I 

112TH CONGRESS 

2D SESSION H. R. 4260 

To amend the Internal Revenue Code of 1986 to allow an income disparity 

tax credit. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 26, 2012 

Ms. CLARKE of New York 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 allow an 

income disparity tax credit. 

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 ‘‘Adjusting for Income 

5 Disparity Act of 2012’’. 

6 SEC. 2. INCOME DISPARITY TAX CREDIT. 

7 (a) IN GENERAL.—Part IV of subchapter A of chap8 ter 1 of the Internal Revenue Code of 1986 is amended 

9 by inserting after section 32 the following new section: 


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1 ‘‘SEC. 32A. INCOME DISPARITY CREDIT. 

2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in3 dividual, there shall be allowed as a credit against the tax 

4 imposed by this subtitle for the taxable year an amount 

5 equal to income disparity credit amount with respect to 

6 the taxpayer for the taxable year. 

7 ‘‘(b) INCOME DISPARITY CREDIT AMOUNT.—For 

8 purposes of this section— 

9 ‘‘(1) IN GENERAL.—The income disparity credit 

10 amount shall be an amount equal to the applicable 

11 credit amount reduced (but not below zero) by the 

12 applicable percentage of so much of the taxpayer’s 

13 modified adjusted gross income as exceeds the 

14 phaseout threshold. 

15 ‘‘(2) APPLICABLE AMOUNT; PERCENTAGE.—The 

16 applicable credit amount, the applicable percentage, 

17 and the phaseout threshold shall be determined as 

18 follows: 

‘‘In the case of a taxpayer with: 

The 

applicable 

credit 

amount is: 

The 

applicable 

percentage is: 

The 

phaseout 

threshold is: 

No dependents .......................... $2,500 31⁄3 $15,000

1 dependent .............................. $4,000 51⁄3 $20,000

2 dependents ............................. $4,500 6 $25,000

3 or more dependents ............... $5,000 62⁄3 $30,000. 

19 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur20 poses of this section— 


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1 ‘‘(1) DEPENDENT.—The term ‘dependent’ has 

2 the meaning given such term by section 152 (deter3 mined without regard to subsections (b)(2) and 

4 (d)(1)(B) thereof.) 

5 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— 

6 The term ‘modified adjusted gross income’ means 

7 adjusted gross income increased by— 

8 ‘‘(A) any amount excluded from gross in9 come under section 911, 931, or 933, 

10 ‘‘(B) any amount of interest received or 

11 accrued by the taxpayer during the taxable year 

12 which is exempt from tax, 

13 ‘‘(C) an amount equal to the portion of the 

14 taxpayer’s social security benefits (as defined in 

15 section 86(d)) which is not included in gross in16 come under section 86 for the taxable year, and 

17 ‘‘(D) any Federal assistance otherwise ex18 cluded from gross income. 

19 ‘‘(3) MARRIED INDIVIDUALS.—In the case of an 

20 individual who is married (within the meaning of 

21 section 7703), this section shall apply only if a joint 

22 return is filed for the taxable year under section 

23 6013. 

24 ‘‘(4) RULE FOR EXCESSIVE INVESTMENT IN25 COME.—No credit shall be allowed under subsection 


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1 (a) for the taxable year if the aggregate amount of 

2 disqualified income (as defined in section 32(i)(1)) 

3 of the taxpayer for the taxable year exceeds $3,100. 

4 ‘‘(5) DEPENDENT INELIGIBLE.—If an indi5 vidual is a dependent with respect to a taxpayer for 

6 any taxable year of such taxpayer beginning in a cal7 endar year, such individual shall not be allowed a 

8 credit under this section for any taxable year of such 

9 individual beginning in such calendar year. 

10 ‘‘(6) LIMITATION ON ELIGIBILITY OF NON11 RESIDENT ALIENS.—No credit shall be allowed with 

12 respect to any individual who is a nonresident alien 

13 individual for any portion of the taxable year unless 

14 such individual is treated for such taxable year as a 

15 resident of the United States for purposes of this 

16 chapter by reason of an election under subsection 

17 (g) or (h) of section 6013. 

18 ‘‘(7) PRINCIPAL PLACE OF ABODE IN UNITED

19 STATES.— 

20 ‘‘(A) IN GENERAL.—No credit shall be al21 lowed with respect to an individual for a taxable 

22 year, unless such individual’s principal place of 

abode is in the United States for more than 1 23 ⁄2

24 of such taxable year. 


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1 ‘‘(B) TREATMENT OF MILITARY PER2 SONNEL STATIONED OUTSIDE THE UNITED

3 STATES.—Rules similar to the rules of section 

4 32(c)(4) shall apply for purposes of subpara5 graph (A). 

6 ‘‘(8) MINIMUM HOURS OF SERVICE.— 

7 ‘‘(A) IN GENERAL.—No credit shall be al8 lowed under subsection (a) with respect to an 

9 individual unless such individual (or, if married, 

10 such individual’s spouse) has performed 390 

11 hours of service or more for an employer during 

12 the taxable year. 

13 ‘‘(B) SPECIAL RULE FOR SELF-EMPLOY14 MENT.—A taxpayer who is an employee within 

15 the meaning of section 401(c)(1) shall be treat16 ed as performing service for an employer for 

17 purposes of this paragraph. 

18 ‘‘(9) IDENTIFYING INFORMATION REQUIRED.— 

19 No credit shall be allowed under subsection (a) with 

20 respect to an individual unless the TIN of such indi21 vidual, and the TIN of any dependent taken into ac22 count under this section with respect to such indi23 vidual, is included on the return claiming the credit. 

24 ‘‘(d) INFLATION ADJUSTMENT.—In the case of any 

25 taxable year beginning in a calendar year after 2012, each 


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1 of the dollar amounts in the table in subsection (b)(2) and 

2 the dollar amount in subsection (c)(4) shall be increased 

3 by an amount equal to— 

4 ‘‘(1) such dollar amount, multiplied by 

5 ‘‘(2) the cost-of-living adjustment determined 

6 under section 1(f)(3) for the calendar year in which 

7 the taxable year begins, determined by substituting 

8 ‘calendar year 2011’ for ‘calendar year 1992’ in sub9 paragraph (B) thereof. 

10 Any increase determined under the preceding sentence 

11 shall be rounded to the nearest multiple of $10.’’. 

12 (b) CLERICAL AMENDMENT.—The table of sections 

13 for part IV of subchapter A of chapter 1 of such Code 

14 is amended by inserting after the item relating to section 

15 32 the following new item: 

‘‘Sec. 32A. Income disparity credit.’’. 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2011. 

19 SEC. 3. ACCELERATION OF EGTRRA SUNSET. 

20 (a) IN GENERAL.—Section 901 of the Economic 

21 Growth and Tax Relief Reconciliation Act of 2001 is 

22 amended by striking ‘‘December 31, 2012’’ and inserting 

23 ‘‘December 31, 2011’’. 

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

25 this section shall take effect as if included in the enactVerDate Mar 15 2010 03:21 Mar 27, 2012 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4260.IH H4260

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1 ment of the Economic Growth and Tax Relief Reconcili2 ation Act of 2001. 

3 SEC. 4. ACCELERATION OF JGTRRA SUNSET. 

4 (a) IN GENERAL.—Section 303 of the Jobs and 

5 Growth Tax Relief Reconciliation Act of 2003 is amended 

6 by striking ‘‘December 31, 2012’’ and inserting ‘‘Decem7 ber 31, 2011’’. 

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

9 this section shall take effect as if included in the enact10 ment of the Jobs and Growth Tax Relief Reconciliation 

11 Act of 2003. 

Æ 


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