-employment (as defined in section 1402(a)) of any dependent of the taxpayer who—

“(I) has not attained age 18 as of the last day of the calendar year in which the taxable year of the taxpayer begins, or

“(II) has not attained age 24 as of the last day of such calendar year and, during each of 5 calendar months during such calendar year, is described in subparagraph (A) or (B) of section 152(f)(2) (applied by substituting “part-time or full-time” for “full-time” each place it appears, and by deeming any for-profit educational institution not to be an educational organization described in section 170(b)(1)(A)(ii)), is participating in a qualified job-training program, or is participating in an apprenticeship program registered under the Act of August 16, 1937 (commonly known as the “National Apprenticeship Act”; 50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq.).

“(ii) Qualified job-training program—For purposes of this subparagraph, the term qualified job-training program means any program of training services described in section 134(c)(3) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3174(c)(3)).

“(iii) Limitation—Clause (i) shall not apply to so much of the aggregate income of all dependents of the taxpayer as exceeds an amount equal to 15 percent of the modified adjusted gross income of the taxpayer.

“(iv) Taxpayers residing in Medicaid non-expansion States—In the case of a taxpayer residing in a State which (as of the first day of the taxable year) does not provide for eligibility under clause (i)(VIII) or (ii)(XX) of section 1902(a)(10)(A) of the Social Security Act for medical assistance under title XIX of such Act (or a waiver of the State plan approved under section 1115 of the Social Security Act), clause (i) shall apply to any dependent of such taxpayer only to the extent that the application of such clause would not reduce the household income below 100 percent of the amount equal to the poverty line for a family of the size involved.”