II 

115TH CONGRESS 

1ST SESSION S. 1849 

To amend the Internal Revenue Code of 1986 to modify the earned income 

tax credit to account for the amount by which economic growth has 

outpaced income growth, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 19, 2017 

Mr. BROWN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

the earned income tax credit to account for the amount 

by which economic growth has outpaced income growth, 

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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Grow American In5 comes Now Act of 2017’’ or the ‘‘GAIN Act of 2017’’. 

6 SEC. 2. MODIFICATION OF EARNED INCOME TAX CREDIT. 

7 (a) IN GENERAL.— 


ethrower on DSK3G9T082PROD with BILLS
2 

•S 1849 IS

1 (1) INCREASE IN CREDIT PERCENTAGE.—The 

2 table in section 32(b)(1) of the Internal Revenue 

3 Code of 1986 is amended— 

4 (A) by striking ‘‘7.65’’ in the second col5 umn (relating to credit percentage) and insert6 ing ‘‘30’’; 

7 (B) by striking ‘‘7.65’’ in the third column 

8 (relating to phaseout percentage) and inserting 

9 ‘‘15.98’’; 

10 (C) by striking ‘‘34’’ and inserting 

11 ‘‘65.28’’; 

12 (D) by striking ‘‘40’’ and inserting 

13 ‘‘76.80’’; and 

14 (E) by striking ‘‘45’’ and inserting 

15 ‘‘86.40’’. 

16 (2) EARNED INCOME AMOUNT AND PHASEOUT

17 AMOUNT.— 

18 (A) IN GENERAL.—Subparagraph (A) of 

19 section 32(b)(2) of such Code is amended by 

20 striking ‘‘Subject to subparagraph (B), the 

21 earned income amount and the phaseout 

22 amount’’ and inserting ‘‘Subject to subpara23 graph (B)— 

24 ‘‘(i) PHASEOUT AMOUNT.—The phase25 out amount is $18,340. 


ethrower on DSK3G9T082PROD with BILLS
3 

•S 1849 IS

1 ‘‘(ii) EARNED INCOME AMOUNT.—The 

2 earned income amount’’. 

3 (B) CREDIT PHASE-IN ENDS.—Section 

4 32(b)(2)(A)(ii) of such Code, as amended by 

5 subparagraph (A), is further amended by strik6 ing the table and inserting the following: 

‘‘In the case of an The earned income 

eligible individual with: amount is: 

1 qualifying child ......................................................................... $10,000

2 or more qualifying children ...................................................... $14,040

No qualifying children ................................................................. $10,000.’’. 

7 (b) ELIGIBILITY AGE.—Subclause (II) of section 

8 32(c)(1)(A)(ii) of the Internal Revenue Code of 1986 is 

9 amended by striking ‘‘25’’ and inserting ‘‘21’’. 

10 (c) CONFORMING AND TECHNICAL AMENDMENT.— 

11 Paragraph (1) of section 32(j) of the Internal Revenue 

12 Code of 1986 is amended to read as follows: 

13 ‘‘(1) IN GENERAL.—In the case of any taxable 

14 year beginning after 2016, each of the dollar 

15 amounts in subsections (b)(2) and (i)(1) shall be in16 creased by an amount equal to— 

17 ‘‘(A) such dollar amount, multiplied by 

18 ‘‘(B) the cost-of-living adjustment deter19 mined under section 1(f)(3) for the calendar 

20 year in which the taxable year begins, deter21 mined— 

22 ‘‘(i) in the case of amounts in sub23 section (b)(2)(A), by substituting ‘calendar 


ethrower on DSK3G9T082PROD with BILLS
4 

•S 1849 IS

1 year 2016’ for ‘calendar year 1992’ in sub2 paragraph (B) thereof, and 

3 ‘‘(ii) in the case of amounts in sub4 section (i)(1), by substituting ‘calendar 

5 year 1995’ for ‘calendar year 1992’ in sub6 paragraph (B) thereof.’’. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2016. 

10 SEC. 3. ADVANCE PAYMENT OF EARNED INCOME CREDIT. 

11 (a) IN GENERAL.—Chapter 25 of subtitle C of the 

12 Internal Revenue Code of 1986 is amended by inserting 

13 after section 3506 the following new section: 

14 ‘‘SEC. 3507. ADVANCE PAYMENT OF EARNED INCOME CRED15 IT. 

16 ‘‘(a) ADVANCE PAYMENT.— 

17 ‘‘(1) IN GENERAL.—An employer making pay18 ment of wages to an employee with respect to whom 

19 an eligibility certificate is in effect shall, at the time 

20 of paying such wages for the payroll period elected 

21 by the employee under paragraph (2), make an addi22 tional lump sum payment to such employee equal to 

23 the earned income advance amount (except as pro24 vided in subsection (b)(1)(C)(ii)) of such employee. 


ethrower on DSK3G9T082PROD with BILLS
5 

•S 1849 IS

1 ‘‘(2) PAYMENTS AVAILABLE AFTER 6 MONTHS

2 OF EMPLOYMENT DURING CALENDAR YEAR.—For 

3 purposes of paragraph (1), an employee with respect 

4 to whom an eligibility certificate is in effect for the 

5 calendar year may elect to receive the earned income 

6 advance amount at the same time as wages for any 

7 payroll period which begins after the employee has 

8 been paid wages by the employer for a period of not 

9 less than 6 months during such calendar year. 

10 ‘‘(b) ELIGIBILITY CERTIFICATE.— 

11 ‘‘(1) IN GENERAL.—For purposes of this sec12 tion, an eligibility certificate is a statement sub13 mitted by an employee to the employer which— 

14 ‘‘(A) certifies that the employee is eligible 

15 to receive the credit provided by section 32 for 

16 the taxable year, 

17 ‘‘(B) certifies that the employee does not 

18 have an eligibility certificate in effect for the 

19 calendar year with respect to the payment of 

20 wages by another employer, and 

21 ‘‘(C) certifies that— 

22 ‘‘(i) an eligibility certificate has not 

23 been in effect for the spouse of the em24 ployee on any date during the calendar 

25 year, or 


ethrower on DSK3G9T082PROD with BILLS
6 

•S 1849 IS

1 ‘‘(ii) such a certificate is in effect for 

2 the spouse of the employee, and the employee is eligible to receive only 1 3 ⁄2 the 

4 earned income advance amount otherwise 

5 determined with respect to the employee. 

6 ‘‘(2) EMPLOYER NOT RESPONSIBLE FOR

7 VERIFICATION.—For purposes of this section, an 

8 employer shall not— 

9 ‘‘(A) be required to verify any certification 

10 made by an employee in the statement de11 scribed in paragraph (1), or 

12 ‘‘(B) be held liable for any false claims or 

13 statements made by an employee in regards to 

14 such statement. 

15 ‘‘(c) EARNED INCOME ADVANCE AMOUNT.— 

16 ‘‘(1) DETERMINATION OF AMOUNT.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), the term ‘earned income advance 

19 amount’ means, with respect to any payroll pe20 riod, the amount determined— 

21 ‘‘(i) on the basis of the wages of the 

22 employee from the employer during such 

23 calendar year through such payroll period, 

24 and 


ethrower on DSK3G9T082PROD with BILLS
7 

•S 1849 IS

1 ‘‘(ii) in accordance with tables issued 

2 by the Secretary. 

3 ‘‘(B) LIMITATION.—For each calendar 

4 year, except as provided in subparagraph (C), 

5 the earned income advance amount shall not ex6 ceed $500. 

7 ‘‘(C) ADJUSTMENT FOR INFLATION.— 

8 ‘‘(i) IN GENERAL.—In the case of any 

9 taxable year beginning after 2019, the 

10 $500 amount in subparagraph (B) shall be 

11 increased by an amount equal to— 

12 ‘‘(I) such dollar amount, multi13 plied by 

14 ‘‘(II) the cost-of-living adjust15 ment determined under section 1(f)(3) 

16 for the calendar year in which the tax17 able year begins determined by sub18 stituting ‘calendar year 2018’ for ‘cal19 endar year 1992’ in subparagraph (B) 

20 thereof. 

21 ‘‘(ii) ROUNDING.—If any increase de22 termined under paragraph (1) is not a 

23 multiple of $10, such increase shall be 

24 rounded to the nearest multiple of $10. 


ethrower on DSK3G9T082PROD with BILLS
8 

•S 1849 IS

1 ‘‘(2) ARMED FORCES.—In the case of an em2 ployee who is a member of the Armed Forces of the 

3 United States, the earned income advance amount 

4 shall be determined by taking into account the total 

5 wages of such employee, as determined for purposes 

6 of section 32. 

7 ‘‘(3) ADVANCE AMOUNT TABLES.—For pur8 poses of paragraph (1)(A)(ii), the tables issued by 

9 the Secretary shall be similar in form to the tables 

10 issued under section 3402 and, to the extent fea11 sible, coordinated with such tables. 

12 ‘‘(d) PAYMENTS TO BE TREATED AS PAYMENTS OF

13 WITHHOLDING AND FICA TAXES.— 

14 ‘‘(1) IN GENERAL.—Payments made by an em15 ployer under subsection (a) to an employee— 

16 ‘‘(A) shall not be treated as payment of 

17 compensation, and 

18 ‘‘(B) shall be treated as made out of— 

19 ‘‘(i) amounts required to be deducted 

20 and withheld for the payroll period under 

21 section 3401, 

22 ‘‘(ii) amounts required to be deducted 

23 for the payroll period under section 3102, 

24 and 


ethrower on DSK3G9T082PROD with BILLS
9 

•S 1849 IS

1 ‘‘(iii) amounts of the taxes imposed 

2 for the payroll period under section 3111, 

3 as if the employer had paid to the Secretary, on 

4 the day on which the wages are paid to the em5 ployee, an amount equal to such payments. 

6 ‘‘(2) ADVANCE PAYMENTS EXCEED TAXES

7 DUE.—In the case of any employer, if for any pay8 roll period the aggregate amount of earned income 

9 advance payments exceeds the sum of the amounts 

10 referred to in paragraph (1)(B), the employer shall 

11 pay only so much of such earned income advance 

12 payment as does not exceed such sum, and shall not 

13 make any further advance payments to the employee 

14 for the calendar year. 

15 ‘‘(3) FAILURE TO MAKE ADVANCE PAY16 MENTS.—Failure to make any payment of an earned 

17 income advance amount as required under this sec18 tion shall be treated as the failure at such time to 

19 deduct and withhold under chapter 24 an amount 

20 equal to the earned income advance amount. 

21 ‘‘(e) SUBMISSION OF CERTIFICATE.— 

22 ‘‘(1) EFFECTIVE PERIOD.—An eligibility certifi23 cate submitted to an employer at any time during 

24 the calendar year shall continue in effect with re25 spect to the employee during such calendar year 


ethrower on DSK3G9T082PROD with BILLS
10 

•S 1849 IS

1 until revoked by the employee or until another such 

2 certificate takes effect under this section. 

3 ‘‘(2) REQUIREMENT TO REVOKE CERTIFI4 CATE.—In the case of an employee who has sub5 mitted an eligibility certificate under this section and 

6 subsequently becomes ineligible for the credit pro7 vided under section 32 for the taxable year, the em8 ployee shall, not later than 10 days after becoming 

9 ineligible for such credit, submit to the employer a 

10 revocation of such certificate. 

11 ‘‘(3) FORM AND CONTENTS OF CERTIFICATE.— 

12 Eligibility certificates shall be in such form and con13 tain such other information as the Secretary may by 

14 regulations prescribe. 

15 ‘‘(f) TAXPAYERS MAKING PRIOR FRAUDULENT OR

16 RECKLESS CLAIMS.— 

17 ‘‘(1) IN GENERAL.—No earned income advance 

18 amount shall be paid under this section for any tax19 able year in the disallowance period. 

20 ‘‘(2) DISALLOWANCE PERIOD.—For purposes of 

21 paragraph (1), the disallowance period is— 

22 ‘‘(A) the period of 10 taxable years after 

23 the most recent taxable year for which there 

24 was a final determination that the taxpayer’s 


ethrower on DSK3G9T082PROD with BILLS
11 

•S 1849 IS

1 claim of an earned income advance amount 

2 under this section was due to fraud, and 

3 ‘‘(B) the period of 2 taxable years after 

4 the most recent taxable year for which there 

5 was a final determination that the taxpayer’s 

6 claim of an earned income advance amount 

7 under this section was due to reckless or inten8 tional disregard of rules and regulations (but 

9 not due to fraud). 

10 ‘‘(g) TAXABLE YEAR.—The term ‘taxable year’ 

11 means the last taxable year of the employee under subtitle 

12 A beginning in the calendar year in which the wages are 

13 paid. 

14 ‘‘(h) IRS NOTIFICATION.—The Internal Revenue 

15 Service shall take such steps as may be appropriate to en16 sure that taxpayers who receive a refund of the credit 

17 under section 32 are aware of the availability of earned 

18 income advance amounts under this section.’’. 

19 (b) COORDINATION WITH ADVANCE PAYMENTS.— 

20 Section 32 of the Internal Revenue Code of 1986 is 

21 amended by inserting after subsection (f) the following 

22 new subsection: 

23 ‘‘(g) COORDINATION WITH ADVANCE PAYMENTS OF

24 EARNED INCOME CREDIT.— 


ethrower on DSK3G9T082PROD with BILLS
12 

•S 1849 IS

1 ‘‘(1) RECAPTURE OF ADVANCE PAYMENTS.—If 

2 any payment is made to the individual by an em3 ployer under section 3507 during any calendar year, 

4 then the tax imposed by this chapter for the individ5 ual’s last taxable year beginning in such calendar 

6 year shall be increased by the aggregate amount of 

7 such payments. 

8 ‘‘(2) RECONCILIATION OF PAYMENTS AD9 VANCED AND CREDIT ALLOWED.—Any increase in 

10 tax under paragraph (1) shall not be treated as tax 

11 imposed by this chapter for purposes of determining 

12 the amount of any credit (other than the credit al13 lowed by subsection (a)) allowable under this part.’’. 

14 (c) FILING REQUIREMENT.—Section 6012(a) of the 

15 Internal Revenue Code of 1986 is amended by inserting 

16 after paragraph (8) the following new paragraph: 

17 ‘‘(9) Every individual who receives payments 

18 during the calendar year in which the taxable year 

19 begins under section 3507.’’. 

20 (d) RECEIPTS FOR EMPLOYEES.—Section 6051(a) of 

21 the Internal Revenue Code of 1986 is amended by insert22 ing after paragraph (6) the following new paragraph: 

23 ‘‘(7) the total amount paid to the employee 

24 under section 3507 (relating to advance payment of 

25 earned income credit),’’. 


ethrower on DSK3G9T082PROD with BILLS
13 

•S 1849 IS

1 (e) CLERICAL AMENDMENT.—The table of sections 

2 for chapter 25 of subtitle C of the Internal Revenue Code 

3 of 1986 is amended by inserting after the item relating 

4 to section 3506 the following new item: 

‘‘Sec. 3507. Advance payment of earned income credit.’’. 

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

6 this section shall apply to taxable years beginning after 

7 the date which is 1 year after the date of the enactment 

8 of this Act. 

Æ 


ethrower on DSK3G9T082PROD with BILLS