II 

115TH CONGRESS 

1ST SESSION S. 1938 

To establish a policy framework that offers and rewards work, strengthens 

the incentive to work, greatly reduces poverty, and creates new jobs 

in the United States, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 5, 2017 

Ms. BALDWIN (for herself and Mr. BOOKER) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To establish a policy framework that offers and rewards 

work, strengthens the incentive to work, greatly reduces 

poverty, and creates new jobs in the United States, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Stronger Way Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—TRANSITIONAL JOBS PROGRAM 


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Sec. 101. Purposes. 

Sec. 102. Definitions. 

Sec. 103. Transitional jobs. 

Sec. 104. Authorization of appropriations. 

TITLE II—POVERTY REDUCTION TAX CREDITS 

Sec. 201. Reform of earned income credit. 

Sec. 202. Establishment of fully refundable child tax credit. 

1 TITLE I—TRANSITIONAL JOBS 

2 PROGRAM 

3 SEC. 101. PURPOSES. 

4 The purposes of the transitional jobs program under 

5 this title are to— 

6 (1) reduce poverty and unemployment; 

7 (2) offer unemployed or partially employed indi8 viduals the opportunity to work in a transitional job 

9 for the purpose of enabling such individuals to gain, 

10 through wage-paying jobs, the experience and skills 

11 needed to move into regular employment; and 

12 (3) assist employers to create new regular em13 ployment. 

14 SEC. 102. DEFINITIONS. 

15 In this title: 

16 (1) EMPLOYER OF RECORD.—The term ‘‘em17 ployer of record’’ means a local government, non18 profit, or for-profit entity selected under section 

19 103(c)(3)(A) to carry out the responsibilities de20 scribed in section 103(d). 


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1 (2) HOST SITE EMPLOYER.—The term ‘‘host 

2 site employer’’ means an employer that— 

3 (A) provides an individual who is eligible 

4 for a transitional job with the opportunity to 

5 work in a specific transitional job for which the 

6 individual is qualified, as determined by such 

7 employer, at a worksite that is under the direct 

8 supervision of such employer; and 

9 (B) agrees to be responsible for— 

10 (i) selecting, training, and supervising 

11 the transitional job worker, including pro12 viding a written job description, initial 

13 training, ongoing management, and peri14 odic performance reviews; 

15 (ii) certifying to the employer of 

16 record, in the manner prescribed by the 

17 Secretary, the number of hours that the 

18 transitional job worker has worked for the 

19 host site employer; and 

20 (iii) cooperating with the employer of 

21 record in facilitating the movement of the 

22 transitional job worker into regular em23 ployment. 


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1 (3) LOCAL AREA.—The term ‘‘local area’’ 

2 means a city, county, or other general purpose polit3 ical subdivision of a State. 

4 (4) REGULAR EMPLOYMENT.—The term ‘‘reg5 ular employment’’ means regular, unsubsidized em6 ployment, as defined by the Secretary. 

7 (5) SECRETARY.—The term ‘‘Secretary’’ means 

8 the Secretary of Labor. 

9 (6) STATE.—The term ‘‘State’’ means each of 

10 the several States of the United States, the District 

11 of Columbia, and the Commonwealth of Puerto Rico. 

12 (7) TRANSITIONAL JOB.—The term ‘‘transi13 tional job’’ means a job offered to an eligible indi14 vidual through the program authorized under section 

15 103 that— 

16 (A) provides the rate of pay described in 

17 section 103(d)(6); and 

18 (B) provides the individual with employ19 ment of— 

20 (i) not less than 16 hours per week; 

21 and 

22 (ii) not more than 40 hours per week, 

23 when combined with any hours per week of 

24 work that the individual is employed 

25 through any other employer (if applicable). 


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1 SEC. 103. TRANSITIONAL JOBS. 

2 (a) PROGRAM AUTHORIZED.—From amounts made 

3 available under section 104, the Secretary shall establish 

4 a program, through grant agreements described in sub5 section (c) with State and local government agencies, that 

6 provides eligible unemployed or partially employed individ7 uals with opportunities to work in a transitional job for 

8 the purpose of enabling such individuals to gain, through 

9 wage-paying jobs, the experience and skills needed to move 

10 into regular employment. 

11 (b) ELIGIBILITY.—To be eligible for a transitional 

12 job, an individual shall— 

13 (1) be a resident of the United States, and a 

14 resident of the State in which the individual applies 

15 for a transitional job; 

16 (2) be not less than 18 years of age; 

17 (3) not be incarcerated in any Federal or State 

18 penal institution, unless the individual is partici19 pating in a work-release program authorized by the 

20 United States or a State and the United States or 

21 the State authorizes employment under this cir22 cumstance in a transitional job; and 

23 (4) be unemployed, or employed for less than 

24 30 hours per week, for not less than 4 consecutive 

25 weeks preceding the individual’s application for a 

26 transitional job. 


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1 (c) TRANSITIONAL JOBS PROGRAM ADMINISTRA2 TION.— 

3 (1) IN GENERAL.—The Secretary shall enter 

4 into agreements with State and local government 

5 agencies under which— 

6 (A) the State and local government agen7 cies carry out all activities described in para8 graph (3); and 

9 (B) the Secretary provides grants to the 

10 State and local government agencies to carry 

11 out such activities. 

12 (2) SELECTION CRITERIA.—The Secretary shall 

13 select State and local government agencies for the 

14 agreements described in paragraph (1) based on— 

15 (A) the agencies’ level of experience and 

16 commitment to transitional jobs programs; and 

17 (B) such other criteria as the Secretary de18 termines appropriate, which may include cri19 teria relating to the implementation by such 

20 agencies of transitional jobs program models 

21 under this title. 

22 (3) ACTIVITIES.—The activities described in 

23 this paragraph are the following: 

24 (A) Select, on a competitive basis, and 

25 enter into a contract with one or more local 


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1 government, nonprofit, or for-profit entities 

2 to— 

3 (i) administer the transitional jobs 

4 program in the State or local area to be 

5 served; and 

6 (ii) function as the employer of record 

7 described in subsection (d). 

8 (B) Pay each entity selected to serve as an 

9 employer of record, based upon the terms of the 

10 contract and full documentation of perform11 ance, for the entity’s performance of its con12 tractually defined services in administering the 

13 transitional jobs program, including reimburse14 ment of the entity for appropriate wages and 

15 taxes the entity has paid, as required under 

16 paragraphs (6) and (7) of subsection (d), to or 

17 on behalf of eligible individuals who worked in 

18 transitional jobs in the entity’s capacity as an 

19 employer of record. A State or local govern20 mental agency may require a host employer to 

21 pay a portion of the appropriate wages and 

22 taxes for the individual. 

23 (C) Cooperate with the Comptroller Gen24 eral of the United States, the Congressional 

25 Budget Office, and other Federal and State 


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1 agencies in the performance of audits and the 

2 conduct of fiscal and programmatic oversight. 

3 (D) Annually submit to the Secretary, and 

4 to the Governor or other chief executive officer 

5 of the State in which the program is located 

6 and the State legislature, a report on the State 

7 or local government agency’s role and accom8 plishments in the operation of the transitional 

9 jobs program, in a format specified by the Sec10 retary. 

11 (E) Conduct, or enter into arrangements 

12 with independent academic or research organi13 zations to conduct, periodic evaluations of the 

14 effectiveness of the program within the State or 

15 local area served in— 

16 (i) reducing poverty and unemploy17 ment; 

18 (ii) enabling unemployed and under19 employed individuals to gain the experience 

20 and skills needed to move into regular em21 ployment; and 

22 (iii) assisting employers in creating 

23 new regular employment. 


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1 (F) Promulgate any rules necessary for the 

2 agency’s operation of the transitional jobs pro3 gram. 

4 (4) SCOPE OF PROGRAM.— 

5 (A) IN GENERAL.—The Secretary shall, to 

6 the greatest extent practicable and subject to 

7 the availability of appropriations, ensure that 

8 the agreements described in paragraph (1) 

9 make the transitional jobs program available to 

10 eligible individuals in all local areas of all 

11 States. 

12 (B) INDIVIDUALS WITH SIGNIFICANT BAR13 RIERS TO EMPLOYMENT.—Notwithstanding 

14 subparagraph (A), a State or local government 

15 agency entering into an agreement under para16 graph (1) may, in carrying out the activities de17 scribed in paragraph (3), choose to target the 

18 assistance to eligible individuals under sub19 section (b) who have significant barriers to em20 ployment. 

21 (C) USE OF EXISTING SYSTEMS.—A State 

22 or local government agency entering into an 

23 agreement under paragraph (1) may carry out 

24 the activities described in paragraph (3) 

25 through, or in alignment with, other subsidized 


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1 employment and job training activities or sys2 tems available within the State or local area. 

3 (d) RESPONSIBILITIES OF AN EMPLOYER OF

4 RECORD.—Each local government, nonprofit, or for-profit 

5 entity selected to serve as an employer of record under 

6 subsection (c)(3)(A) shall do each of the following: 

7 (1) Determine the eligibility of individuals ap8 plying for the transitional jobs program under this 

9 title. 

10 (2) Conduct orientation activities for individuals 

11 that the employer of record has determined are eligi12 ble for the transitional jobs program. 

13 (3) Assess the education, prior work experience, 

14 and other relevant factors of each eligible individual 

15 who requests a transitional job, for the purpose of 

16 assisting the individual to be successful in applying 

17 for and performing well in a specific transitional job. 

18 (4) Connect each eligible individual requesting a 

19 transitional job to the one-stop delivery system es20 tablished under section 121(e) of the Workforce In21 novation and Opportunity Act (29 U.S.C. 3151(e)), 

22 and to other resources that provide assistance to job 

23 seekers. 

24 (5) Offer each eligible individual who desires to 

25 work in a transitional job and meets the eligibility 


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1 requirements under paragraphs (1) through (4) of 

2 subsection (b) the opportunity to work for a host 

3 site employer. The host site employer may be— 

4 (A) the employer of record; or 

5 (B) another organization that has entered 

6 into an agreement with the employer of record, 

7 and as part of such agreement, agrees to func8 tion as, and meet the responsibilities of, a host 

9 site employer, for a period not to exceed 30 

10 weeks, subject to the requirements of subsection 

11 (e). 

12 (6) Pay each individual described in paragraph 

13 (5), for each hour of work performed for the host 

14 site employer, an amount at a rate of pay that is 

15 equal to, or greater than, the greater of— 

16 (A) the minimum wage rate applicable in 

17 the State in which the applicable position is lo18 cated; 

19 (B) the wage rate applicable under section 

20 6 of the Fair Labor Standards Act of 1938 (29 

21 U.S.C. 206); or 

22 (C) if the State or local governmental 

23 agency determines appropriate, the prevailing 

24 wage rate, as determined by the State or local 


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1 governmental agency, for the type of work per2 formed by the individual. 

3 (7) With respect to the employment of each in4 dividual described in paragraph (5)— 

5 (A) pay any applicable Federal taxes for 

6 employers, including the employer taxes im7 posed under sections 3111, 3221, and 3301 of 

8 the Internal Revenue Code of 1986; 

9 (B) pay any other State or local govern10 ment taxes that employers in the relevant State 

11 or local area are required to pay; 

12 (C) withhold from the individual’s earnings 

13 the taxes imposed under sections 3101 and 

14 3201 of the Internal Revenue Code of 1986, 

15 and any other Federal, State, or local tax re16 quired to be withheld for employees; 

17 (D) complete and submit to the appro18 priate government agencies, all required Fed19 eral, State, and local tax-related and employ20 ment-related forms that an employer would 

21 typically submit, including by ensuring that 

22 each individual provides the information nec23 essary for the completion of such forms; 


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1 (E) provide the individual with a Form W– 

2 2 Wage and Tax Statement for the calendar 

3 year; 

4 (F) provide for workers’ compensation cov5 erage for the individual under the applicable 

6 Federal and State workers’ compensation laws; 

7 (G) perform, either directly or through an 

8 agreement described in paragraph (5)(B) with a 

9 host site employer, all other functions that an 

10 employer would typically perform; 

11 (H) comply with any applicable require12 ments for providing health insurance coverage, 

13 including under the Patient Protection and Af14 fordable Care Act (Public Law 111–148) and 

15 any amendments made by that Act; and 

16 (I) provide any benefits that are otherwise 

17 required of employers in the relevant State or 

18 local area. 

19 (8) Ensure that no transitional job would result 

20 in a violation of any of the worker protections pro21 vided in subsection (f). 

22 (e) DURATION OF TRANSITIONAL JOB.— 

23 (1) IN GENERAL.—An individual may work in a 

24 transitional job for a period not to exceed 30 weeks, 

25 as long as— 


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1 (A) the individual continues to meet the 

2 eligibility requirements for a transitional job 

3 under paragraphs (1) through (3) of subsection 

4 (b); 

5 (B) the individual, during the period of 

6 employment in the transitional job, pursues ef7 forts to replace hours of work in the transi8 tional job with regular employment; 

9 (C) the individual has not— 

10 (i) obtained regular employment that 

11 consistently equals or exceeds 30 hours of 

12 work per week; or 

13 (ii) turned down any appropriate offer 

14 for such regular employment, as deter15 mined by the Secretary; and 

16 (D) if the individual receives and accepts 

17 an appropriate offer for such regular employ18 ment, the individual does not postpone the 

19 starting date for such employment beyond the 

20 earliest date practicable, as determined by the 

21 Secretary, even if such date occurs before the 

22 individual has reached the maximum transi23 tional job time period of 30 weeks. 

24 (2) ADDITIONAL TRANSITIONAL JOB.—A State 

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1 tional jobs program under this section shall, subject 

2 to the availability of funds, allow an individual who 

3 has completed the maximum number of weeks in a 

4 transitional job an opportunity to work in a different 

5 transitional job, under the same terms and condi6 tions established under this section, if the indi7 vidual— 

8 (A) is unable, after the end of 30 weeks of 

9 employment in a transitional job, to find reg10 ular employment that consistently equals or ex11 ceeds 30 hours per week; 

12 (B) engages in an intensive job search, as 

13 defined by the Secretary, for not less than 4 

14 consecutive weeks following the completion of a 

15 transitional job, and remains unable to find reg16 ular employment; and 

17 (C) meets the eligibility requirements 

18 under paragraphs (1) through (4) of subsection 

19 (b). 

20 (f) WORKER PROTECTIONS.— 

21 (1) PROHIBITION AGAINST VIOLATION OF CON22 TRACTS.—A transitional job shall not violate an ex23 isting contract for services or a collective bargaining 

24 agreement, and a transitional job that would violate 

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1 taken without the written concurrence of the labor 

2 organization and employer concerned. 

3 (2) OTHER PROHIBITIONS.—An individual de4 scribed in subsection (d)(5) shall not be assigned to 

5 a transitional job— 

6 (A) when any other individual is on layoff 

7 from the same or any substantially equivalent 

8 job; 

9 (B) if the employer has terminated the em10 ployment of any regular employee or otherwise 

11 caused an involuntary reduction in its workforce 

12 with the intention of filling the vacancy so cre13 ated with the individual working in the transi14 tional job; or 

15 (C) if the employer has caused an involun16 tary reduction to less than full time in hours of 

17 any employee in the same or a substantially 

18 equivalent job. 

19 (g) EVALUATIONS.—The Secretary may reserve not 

20 more than a total of 10 percent of the amounts made 

21 available under section 104 for— 

22 (1) evaluations of transitional jobs program 

23 models implemented with grants awarded under this 

24 title; and 


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1 (2) other evaluations of grants and activities 

2 carried out under this title. 

3 SEC. 104. AUTHORIZATION OF APPROPRIATIONS. 

4 There are authorized to be appropriated to carry out 

5 this title such sums as may be necessary. 

6 TITLE II—POVERTY REDUCTION 

7 TAX CREDITS 

8 SEC. 201. REFORM OF EARNED INCOME CREDIT. 

9 (a) IN GENERAL.—Section 32 of the Internal Rev10 enue Code of 1986 is amended— 

11 (1) by amending subsection (b) to read as fol12 lows: 

13 ‘‘(b) PERCENTAGES AND AMOUNTS.—For purposes 

14 of subsection (a): 

15 ‘‘(1) PERCENTAGES.—The credit percentage 

16 and the phaseout percentage shall be determined as 

17 follows: 

‘‘In the case of an eligible individual with: The credit 

percentage is: 

The phaseout 

percentage is: 

No qualifying children .................................... 23.15 23.15

1 qualifying child ............................................ 70 23.85

2 qualifying children ....................................... 75 24.50

3 or more qualifying children ......................... 80 29.70. 

18 ‘‘(2) AMOUNTS.— 

19 ‘‘(A) IN GENERAL.—Subject to subpara20 graph (B), the earned income amount and the 


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1 phaseout amount shall be determined as fol2 lows: 

‘‘In the case of an eligible individual with: 

The earned 

income 

amount is: 

The phaseout 

amount is: 

No qualifying children ........................................ $6,612 $16,969

1 qualifying child ................................................ $8,277 $15,000

2 qualifying children ........................................... $9,675 $15,000

3 qualifying children ........................................... $12,220 $15,000. 

3 ‘‘(B) JOINT RETURNS.— 

4 ‘‘(i) IN GENERAL.—Except as pro5 vided in clause (ii), in the case of a joint 

6 return filed by an eligible individual and 

7 such individual’s spouse, the phaseout 

8 amount determined under subparagraph 

9 (A) shall be increased by $5,550. 

10 ‘‘(ii) TAXPAYERS WITH NO QUALI11 FYING CHILDREN.—In the case of a joint 

12 return filed by an eligible individual and 

13 such individual’s spouse who do not have a 

14 qualifying child for the taxable year, the 

15 phaseout amount in the third column of 

16 the first row of the table in subparagraph 

17 (A) shall be increased by $8,000.’’; 

18 (2) in subclause (II) of subsection (c)(1)(A)(ii), 

19 by striking ‘‘attained age 25 but not attained age 

20 65’’ and inserting ‘‘attained age 21 but not attained 

21 age 67’’; and 


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1 (3) by amending subsection (j) to read as fol2 lows: 

3 ‘‘(j) INFLATION ADJUSTMENTS.— 

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

5 year beginning after 2017, each of the dollar 

6 amounts in subparagraph (A) of subsection (b)(2) 

7 (after being increased under subparagraph (B) 

8 thereof) shall be increased by an amount equal to— 

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

10 ‘‘(B) the cost-of-living adjustment deter11 mined under section 1(f)(3) for the calendar 

12 year in which the taxable year begins, deter13 mined by substituting ‘calendar year 2016’ for 

14 ‘calendar year 1992’ in subparagraph (B) 

15 thereof. 

16 ‘‘(2) ROUNDING.—If any dollar amount in17 creased under paragraph (1) is not a multiple of 

18 $50, such dollar amount shall be rounded to the 

19 nearest multiple of $50.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2016. 

23 SEC. 202. ESTABLISHMENT OF FULLY REFUNDABLE CHILD 

24 TAX CREDIT. 

25 (a) CREDIT MADE REFUNDABLE.— 


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1 (1) IN GENERAL.—The Internal Revenue Code 

2 of 1986 is amended— 

3 (A) by redesignating section 24 as section 

4 36C; and 

5 (B) by moving section 36C (as so redesig6 nated) from subpart A of part IV of subchapter 

7 A of chapter 1 to the location immediately be8 fore section 37 in subpart C of part IV of sub9 chapter A of chapter 1. 

10 (2) CONFORMING AMENDMENTS.— 

11 (A) Section 36C of such Code, as redesig12 nated by subsection (a), is amended by striking 

13 subsection (d). 

14 (B) The table of sections for subpart A of 

15 part IV of subchapter A of chapter 1 of subtitle 

16 A of such Code is amended by striking the item 

17 relating to section 24. 

18 (C) The table of sections for subpart C of 

19 part IV of subchapter A of chapter 1 of subtitle 

20 A of such Code is amended by inserting after 

21 the item relating to section 36B the following: 

‘‘Sec. 36C. Child tax credit.’’. 

22 (D) Subparagraph (B) of section 45R(f)(3) 

23 of such Code is amended to read as follows: 

24 ‘‘(B) SPECIAL RULE.—Any amounts paid 

25 pursuant to an agreement under section 3121(l) 


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1 (relating to agreements entered into by Amer2 ican employers with respect to foreign affiliates) 

3 which are equivalent to the taxes referred to in 

4 subparagraph (A) shall be treated as taxes re5 ferred to in such subparagraph.’’. 

6 (E) Section 152(f)(6)(B)(ii) of such Code 

7 is amended by striking ‘‘section 24’’ and insert8 ing ‘‘section 36C’’. 

9 (F) Paragraph (26) of section 501(c) of 

10 such Code is amended in the flush matter at 

11 the end by striking ‘‘section 24(c)’’ and insert12 ing ‘‘section 36C(c)’’. 

13 (G) Section 6211(b)(4)(A) of such Code is 

14 amended— 

15 (i) by striking ‘‘24(d),’’; and 

16 (ii) by inserting ‘‘, 36C’’ after ‘‘36B’’. 

17 (H) Section 6213(g)(2) of such Code is 

18 amended— 

19 (i) in subparagraph (I), by striking 

20 ‘‘section 24(e)’’ and inserting ‘‘section 

21 36C(e)’’; 

22 (ii) in subparagraph (L), by striking 

23 ‘‘24, or 32’’ and inserting ‘‘32, or 36C’’; 

24 and 

25 (iii) in subparagraph (P)— 


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1 (I) by striking ‘‘24(h)(2)’’ and 

2 inserting ‘‘36C(g)(2)’’; 

3 (II) by striking ‘‘24’’ and insert4 ing ‘‘36C’’; and 

5 (III) by striking ‘‘(h)(2) thereof’’ 

6 and inserting ‘‘(g)(2) thereof’’. 

7 (I) Section 6402(m) of such Code is 

8 amended by striking ‘‘24 (by reason of sub9 section (d) thereof) or 32’’ and inserting ‘‘32 or 

10 36C’’. 

11 (J) Section 6695(g) of such Code is 

12 amended by striking ‘‘24, 25A(a)(1), or 32’’ 

13 and inserting ‘‘25A(a)(1), 32, or 36C’’. 

14 (K) Paragraph (2) of section 1324(b) of 

15 title 31, United States Code, is amended by in16 serting ‘‘, 36C’’ after ‘‘36B’’. 

17 (b) MODIFICATION OF CREDIT.— 

18 (1) CREDIT AMOUNT.—Subsection (a) of section 

19 36C of the Internal Revenue Code of 1986, as redes20 ignated by subsection (a)(1), is amended to read as 

21 follows: 

22 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax23 payer with 1 or more qualifying children, there shall be 

24 allowed as a credit against the tax imposed by this subtitle 

25 for the taxable year an amount equal to 45 percent of the 


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1 taxpayer’s earned income (within the meaning of section 

2 32) which is taken into account in computing taxable in3 come for the taxable year.’’. 

4 (2) LIMITATIONS.—Subsection (b) of section 

5 36C of such Code, as so redesignated, is amended to 

6 read as follows: 

7 ‘‘(b) LIMITATION.— 

8 ‘‘(1) IN GENERAL.—The amount of the credit 

9 determined under subsection (a) for any taxable year 

10 shall not exceed an amount equal to the product of 

11 $1,000 and the number of qualifying children of the 

12 taxpayer for the taxable year. 

13 ‘‘(2) REDUCTION BASED ON MODIFIED AD14 JUSTED GROSS INCOME.— 

15 ‘‘(A) IN GENERAL.—The amount which 

16 would (but for this paragraph) be allowable as 

17 a credit under this section (determined after the 

18 application of paragraph (1)) shall be reduced 

19 (but not below zero) by $50 for each $1,000 (or 

20 fraction thereof) by which the taxpayer’s modi21 fied adjusted gross income exceeds— 

22 ‘‘(i) $110,000, in the case of a joint 

23 return, 

24 ‘‘(ii) $75,000, in the case of an indi25 vidual who is not married, and 


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1 ‘‘(iii) $55,000, in the case of a mar2 ried individual filing a separate return. 

3 ‘‘(B) MARITAL STATUS; ADJUSTED GROSS

4 INCOME.—For purposes of this paragraph— 

5 ‘‘(i) marital status shall be determined 

6 under section 7703, and 

7 ‘‘(ii) the term ‘modified adjusted gross 

8 income’ means adjusted gross income in9 creased by any amount excluded from 

10 gross income under section 911, 931, or 

11 933.’’. 

12 (3) ADJUSTMENT FOR INFLATION.—Section 

13 36C of such Code, as so redesignated, is amended by 

14 inserting after subsection (c) the following new sub15 section: 

16 ‘‘(d) ADJUSTMENT FOR INFLATION.— 

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

18 year beginning after 2017, the $1,000 amount in 

19 subsection (b)(1) shall be increased by an amount 

20 equal to— 

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

22 ‘‘(B) the cost-of-living adjustment deter23 mined under section 1(f)(3) for the calendar 

24 year in which the taxable year begins deter25 mined by substituting ‘calendar year 2016’ for 


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1 ‘calendar year 1992’ in subparagraph (B) 

2 thereof. 

3 ‘‘(2) ROUNDING.—If any increase determined 

4 under paragraph (1) is not a multiple of $50, such 

5 increase shall be rounded to the nearest multiple of 

6 $50.’’. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2016. 

Æ 


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