Hurricane Harvey and Hurricane Irma Working Family Tax Relief Act

Summary: Hurricane Harvey and Hurricane Irma Working Family Tax Relief Act  This bill amends the Internal Revenue Code to allow certain individuals affected by Hurricanes Harvey or Irma to elect to use earned income from the preceding year for the purpose of determining earned income for the earned income tax credit and the child tax credit.  The bill applies to an individual: (1) whose principal place of abode on specified dates was located in the Hurricane Harvey disaster area or the Hurricane Irma disaster area, (2) who was displaced from the place of abode due to the disaster, and (3) who performed substantially all employment services in the disaster area and was so employed on the specified date.  The Department of the Treasury must pay to each U.S. possession with a tax system that mirrors federal tax law (mirror code tax system) amounts equal to the loss to the possession due to this bill. For U.S. possessions that do not have a mirror code tax system, Treasury must pay an amount equal to the aggregate benefits that would have been provided to residents of the possession due to this bill if a mirror code tax system had been in effect. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Hurricane Harvey and Hurricane Irma 
Working Family Tax Relief Act''.

SEC. 2. DETERMINATION OF EARNED INCOME FOR PURPOSES OF THE EARNED 
              INCOME CREDIT AND THE CHILD TAX CREDIT FOR INDIVIDUALS IN 
              THE HURRICANE HARVEY AND HURRICANE IRMA DISASTER AREAS.

    (a) Earned Income Credit.--Section 32 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subsection:
    ``(n) Special Rule Relating to Hurricane Harvey and Hurricane 
Irma.--For purposes of this section and section 24(d)--
            ``(1) In general.--In the case of a qualified individual, 
        if the earned income of the taxpayer for the taxable year which 
        includes the applicable date is less than the earned income of 
        the taxpayer for the preceding taxable year, the credit allowed 
        under subsection (a) for the taxable year which includes the 
        applicable date may, at the election of the taxpayer, be 
        determined by substituting--
                    ``(A) such earned income for the preceding taxable 
                year, for
                    ``(B) such earned income for the taxable year which 
                includes the applicable date.
            ``(2) Qualified individual.--For purposes of this 
        subsection, the term `qualified individual' means any 
        individual--
                    ``(A) whose principal place of abode on the 
                applicable date was located in the Hurricane Harvey 
                disaster area or the Hurricane Irma disaster area and 
                such individual was displaced from such principal place 
                of abode by reason of the Hurricane Harvey federally 
                declared disaster or the Hurricane Irma federally 
                declared disaster, respectively, or
                    ``(B) who performed substantially all employment 
                services in the disaster area and was so employed on 
                the applicable date.
            ``(3) Other definitions.--For purposes of this subsection--
                    ``(A) Applicable date.--The term `applicable date' 
                means--
                            ``(i) August 25, 2017, with respect to 
                        Hurricane Harvey, and
                            ``(ii) September 5, 2017, with respect to 
                        Hurricane Irma.
                    ``(B) Hurricane harvey federally declared 
                disaster.--
                            ``(i) In general.--The term `Hurricane 
                        Harvey federally declared disaster' means the 
                        disaster occurring by reason of Hurricane 
                        Harvey and determined by the President to 
                        warrant individual or individual and public 
                        assistance from the Federal Government under 
                        the Robert T. Stafford Disaster Relief and 
                        Emergency Assistance Act.
                            ``(ii) Hurricane harvey disaster area.--The 
                        term `Hurricane Harvey disaster area' means the 
                        area so determined to warrant such assistance.
                    ``(C) Hurricane irma federally declared disaster.--
                            ``(i) In general.--The term `Hurricane Irma 
                        federally declared disaster' means the disaster 
                        occurring by reason of Hurricane Irma and 
                        determined by the President to warrant 
                        individual or individual and public assistance 
                        from the Federal Government under the Robert T. 
                        Stafford Disaster Relief and Emergency 
                        Assistance Act.
                            ``(ii) Hurricane irma disaster area.--The 
                        term `Hurricane Irma disaster area' means the 
                        area so determined to warrant such assistance.
            ``(4) Special rules.--
                    ``(A) Application to joint returns.--For purposes 
                of paragraph (1), in the case of a joint return for a 
                taxable year which includes the applicable date--
                            ``(i) such paragraph shall apply if either 
                        spouse is a qualified individual, and
                            ``(ii) the earned income of the taxpayer 
                        for the preceding taxable year shall be the sum 
                        of the earned income of each spouse for such 
                        preceding taxable year.
                    ``(B) Uniform application of election.--Any 
                election made under paragraph (1) shall apply with 
                respect to both this section and section 24(d).
                    ``(C) Errors treated as mathematical error.--For 
                purposes of section 6213, an incorrect use on a return 
                of earned income pursuant to paragraph (1) shall be 
                treated as a mathematical or clerical error.
                    ``(D) No effect on determination of gross income, 
                etc.--Except as otherwise provided in this subsection, 
                this title shall be applied without regard to any 
                substitution under paragraph (1).''.
    (b) Child Tax Credit.--Subsection (d) of section 24 of such Code is 
amended by adding at the end the following new paragraph:
            ``(6) Special rule relating to hurricane harvey and 
        hurricane irma.--See section 32(n) for determination of earned 
        income with respect to the Hurricane Harvey and Hurricane Irma 
        federally declared disasters.''.
    (c) Treatment of Possessions.--
            (1) Payments to possessions.--
                    (A) Mirror code possession.--The Secretary of the 
                Treasury shall pay to each possession of the United 
                States with a mirror code tax system amounts equal to 
                the loss to that possession by reason of the amendments 
                made by this section. Such amounts shall be determined 
                by the Secretary of the Treasury based on information 
                provided by the government of the respective 
                possession.
                    (B) Other possessions.--The Secretary of the 
                Treasury shall pay to each possession of the United 
                States which does not have a mirror code tax system 
                amounts estimated by the Secretary of the Treasury as 
                being equal to the aggregate benefits that would have 
                been provided to residents of such possession by reason 
                of the amendments made by this section 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 payments to the residents of such 
                possession.
            (2) Coordination with credit allowed against united states 
        income taxes.--In the case of any person--
                    (A) to whom a credit is allowed against taxes 
                imposed by a possession of the United States by reason 
                of the amendments made by this section for any taxable 
                year, or
                    (B) who is eligible for a payment under a plan 
                described in paragraph (1)(B) with respect to any 
                taxable year,
        any credit allowed under section 24 or 32 of the Internal 
        Revenue Code of 1986 to such person for such taxable year shall 
        be determined without regard to the amendments made by this 
        section.
            (3) Definitions and special rules.--
                    (A) 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 Northern Mariana Islands.
                    (B) Mirror code tax system.--For purposes of this 
                subsection, the term ``mirror code tax system'' means, 
                with respect to any possession of the United States, 
                the income tax system of such possession if the income 
                tax liability 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.
                    (C) 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 a credit allowed under 
                section 24(d) or 32 of the Internal Revenue Code of 
                1986.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after August 25, 2017.