II 

117TH CONGRESS 

1ST SESSION S. 2522 

To amend the Internal Revenue Code of 1986 to treat certain tribal benefits 

and Alaska Permanent Fund dividends as earned income for purposes 

of the kiddie tax. 

IN THE SENATE OF THE UNITED STATES 

JULY 28, 2021 

Ms. MURKOWSKI (for herself and Mr. SULLIVAN) 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 treat certain tribal benefits and Alaska Permanent Fund dividends as earned income for purposes of the kiddie tax. 

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

3 SECTION 1. CERTAIN AMOUNTS TREATED AS EARNED IN4 COME FOR KIDDIE TAX. 

5 (a) IN GENERAL.—Section 1(g)(4)(C) of the Internal 

6 Revenue Code of 1986 is amended to read as follows: 

7 ‘‘(C) TREATMENT OF CERTAIN AMOUNTS

8 AS EARNED INCOME.—For purposes of this sub9 section, each of the following amounts shall be 


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1 treated as earned income of the child referred 

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

3 the gross income of such child: 

4 ‘‘(i) DISTRIBUTIONS FROM QUALIFIED

5 DISABILITY TRUSTS.—Any amount in6 cluded in the gross income of such child 

7 under section 652 or 662 by reason of 

8 being a beneficiary of a qualified disability 

9 trust (as defined in section 

10 642(b)(2)(C)(ii)). 

11 ‘‘(ii) CERTAIN INDIAN TRIBAL PAY12 MENTS.—Any payment which is included 

13 in the gross income of such child and made 

14 by an Indian tribal government (as defined 

15 in section 139E(c)(1)), or from a trust of 

16 which the Indian tribal government is 

17 treated as the owner under subpart E of 

18 part I of subchapter J, to or for the ben19 efit of such child if— 

20 ‘‘(I) such child or a family mem21 ber (within the meaning of section 

22 267(c)(4)) is an enrolled member of 

23 the tribe with respect to such Indian 

24 tribal government, and 


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1 ‘‘(II) such payment is made by 

2 reason of such enrollment. 

3 ‘‘(iii) CERTAIN PAYMENTS FROM NA4 TIVE CORPORATIONS OR SETTLEMENT

5 TRUSTS.—Any payment which is included 

6 in the gross income of such child and— 

7 ‘‘(I) made by a Native corpora8 tion (as defined in section 646(h)(2)) 

9 to or for the benefit of such child if 

10 such child or a family member (within 

11 the meaning of section 267(c)(4)) has 

12 an equity interest in the Native cor13 poration, or 

14 ‘‘(II) made by a Settlement 

15 Trust (as defined in section 

16 646(h)(4)) to or for the benefit of 

17 such child if such child or a family 

18 member (within the meaning of sec19 tion 267(c)(4)) has a beneficial inter20 est in such Settlement Trust. 

21 ‘‘(iv) ALASKA PERMANENT FUND

22 DIVIDENDS.—The amount of any Alaska 

23 Permanent Fund dividend which is in24 cluded in the gross income of such child.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2020. 

Æ 


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