I 

116TH CONGRESS 

1ST SESSION H. R. 4728 

To amend the Internal Revenue Code of 1986 to modify the taxation of 

unearned income of certain children. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 17, 2019 

Ms. MOORE (for herself, Mr. ESTES, Mr. CISNEROS, Mr. YOUNG, Mr. PANETTA, Mr. COLE, Mr. KILDEE, Mr. CALVERT, Ms. DAVIDS of Kansas, 

Mr. STEUBE, and Ms. HAALAND) introduced the following bill; which was 

referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

the taxation of unearned income of certain children. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Youth Tax Fairness 

5 Act of 2019’’. 

6 SEC. 2. MODIFICATION OF TAXATION OF UNEARNED IN7 COME OF CERTAIN CHILDREN. 

8 (a) CERTAIN INCOME TREATED AS EARNED INCOME

9 FOR PURPOSES OF KIDDIE TAX.—Section 1(g)(4)(C) of 


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1 the Internal Revenue Code of 1986 is amended to read 

2 as follows: 

3 ‘‘(C) TREATMENT OF CERTAIN AMOUNTS

4 AS EARNED INCOME.—For purposes of this sub5 section, each of following amounts shall be 

6 treated as earned income of the child referred 

7 to in paragraph (1) to the extent included in 

8 the gross income of such child: 

9 ‘‘(i) DISTRIBUTIONS FROM QUALIFIED

10 DISABILITY TRUSTS.—Any amount in11 cluded in the gross income of such child 

12 under section 652 or 662 by reason of 

13 being a beneficiary of a qualified disability 

14 trust (as defined in section 

15 642(b)(2)(C)(ii)). 

16 ‘‘(ii) CERTAIN MILITARY SURVIVOR

17 BENEFITS.—Any benefit under laws ad18 ministered by the Secretary of Defense or 

19 the Secretary of Veterans Affairs which is 

20 received by such child by reason of the 

21 child being the survivor of a deceased 

22 member of the Armed Forces or of a de23 ceased veteran. 

24 ‘‘(iii) CERTAIN FIRST RESPONDER

25 SURVIVOR BENEFITS.—Any payment made 


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1 by Federal, State, or local government to 

2 such child if such payment is made by rea3 son of the death of the parent of such child 

4 during such parent’s service as a law en5 forcement officer, firefighter, paramedic, or 

6 emergency medical technician. 

7 ‘‘(iv) CERTAIN INDIAN TRIBAL PAY8 MENTS.—Any payment made by an Indian 

9 tribal government (as defined in section 

10 139E(c)(1)), or from a trust of which the 

11 Indian tribal government is treated as the 

12 owner under subpart E of part I of sub13 chapter J, to such child if— 

14 ‘‘(I) such child is an enrolled 

15 member of the tribe with respect to 

16 such Indian tribal government, and 

17 ‘‘(II) such payment is received by 

18 such child by reason of such enroll19 ment. 

20 ‘‘(v) CERTAIN SCHOLARSHIPS OR FEL21 LOWSHIP GRANTS.—Any scholarship or fel22 lowship grant which is received by such 

23 child if— 

24 ‘‘(I) such child is a candidate for 

25 a degree at an educational organizaVerDate Sep 11 2014 18:16 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4728.IH H4728

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1 tion described in section 

2 170(b)(1)(A)(ii), and 

3 ‘‘(II) such scholarship or grant 

4 supports such candidacy. 

5 ‘‘(vi) ALASKA PERMANENT FUND

6 DIVIDENDS.—Any Alaska Permanent Fund 

7 dividend. 

8 ‘‘(vii) SOCIAL SECURITY BENEFITS.— 

9 Any social security benefit (as defined in 

10 section 86(d)).’’. 

11 (b) REPEAL OF TEMPORARY RULE FOR TAXATION

12 OF UNEARNED INCOME OF CERTAIN CHILDREN.—Section 

13 1(j) of such Code is amended by striking paragraph (4). 

14 (c) APPLICATION TO ALTERNATIVE MINIMUM TAX.— 

15 (1) IN GENERAL.—Section 59(j)(1)(A) of such 

16 Code is amended by inserting ‘‘and including 

17 amounts treated as earned income under section 

18 1(g)(4)(C)’’ after ‘‘section 911(d)(2)’’. 

19 (2) SUSPENSION OF KIDDIE TAX LIMITATION

20 ON ALTERNATIVE MINIMUM TAX EXEMPTION DUR21 ING PERIOD OF INCREASED EXEMPTION.—Section 

22 55(d)(4)(A) of such Code is amended by striking 

23 ‘‘and’’ at the end of clause (i)(II), by striking the 

24 period at the end of clause (ii)(III) and inserting ‘‘, 


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1 and’’, and by adding at the end the following new 

2 clause: 

3 ‘‘(iii) subsection (j) of section 59 shall 

4 not apply.’’. 

5 (d) EFFECTIVE DATES.— 

6 (1) IN GENERAL.—Except as otherwise pro7 vided in this subsection, the amendments made by 

8 this section shall apply to taxable years beginning 

9 after December 31, 2017. 

10 (2) REPEAL OF TEMPORARY RULE FOR TAX11 ATION OF UNEARNED INCOME OF CERTAIN CHIL12 DREN.— 

13 (A) IN GENERAL.—Except as provided in 

14 subparagraph (B), the amendment made by 

15 subsection (b) shall apply to taxable years be16 ginning after December 31, 2018. 

17 (B) ELECTIVE RETROACTIVE APPLICA18 TION.—In the case of a taxpayer who elects the 

19 application of this subparagraph (at such time 

20 and in such manner as the Secretary of the 

21 Treasury (or the Secretary’s designee) may pro22 vide), the amendment made by subsection (b) 

23 shall apply to taxable years beginning after De24 cember 31, 2017. 

Æ 


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