112TH CONGRESS 

2D SESSION S. 3412 

AN ACT 

To amend the Internal Revenue Code of 1986 to provide 

tax relief to middle-class families. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2 

†S 3412 ES

1 SECTION 1. SHORT TITLE; ETC. 

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

3 ‘‘Middle Class Tax Cut Act’’. 

4 (b) AMENDMENT OF 1986 CODE.—Except as other5 wise expressly provided, whenever in this Act an amend6 ment or repeal is expressed in terms of an amendment 

7 to, or repeal of, a section or other provision, the reference 

8 shall be considered to be made to a section or other provi9 sion of the Internal Revenue Code of 1986. 

10 (c) TABLE OF CONTENTS.—The table of contents of 

11 this Act is as follows: 

Sec. 1. Short title; etc. 

TITLE I—TEMPORARY EXTENSION OF TAX RELIEF 

Sec. 101. Temporary extension of 2001 tax relief. 

Sec. 102. Temporary extension of 2003 tax relief. 

Sec. 103. Temporary extension of 2010 tax relief. 

Sec. 104. Temporary extension of election to expense certain depreciable business assets. 

TITLE II—ALTERNATIVE MINIMUM TAX RELIEF 

Sec. 201. Temporary extension of increased alternative minimum tax exemption 

amount. 

Sec. 202. Temporary extension of alternative minimum tax relief for nonrefundable personal credits. 

TITLE III—BUDGETARY EFFECTS 

Sec. 301. Budgetary effects. 

12 TITLE I—TEMPORARY 

13 EXTENSION OF TAX RELIEF 

14 SEC. 101. TEMPORARY EXTENSION OF 2001 TAX RELIEF. 

15 (a) TEMPORARY EXTENSION.— 

16 (1) IN GENERAL.—Section 901(a)(1) of the 

17 Economic Growth and Tax Relief Reconciliation Act 
3 

†S 3412 ES

1 of 2001 is amended by striking ‘‘December 31, 

2 2012’’ and inserting ‘‘December 31, 2013’’. 

3 (2) EFFECTIVE DATE.—The amendment made 

4 by this subsection shall take effect as if included in 

5 the enactment of the Economic Growth and Tax Re6 lief Reconciliation Act of 2001. 

7 (b) APPLICATION TO CERTAIN HIGH-INCOME TAX8 PAYERS.— 

9 (1) INCOME TAX RATES.— 

10 (A) TREATMENT OF 25- AND 28-PERCENT

11 RATE BRACKETS.—Paragraph (2) of section 

12 1(i) is amended to read as follows: 

13 ‘‘(2) 25- AND 28-PERCENT RATE BRACKETS.— 

14 The tables under subsections (a), (b), (c), (d), and 

15 (e) shall be applied— 

16 ‘‘(A) by substituting ‘25%’ for ‘28%’ each 

17 place it appears (before the application of sub18 paragraph (B)), and 

19 ‘‘(B) by substituting ‘28%’ for ‘31%’ each 

20 place it appears.’’. 

21 (B) 33-PERCENT RATE BRACKET.—Sub22 section (i) of section 1 is amended by redesig23 nating paragraph (3) as paragraph (4) and by 

24 inserting after paragraph (2) the following new 

25 paragraph: 
4 

†S 3412 ES

1 ‘‘(3) 33-PERCENT RATE BRACKET.— 

2 ‘‘(A) IN GENERAL.—In the case of taxable 

3 years beginning after December 31, 2012— 

4 ‘‘(i) the rate of tax under subsections 

5 (a), (b), (c), and (d) on a taxpayer’s tax6 able income in the fourth rate bracket shall 

7 be 33 percent to the extent such income 

8 does not exceed an amount equal to the ex9 cess of— 

10 ‘‘(I) the applicable amount, over 

11 ‘‘(II) the dollar amount at which 

12 such bracket begins, and 

13 ‘‘(ii) the 36 percent rate of tax under 

14 such subsections shall apply only to the 

15 taxpayer’s taxable income in such bracket 

16 in excess of the amount to which clause (i) 

17 applies. 

18 ‘‘(B) APPLICABLE AMOUNT.—For purposes 

19 of this paragraph, the term ‘applicable amount’ 

20 means the excess of— 

21 ‘‘(i) the applicable threshold, over 

22 ‘‘(ii) the sum of the following amounts 

23 in effect for the taxable year: 
5 

†S 3412 ES

1 ‘‘(I) the basic standard deduction 

2 (within the meaning of section 

3 63(c)(2)), and 

4 ‘‘(II) the exemption amount 

5 (within the meaning of section 

6 151(d)(1) (or, in the case of sub7 section (a), 2 such exemption 

8 amounts). 

9 ‘‘(C) APPLICABLE THRESHOLD.—For pur10 poses of this paragraph, the term ‘applicable 

11 threshold’ means— 

12 ‘‘(i) $250,000 in the case of sub13 section (a), 

14 ‘‘(ii) $225,000 in the case of sub15 section (b), 

16 ‘‘(iii) $200,000 in the case of sub17 sections (c), and 

‘‘(iv) 1 18 ⁄2 the amount applicable under 

19 clause (i) (after adjustment, if any, under 

20 subparagraph (E)) in the case of sub21 section (d). 

22 ‘‘(D) FOURTH RATE BRACKET.—For pur23 poses of this paragraph, the term ‘fourth rate 

24 bracket’ means the bracket which would (deter-
6 

†S 3412 ES

1 mined without regard to this paragraph) be the 

2 36-percent rate bracket. 

3 ‘‘(E) INFLATION ADJUSTMENT.—For pur4 poses of this paragraph, with respect to taxable 

5 years beginning in calendar years after 2012, 

6 each of the dollar amounts under clauses (i), 

7 (ii), and (iii) of subparagraph (C) shall be ad8 justed in the same manner as under paragraph 

9 (1)(C), except that subsection (f)(3)(B) shall be 

10 applied by substituting ‘2008’ for ‘1992’.’’. 

11 (2) PHASEOUT OF PERSONAL EXEMPTIONS AND

12 ITEMIZED DEDUCTIONS.— 

13 (A) OVERALL LIMITATION ON ITEMIZED

14 DEDUCTIONS.—Section 68 is amended— 

15 (i) by striking ‘‘the applicable 

16 amount’’ the first place it appears in sub17 section (a) and inserting ‘‘the applicable 

18 threshold in effect under section 1(i)(3)’’, 

19 (ii) by striking ‘‘the applicable 

20 amount’’ in subsection (a)(1) and inserting 

21 ‘‘such applicable threshold’’, 

22 (iii) by striking subsection (b) and re23 designating subsections (c), (d), and (e) as 

24 subsections (b), (c), and (d), respectively, 

25 and 
7 

†S 3412 ES

1 (iv) by striking subsections (f) and 

2 (g). 

3 (B) PHASEOUT OF DEDUCTIONS FOR PER4 SONAL EXEMPTIONS.— 

5 (i) IN GENERAL.—Paragraph (3) of 

6 section 151(d) is amended— 

7 (I) by striking ‘‘the threshold 

8 amount’’ in subparagraphs (A) and 

9 (B) and inserting ‘‘the applicable 

10 threshold in effect under section 

11 1(i)(3)’’, 

12 (II) by striking subparagraph (C) 

13 and redesignating subparagraph (D) 

14 as subparagraph (C), and 

15 (III) by striking subparagraphs 

16 (E) and (F). 

17 (ii) CONFORMING AMENDMENTS.— 

18 Paragraph (4) of section 151(d) is amend19 ed— 

20 (I) by striking subparagraph (B), 

21 (II) by redesignating clauses (i) 

22 and (ii) of subparagraph (A) as sub23 paragraphs (A) and (B), respectively, 

24 and by indenting such subparagraphs 

25 (as so redesignated) accordingly, and 
8 

†S 3412 ES

1 (III) by striking all that precedes 

2 ‘‘in a calendar year after 1989,’’ and 

3 inserting the following: 

4 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

5 any taxable year beginning’’. 

6 (c) EFFECTIVE DATE.—Except as otherwise pro7 vided, the amendments made by this section shall apply 

8 to taxable years beginning after December 31, 2012. 

9 (d) APPLICATION OF EGTRRA SUNSET.—Each 

10 amendment made by subsection (b) shall be subject to title 

11 IX of the Economic Growth and Tax Relief Reconciliation 

12 Act of 2001 to the same extent and in the same manner 

13 as if such amendment was included in title I of such Act. 

14 SEC. 102. TEMPORARY EXTENSION OF 2003 TAX RELIEF. 

15 (a) EXTENSION.— 

16 (1) IN GENERAL.—Section 303 of the Jobs and 

17 Growth Tax Relief Reconciliation Act of 2003 is 

18 amended by striking ‘‘December 31, 2012’’ and in19 serting ‘‘December 31, 2013’’. 

20 (2) EFFECTIVE DATE.—The amendment made 

21 by this subsection shall take effect as if included in 

22 the enactment of the Jobs and Growth Tax Relief 

23 Reconciliation Act of 2003. 

24 (b) 20-PERCENT CAPITAL GAINS RATE FOR CERTAIN

25 HIGH INCOME INDIVIDUALS.— 
9 

†S 3412 ES

1 (1) IN GENERAL.—Paragraph (1) of section 

2 1(h) is amended by striking subparagraph (C), by 

3 redesignating subparagraphs (D) and (E) as sub4 paragraphs (E) and (F) and by inserting after sub5 paragraph (B) the following new subparagraphs: 

6 ‘‘(C) 15 percent of the lesser of— 

7 ‘‘(i) so much of the adjusted net cap8 ital gain (or, if less, taxable income) as ex9 ceeds the amount on which a tax is deter10 mined under subparagraph (B), or 

11 ‘‘(ii) the excess (if any) of— 

12 ‘‘(I) the amount of taxable in13 come which would (without regard to 

14 this paragraph) be taxed at a rate 

15 below 36 percent, over 

16 ‘‘(II) the sum of the amounts on 

17 which a tax is determined under sub18 paragraphs (A) and (B), 

19 ‘‘(D) 20 percent of the adjusted net capital 

20 gain (or, if less, taxable income) in excess of the 

21 sum of the amounts on which tax is determined 

22 under subparagraphs (B) and (C),’’. 

23 (2) MINIMUM TAX.—Paragraph (3) of section 

24 55(b) is amended by striking subparagraph (C), by 

25 redesignating subparagraph (D) as subparagraph 
10 

†S 3412 ES

1 (E), and by inserting after subparagraph (B) the 

2 following new subparagraphs: 

3 ‘‘(C) 15 percent of the lesser of— 

4 ‘‘(i) so much of the adjusted net cap5 ital gain (or, if less, taxable excess) as ex6 ceeds the amount on which tax is deter7 mined under subparagraph (B), or 

8 ‘‘(ii) the excess described in section 

9 1(h)(1)(C)(ii), plus 

10 ‘‘(D) 20 percent of the adjusted net capital 

11 gain (or, if less, taxable excess) in excess of the 

12 sum of the amounts on which tax is determined 

13 under subparagraphs (B) and (C), plus’’. 

14 (c) CONFORMING AMENDMENTS.— 

15 (1) The following provisions are each amended 

16 by striking ‘‘15 percent’’ and inserting ‘‘20 per17 cent’’: 

18 (A) Section 531. 

19 (B) Section 541. 

20 (C) Section 1445(e)(1). 

21 (D) The second sentence of section 

22 7518(g)(6)(A). 

23 (E) Section 53511(f)(2) of title 46, United 

24 States Code. 
11 

†S 3412 ES

1 (2) Sections 1(h)(1)(B) and 55(b)(3)(B) are 

2 each amended by striking ‘‘5 percent (0 percent in 

3 the case of taxable years beginning after 2007)’’ and 

4 inserting ‘‘0 percent’’. 

5 (3) Section 1445(e)(6) is amended by striking 

6 ‘‘15 percent (20 percent in the case of taxable years 

7 beginning after December 31, 2010)’’ and inserting 

8 ‘‘20 percent’’. 

9 (d) EFFECTIVE DATES.— 

10 (1) IN GENERAL.—Except as otherwise pro11 vided, the amendments made by subsections (b) and 

12 (c) shall apply to taxable years beginning after De13 cember 31, 2012. 

14 (2) WITHHOLDING.—The amendments made by 

15 paragraphs (1)(C) and (3) of subsection (c) shall 

16 apply to amounts paid on or after January 1, 2013. 

17 (e) APPLICATION OF JGTRRA SUNSET.—Each 

18 amendment made by subsections (b) and (c) shall be sub19 ject to section 303 of the Jobs and Growth Tax Relief 

20 Reconciliation Act of 2003 to the same extent and in the 

21 same manner as if such amendment was included in title 

22 III of such Act. 

23 SEC. 103. TEMPORARY EXTENSION OF 2010 TAX RELIEF. 

24 (a) AMERICAN OPPORTUNITY TAX CREDIT.— 
12 

†S 3412 ES

1 (1) IN GENERAL.—Section 25A(i) is amended 

2 by striking ‘‘or 2012’’ and inserting ‘‘2012, or 

3 2013’’. 

4 (2) TREATMENT OF POSSESSIONS.—Section 

5 1004(c)(1) of division B of the American Recovery 

6 and Reinvestment Tax Act of 2009 is amended by 

7 striking ‘‘and 2012’’ each place it appears and in8 serting ‘‘2012, and 2013’’. 

9 (b) CHILD TAX CREDIT.—Section 24(d)(4) is amend10 ed— 

11 (1) by striking ‘‘AND 2012’’ in the heading and 

12 inserting ‘‘2012, AND 2013’’, and 

13 (2) by striking ‘‘or 2012’’ and inserting ‘‘2012, 

14 or 2013’’. 

15 (c) EARNED INCOME TAX CREDIT.—Section 32(b)(3) 

16 is amended— 

17 (1) by striking ‘‘AND 2012’’ in the heading and 

18 inserting ‘‘2012, AND 2013’’, and 

19 (2) by striking ‘‘or 2012’’ and inserting ‘‘2012, 

20 or 2013’’. 

21 (d) TEMPORARY EXTENSION OF RULE DIS22 REGARDING REFUNDS IN THE ADMINISTRATION OF FED23 ERAL PROGRAMS AND FEDERALLY ASSISTED PRO24 GRAMS.—Subsection (b) of section 6409 is amended by 
13 

†S 3412 ES

1 striking ‘‘December 31, 2012’’ and inserting ‘‘December 

2 31, 2013’’. 

3 (e) EFFECTIVE DATES.— 

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendments made by this section 

6 shall apply to taxable years beginning after Decem7 ber 31, 2012. 

8 (2) RULE DISREGARDING REFUNDS IN THE AD9 MINISTRATION OF CERTAIN PROGRAMS.—The 

10 amendment made by subsection (d) shall apply to 

11 amounts received after December 31, 2012. 

12 SEC. 104. TEMPORARY EXTENSION OF ELECTION TO EX13 PENSE CERTAIN DEPRECIABLE BUSINESS AS14 SETS. 

15 (a) IN GENERAL.— 

16 (1) DOLLAR LIMITATION.—Section 179(b)(1) is 

17 amended— 

18 (A) by striking ‘‘and’’ at the end of sub19 paragraph (C), 

20 (B) by redesignating subparagraph (D) as 

21 subparagraph (E), 

22 (C) by inserting after subparagraph (C) 

23 the following new subparagraph: 

24 ‘‘(D) $250,000 in the case of taxable years 

25 beginning in 2013, and’’, and 
14 

†S 3412 ES

1 (D) in subparagraph (E), as so redesig2 nated, by striking ‘‘2012’’ and inserting 

3 ‘‘2013’’. 

4 (2) REDUCTION IN LIMITATION.—Section 

5 179(b)(2) is amended— 

6 (A) by striking ‘‘and’’ at the end of sub7 paragraph (C), 

8 (B) by redesignating subparagraph (D) as 

9 subparagraph (E), 

10 (C) by inserting after subparagraph (C) 

11 the following new subparagraph: 

12 ‘‘(D) $800,000 in the case of taxable years 

13 beginning in 2013, and’’, and 

14 (D) in subparagraph (E), as so redesig15 nated, by striking ‘‘2012’’ and inserting 

16 ‘‘2013’’. 

17 (b) COMPUTER SOFTWARE.—Section 

18 179(d)(1)(A)(ii) is amended by striking ‘‘2013’’ and in19 serting ‘‘2014’’. 

20 (c) ELECTION.—Section 179(c)(2) is amended by 

21 striking ‘‘2013’’ and inserting ‘‘2014’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2012. 
15 

†S 3412 ES

1 TITLE II—ALTERNATIVE 

2 MINIMUM TAX RELIEF 

3 SEC. 201. TEMPORARY EXTENSION OF INCREASED ALTER4 NATIVE MINIMUM TAX EXEMPTION AMOUNT. 

5 (a) IN GENERAL.—Paragraph (1) of section 55(d) is 

6 amended— 

7 (1) by striking ‘‘$72,450’’ and all that follows 

8 through ‘‘2011’’ in subparagraph (A) and inserting 

9 ‘‘$78,750 in the case of taxable years beginning in 

10 2012’’, and 

11 (2) by striking ‘‘$47,450’’ and all that follows 

12 through ‘‘2011’’ in subparagraph (B) and inserting 

13 ‘‘$50,600 in the case of taxable years beginning in 

14 2012’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2011. 

18 SEC. 202. TEMPORARY EXTENSION OF ALTERNATIVE MIN19 IMUM TAX RELIEF FOR NONREFUNDABLE 

20 PERSONAL CREDITS. 

21 (a) IN GENERAL.—Paragraph (2) of section 26(a) is 

22 amended— 

23 (1) by striking ‘‘or 2011’’ and inserting ‘‘2011, 

24 or 2012’’, and 
16 

†S 3412 ES

1 (2) by striking ‘‘2011’’ in the heading thereof 

2 and inserting ‘‘2012’’. 

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

4 this section shall apply to taxable years beginning after 

5 December 31, 2011. 

6 TITLE III—BUDGETARY EFFECTS 

7 SEC. 301. BUDGETARY EFFECTS. 

8 (a) PAYGO SCORECARD.—The budgetary effects of 

9 this Act shall not be entered on either PAYGO scorecard 

10 maintained pursuant to section 4(d) of the Statutory Pay11 As-You-Go Act of 2010. 

12 (b) SENATE PAYGO SCORECARD.—The budgetary 

13 effects of this Act shall not be entered on any PAYGO 

14 scorecard maintained for purposes of section 201 of S. 

15 Con. Res. 21 (110th Congress). 

Passed the Senate July 25, 2012. 

Attest: 

Secretary. 

112TH CONGRESS 

2D SESSION S. 3412 

AN ACT 

To amend the Internal Revenue Code of 1986 to 

provide tax relief to middle-class families.