IIB 

116TH CONGRESS 

2D SESSION H. R. 5377 

IN THE SENATE OF THE UNITED STATES 

JANUARY 3, 2020 

Received; read twice and referred to the Committee on Finance 

AN ACT 

To amend the Internal Revenue Code of 1986 to modify 

the limitation on deduction of State and local taxes, 

and for other purposes. 

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

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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Restoring Tax Fair3 ness for States and Localities Act’’. 

4 SEC. 2. ELIMINATION FOR 2019 OF MARRIAGE PENALTY IN 

5 LIMITATION ON DEDUCTION OF STATE AND 

6 LOCAL TAXES. 

7 (a) IN GENERAL.—Section 164(b) of the Internal 

8 Revenue Code of 1986 is amended by adding at the end 

9 the following new paragraph: 

10 ‘‘(7) SPECIAL RULE FOR LIMITATION ON INDI11 VIDUAL DEDUCTIONS FOR 2019.—In the case of a 

12 taxable year beginning after December 31, 2018, 

13 and before January 1, 2020, if the adjusted gross 

14 income of the taxpayer for such taxable year does 

15 not exceed $100,000,000, paragraph (6) shall be ap16 plied by substituting ‘($20,000 in the case of a joint 

17 return)’ for ‘($5,000 in the case of a married indi18 vidual filing a separate return)’.’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall apply to taxable years beginning after 

21 December 31, 2018. 

22 SEC. 3. ELIMINATION FOR 2020 AND 2021 OF LIMITATION ON 

23 DEDUCTION OF STATE AND LOCAL TAXES. 

24 (a) IN GENERAL.—Section 164(b) of the Internal 

25 Revenue Code of 1986, as amended by section 2, is further 

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1 amended by adding at the end the following new para2 graph: 

3 ‘‘(8) SUSPENSION OF DOLLAR LIMITATION ON

4 STATE AND LOCAL TAXES FOR 2020 AND 2021.— 

5 ‘‘(A) IN GENERAL.—In the case of any 

6 taxable year beginning in 2020 or 2021, sub7 paragraph (B) of paragraph (6) shall not apply. 

8 ‘‘(B) EXCEPTION FOR CERTAIN HIGH-IN9 COME TAXPAYERS.—Subparagraph (A) shall 

10 not apply to any taxpayer for any taxable year 

11 if the adjusted gross income of such taxpayer 

12 for such taxable year exceeds $100,000,000.’’. 

13 (b) CONFORMING AMENDMENTS.—Section 164(b)(6) 

14 of the Internal Revenue Code of 1986 is amended— 

15 (1) by striking ‘‘For purposes of subparagraph 

16 (B)’’ and inserting ‘‘For purposes of this section’’; 

17 (2) by striking ‘‘January 1, 2018’’ and insert18 ing ‘‘January 1, 2022’’; 

19 (3) by striking ‘‘December 31, 2017, shall’’ and 

20 inserting ‘‘December 31, 2021, shall’’; and 

21 (4) by adding at the end the following: ‘‘For 

22 purposes of this section, in the case of State or local 

23 taxes with respect to any real or personal property 

24 paid during a taxable year beginning in 2020 or 

25 2021, the Secretary shall prescribe rules which treat 

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1 all or a portion of such taxes as paid in a taxable 

2 year or years other than the taxable year in which 

3 actually paid as necessary or appropriate to prevent 

4 the avoidance of the limitations of this subsection.’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxes paid or accrued in taxable 

7 years beginning after December 31, 2019. 

8 SEC. 4. INCREASE IN DEDUCTION FOR CERTAIN EXPENSES 

9 OF ELEMENTARY AND SECONDARY SCHOOL 

10 TEACHERS. 

11 (a) INCREASE.—Section 62(a)(2)(D) of the Internal 

12 Revenue Code of 1986 is amended by striking ‘‘$250’’ and 

13 inserting ‘‘$1,000’’. 

14 (b) CONFORMING AMENDMENTS.—Section 62(d)(3) 

15 of the Internal Revenue Code of 1986 is amended— 

16 (1) by striking ‘‘2015’’ and inserting ‘‘2019’’; 

17 (2) by striking ‘‘$250’’ and inserting ‘‘$1,000’’; 

18 and 

19 (3) in subparagraph (B), by striking ‘‘2014’’ 

20 and inserting ‘‘2018’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2018. 

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1 SEC. 5. ABOVE-THE-LINE DEDUCTION ALLOWED FOR CER2 TAIN EXPENSES OF FIRST RESPONDERS. 

3 (a) IN GENERAL.—Section 62(a)(2) of the Internal 

4 Revenue Code of 1986 is amended by adding at the end 

5 the following new subparagraph: 

6 ‘‘(F) CERTAIN EXPENSES OF FIRST RE7 SPONDERS.—The deductions allowed by section 

8 162 which consist of expenses, not in excess of 

9 $1,000, paid or incurred by a first responder— 

10 ‘‘(i) as tuition or fees for the partici11 pation of the first responder in profes12 sional development courses related to serv13 ice as a first responder; or 

14 ‘‘(ii) for uniforms used by the first re15 sponder in service as a first responder.’’. 

16 (b) FIRST RESPONDER DEFINED.—Section 62(d) of 

17 the Internal Revenue Code of 1986 is amended by adding 

18 at the end the following new paragraph: 

19 ‘‘(4) FIRST RESPONDER.—For purposes of sub20 section (a)(2)(F), the term ‘first responder’ means, 

21 with respect to any taxable year, any individual who 

22 is employed as a law enforcement officer, firefighter, 

23 paramedic, or emergency medical technician for at 

24 least 1,000 hours during such taxable year.’’. 

25 (c) INFLATION ADJUSTMENT.—Section 62(d)(3) of 

26 the Internal Revenue Code of 1986, as amended by section 

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1 4, is further amended by striking ‘‘the $1,000 amount in 

2 subsection (a)(2)(D)’’ and inserting ‘‘the $1,000 amount 

3 in each of subparagraphs (D) and (F) of subsection 

4 (a)(2)’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2019. 

8 SEC. 6. INCREASE OF TOP MARGINAL INDIVIDUAL INCOME 

9 TAX RATE UNDER TEMPORARY RULES. 

10 (a) IN GENERAL.—The tables contained in subpara11 graphs (A), (B), (C), (D), and (E) of section 1(j)(2) of 

12 the Internal Revenue Code of 1986 are each amended by 

13 striking ‘‘37%’’ and inserting ‘‘39.6%’’ and— 

14 (1) in subparagraph (A)— 

15 (A) by striking ‘‘$600,000’’ each place 

16 such term appears and inserting ‘‘$479,000’’; 

17 and 

18 (B) by striking ‘‘$161,379’’ and inserting 

19 ‘‘$119,029’’; 

20 (2) in subparagraph (B)— 

21 (A) by striking ‘‘$500,000’’ each place 

22 such term appears and inserting ‘‘$452,400’’; 

23 and 

24 (B) by striking ‘‘$149,298’’ and inserting 

25 ‘‘$132,638’’; 

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1 (3) in subparagraph (C)— 

2 (A) by striking ‘‘$500,000’’ each place 

3 such term appears and inserting ‘‘$425,800’’; 

4 and 

5 (B) by striking ‘‘$150,689.50’’ and insert6 ing ‘‘$124,719.50’’; and 

7 (4) in subparagraph (D)— 

8 (A) by striking ‘‘$300,000’’ each place 

9 such term appears and inserting ‘‘$239,500’’; 

10 and 

11 (B) by striking ‘‘$80,689.50’’ and insert12 ing ‘‘$59,514.50’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Section 1(j)(4)(B)(iii) of the Internal Rev15 enue Code of 1986 is amended— 

16 (A) in the matter preceding subclause (I), 

17 by striking ‘‘37 percent’’ and inserting ‘‘39.6 

18 percent’’; 

19 (B) in subclause (II), by striking ‘‘37-per20 cent bracket’’ and inserting ‘‘39.6-percent 

21 bracket’’; and 

22 (C) in the heading, by striking ‘‘37-PER23 CENT BRACKET’’ and inserting ‘‘39.6-PERCENT

24 BRACKET’’. 

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1 (2) Section 1(j)(4)(C) of such Code is amend2 ed— 

3 (A) in clause (i)(II), by striking ‘‘para4 graph (5)(B)(i)(IV)’’ and inserting ‘‘paragraph 

5 (5)(B)(iv)’’; and 

6 (B) by amending clause (ii) to read as fol7 lows: 

8 ‘‘(ii) the amount which would (without 

9 regard to this paragraph) be taxed at a 

10 rate below 39.6 percent shall not be more 

11 than the sum of— 

12 ‘‘(I) the earned taxable income of 

13 such child, plus 

14 ‘‘(II) the maximum dollar 

15 amount for the 35-percent rate brack16 et for estates and trusts.’’. 

17 (3) The heading of section 1(j)(5) of such Code 

18 is amended to read as follows: ‘‘APPLICATION OF

19 ZERO PERCENT CAPITAL GAIN RATE BRACKETS’’. 

20 (4) Subparagraphs (A) and (B) of section 

21 1(j)(5) of such Code are amended to read as follows: 

22 ‘‘(A) IN GENERAL.—Subsection 

23 (h)(1)(B)(i) shall be applied by substituting 

24 ‘below the maximum zero rate amount’ for 

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1 ‘which would (without regard to this paragraph) 

2 be taxed at a rate below 25 percent’. 

3 ‘‘(B) MAXIMUM ZERO RATE AMOUNT DE4 FINED.—For purposes of subparagraph (A), the 

5 term ‘maximum zero rate amount’ means— 

6 ‘‘(i) in the case of a joint return or 

7 surviving spouse, $77,200; 

8 ‘‘(ii) in the case of an individual who 

9 is a head of household (as defined in sec10 tion 2(b)), $51,700; 

11 ‘‘(iii) in the case of any other indi12 vidual (other than an estate or trust), an 

amount equal to 1 13 ⁄2 of the amount in effect 

14 for the taxable year under clause (i); and 

15 ‘‘(iv) in the case of an estate or trust, 

16 $2,600.’’. 

17 (5) Section 1(j)(5)(C) of such Code is amended 

18 by striking ‘‘clauses (i) and (ii) of’’. 

19 (c) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to taxable years beginning after 

21 December 31, 2019. 

22 (d) SECTION 15 NOT TO APPLY.—Section 15 of the 

23 Internal Revenue Code of 1986 shall not apply to any 

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1 change in a rate of tax by reason of any amendment made 

2 by this section. 

Passed the House of Representatives December 19, 

2019. 

Attest: CHERYL L. JOHNSON, 

Clerk.