Earned Income Tax Credit Improvement and Simplification Act 2015

Summary: Earned Income Tax Credit Improvement and Simplification Act 2015  Amends the Internal Revenue Code, with respect to the earned income tax credit, to: (1) make permanent the increase in the rate of such credit for taxpayers with three or more qualifying children and the reduction in the amount of the marriage penalty for such credit; (2) allow such credit for an individual with no qualifying children who has attained the age of 21 but not 25 and is not a full-time student, and whose qualifying children do not have valid social security numbers; (3) revise eligibility rules relating to married individuals living apart and qualifying children claimed by another family member; and (4) repeal the denial of such credit for taxpayers with excess investment income. 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Earned Income Tax 
Credit Improvement and Simplification Act 2015''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Certain improvements in the earned income tax credit made 
                            permanent.
Sec. 3. Strengthening the earned income tax credit for individuals with 
                            no qualifying children.
Sec. 4. Taxpayer eligible for credit for individuals with no qualifying 
                            children if qualifying children do not have 
                            valid Social Security numbers.
Sec. 5. Credit allowed in case of certain separated spouses.
Sec. 6. Taxpayer eligible for credit without qualifying child if 
                            qualifying child claimed by another member 
                            of family.
Sec. 7. Elimination of disqualified investment income test.

SEC. 2. CERTAIN IMPROVEMENTS IN THE EARNED INCOME TAX CREDIT MADE 
              PERMANENT.

    (a) Increase in Credit Percentage for Three or More Qualifying 
Children Made Permanent.--Section 32(b)(1) of the Internal Revenue Code 
of 1986 is amended to read as follows:
            ``(1) Percentages.--The credit percentage and the phaseout 
        percentage shall be determined in accordance with the following 
        table:


------------------------------------------------------------------------
    ``In the case of  an eligible         The credit       The phaseout
           individual with:             percentage is:    percentage is:
------------------------------------------------------------------------
1 qualifying child...................               34             15.98
2 qualifying children................               40             21.06
3 or more qualifying children........               45             21.06
No qualifying children...............             7.65           7.65''.
------------------------------------------------------------------------

    (b) Reduction of Marriage Penalty Made Permanent.--
            (1) In general.--Section 32(b)(2)(B) of such Code is 
        amended to read as follows:
                    ``(B) Joint returns.--
                            ``(i) In general.--In the case of a joint 
                        return filed by an eligible individual and such 
                        individual's spouse, the phaseout amount 
                        determined under subparagraph (A) shall be 
                        increased by $5,000.
                            ``(ii) Inflation adjustment.--In the case 
                        of any taxable year beginning after 2014, the 
                        $5,000 amount in clause (i) shall be increased 
                        by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost of living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                the taxable year begins determined by 
                                substituting `calendar year 2009' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                            ``(iii) Rounding.--Subparagraph (A) of 
                        subsection (j)(2) shall apply after taking into 
                        account any increase under clause (ii).''.
    (c) Conforming Amendment.--Section 32(b) of such Code is amended by 
striking paragraph (3).
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. STRENGTHENING THE EARNED INCOME TAX CREDIT FOR INDIVIDUALS WITH 
              NO QUALIFYING CHILDREN.

    (a) Credit for Certain Individuals Over Age 21.--
            (1) In general.--Section 32(c)(1) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        subparagraph:
                    ``(G) Special rule for working individuals over age 
                20 and without qualifying child.--
                            ``(i) In general.--In the case of an 
                        individual (or, if the individual is married, 
                        either the individual or the individual's 
                        spouse) who--
                                    ``(I) has attained the age of 21 
                                but not attained age 25 before the 
                                close of the taxable year, and
                                    ``(II) is not a full-time student 
                                at any time during the taxable year,
                        paragraph (1)(A)(ii)(II) shall not apply for 
                        purposes of determining whether such individual 
                        is an eligible individual.
                            ``(ii) Student.--For purposes of this 
                        subparagraph, an individual shall be considered 
                        a full-time student if such individual is 
                        carrying more than \1/2\ the normal full-time 
                        work load for the course of study the 
                        individual is pursuing.''.
            (2) Information return matching.--Not later than 1 year 
        after the date of the enactment of this Act, the Secretary of 
        the Treasury shall develop and implement procedures for 
        checking an individual's claim for a credit under section 32 of 
        the Internal Revenue Code of 1986, by reason of subsection 
        (c)(1)(G) thereof, against any information return made with 
        respect to such individual under section 6050S (relating to 
        returns relating to higher education tuition and related 
        expenses).
    (b) Increased Credit.--
            (1) Credit percentage and phaseout percentage.--The table 
        contained in section 32(b)(1)(A) of such Code, as amended by 
        this Act, is amended by striking ``7.65'' each place it appears 
        and inserting ``15.3''.
            (2) Earned income amount and phaseout amount.--
                    (A) In general.--The table contained in section 
                32(b)(2)(A) of such Code is amended--
                            (i) by striking ``$4,220'' and inserting 
                        ``$8,820'', and
                            (ii) by striking ``$5,280'' and inserting 
                        ``$10,425''.
                    (B) Inflation adjustments.--Section 32(j)(1)(B) of 
                such Code is amended--
                            (i) by inserting ``except as provided in 
                        clause (iii)'' in clause (i) before ``in the 
                        case of amounts'',
                            (ii) by striking ``and'' at the end of 
                        clause (i), by striking the period at the end 
                        of clause (ii) and inserting ``, and'', and by 
                        adding at the end the following new clause:
                            ``(iii) in the case of the $8,820 and 
                        $10,425 amounts in subsection (b)(2)(A), by 
                        substituting `calendar year 2012' for `calendar 
                        year 1992' in subparagraph (B) of such section 
                        1.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 4. TAXPAYER ELIGIBLE FOR CREDIT FOR INDIVIDUALS WITH NO QUALIFYING 
              CHILDREN IF QUALIFYING CHILDREN DO NOT HAVE VALID SOCIAL 
              SECURITY NUMBERS.

    (a) In General.--Section 32(c)(1)(F) of the Internal Revenue Code 
of 1986 is amended to read as follows:
                    ``(F) Individuals who do not include tin, etc., of 
                any qualifying child.--In the case of any eligible 
                individual who has one or more qualifying children, 
                if--
                            ``(i) no qualifying child of such 
                        individual is taken into account under 
                        subsection (b) by reason of paragraph (3)(D), 
                        and
                            ``(ii) no child of such individual is taken 
                        into account for purposes of any other child 
                        tax benefit under this chapter,
                for purposes of the credit allowed under this section, 
                such individual may be considered an eligible 
                individual without a qualifying child.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2014.

SEC. 5. CREDIT ALLOWED IN CASE OF CERTAIN SEPARATED SPOUSES.

    (a) In General.--Section 32(d) of the Internal Revenue Code of 1986 
is amended--
            (1) by striking ``Married Individuals.--In the case of'' 
        and inserting the following: ``Married Individuals.--
            ``(1) In general.--In the case of'', and
            (2) by adding at the end the following new paragraph:
            ``(2) Special rule for separated spouse.--An individual 
        shall not be treated as married for purposes of this section if 
        such individual--
                    ``(A) is married (within the meaning of section 
                7703(a)) and files a separate return for the taxable 
                year,
                    ``(B) lives with a qualifying child of the 
                individual for more than one-half of such taxable year, 
                and
                    ``(C)(i) during the last 6 months such taxable 
                year, does not have the same principal place of abode 
                as the individual's spouse, or
                    ``(ii) has a legally binding separation agreement 
                with the individual's spouse and is not a member of the 
                same household with the individual's spouse by the end 
                of the taxable year.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 6. TAXPAYER ELIGIBLE FOR CREDIT WITHOUT QUALIFYING CHILD IF 
              QUALIFYING CHILD CLAIMED BY ANOTHER MEMBER OF FAMILY.

    (a) In General.--Section 32(c)(1) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(G) Taxpayer eligible for credit without 
                qualifying child if qualifying child claimed by another 
                member of family.--
                            ``(i) In general.--If--
                                    ``(I) an individual is claimed as a 
                                qualifying child by an eligible 
                                individual for any taxable year of such 
                                eligible individual beginning in a 
                                calendar year, and
                                    ``(II) such individual is the 
                                qualifying child of another eligible 
                                individual for any taxable year 
                                beginning in such calendar year,
                        such other eligible individual may be treated 
                        as an eligible individual without a qualifying 
                        child for purposes of this section for such 
                        taxable year.
                            ``(ii) Exception for qualifying child 
                        claimed by parent.--If an individual is claimed 
                        as a qualifying child for any taxable year by a 
                        parent of such child, clause (i) shall not 
                        apply with respect to any other custodial 
                        parent of such child.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 7. ELIMINATION OF DISQUALIFIED INVESTMENT INCOME TEST.

    (a) In General.--Section 32 of the Internal Revenue Code of 1986 is 
amended by striking subsection (i).
    (b) Conforming Amendments.--
            (1) Section 32(j)(1)(B)(i) of such Code is amended by 
        striking ``subsections (b)(2)(A) and (i)(1)'' and inserting 
        ``subsection (b)(2)(A)''.
            (2) Section 32(j)(2) of such Code is amended--
                    (A) by striking paragraph (2), and
                    (B) by striking ``Rounding.--'' and all that 
                follows through ``If any dollar amount'' and inserting 
                the following: ``Rounding.--If any dollar amount''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.