II 

117TH CONGRESS 

2D SESSION S. 4060 

To amend the Internal Revenue Code of 1986 to provide for inflation rebates, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 7, 2022 

Mr. REED (for himself, Mr. WHITEHOUSE, Mrs. FEINSTEIN, and Mr. 

MERKLEY) 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 provide 

for inflation rebates, 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 ‘‘Food and Fuel Family 

5 Savings Act’’. 

6 SEC. 2. INFLATION REBATES TO INDIVIDUALS. 

7 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

8 Internal Revenue Code of 1986 is amended by inserting 

9 after section 6428B the following new section: 


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1 ‘‘SEC. 6428C. INFLATION REBATES TO INDIVIDUALS. 

2 ‘‘(a) IN GENERAL.—In the case of an eligible indi3 vidual, there shall be allowed as a credit against the tax 

4 imposed by subtitle A for the first taxable year beginning 

5 in 2022 an amount equal to the inflation rebate amount 

6 determined for such taxable year. 

7 ‘‘(b) INFLATION REBATE AMOUNT.—For purposes of 

8 this section, the term ‘inflation rebate amount’ means, 

9 with respect to any taxpayer for any taxable year, the sum 

10 of— 

11 ‘‘(1) $600 ($1,200 in the case of a joint re12 turn), plus 

13 ‘‘(2) $600 multiplied by the number of depend14 ents of the taxpayer for such taxable year. 

15 ‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 

16 section, the term ‘eligible individual’ means any individual 

17 other than— 

18 ‘‘(1) any nonresident alien individual, 

19 ‘‘(2) any individual who is a dependent of an20 other taxpayer for a taxable year beginning in the 

21 calendar year in which the individual’s taxable year 

22 begins, and 

23 ‘‘(3) an estate or trust. 

24 ‘‘(d) LIMITATION BASED ON ADJUSTED GROSS IN25 COME.— 


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

2 allowed by subsection (a) (determined without re3 gard to this subsection and subsection (f)) shall be 

4 reduced (but not below zero) by the amount which 

5 bears the same ratio to such credit (as so deter6 mined) as— 

7 ‘‘(A) the excess of— 

8 ‘‘(i) the taxpayer’s adjusted gross in9 come for such taxable year, over 

10 ‘‘(ii) $40,000, bears to 

11 ‘‘(B) $5,000. 

12 ‘‘(2) SPECIAL RULES.— 

13 ‘‘(A) JOINT RETURN OR SURVIVING

14 SPOUSE.—In the case of a joint return or a sur15 viving spouse (as defined in section 2(a)), para16 graph (1) shall be applied by substituting 

17 ‘$80,000’ for ‘$40,000’ and ‘$10,000’ for 

18 ‘$5,000’. 

19 ‘‘(B) HEAD OF HOUSEHOLD.—In the case 

20 of a head of household (as defined in section 

21 2(b)), paragraph (1) shall be applied by sub22 stituting ‘$60,000’ for ‘$40,000’ and ‘$7,500’ 

23 for ‘$5,000’. 

24 ‘‘(e) DEFINITIONS AND SPECIAL RULES.— 


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1 ‘‘(1) DEPENDENT DEFINED.—For purposes of 

2 this section, the term ‘dependent’ has the meaning 

3 given such term by section 152. 

4 ‘‘(2) IDENTIFICATION NUMBER REQUIRE5 MENT.— 

6 ‘‘(A) IN GENERAL.—In the case of a re7 turn other than a joint return, the $600 

8 amount in subsection (b)(1) shall be treated as 

9 being zero unless the taxpayer includes the 

10 valid identification number of the taxpayer on 

11 the return of tax for the taxable year. 

12 ‘‘(B) JOINT RETURNS.—In the case of a 

13 joint return, the $1,200 amount in subsection 

14 (b)(1) shall be treated as being— 

15 ‘‘(i) $600 if the valid identification 

16 number of only 1 spouse is included on the 

17 return of tax for the taxable year, and 

18 ‘‘(ii) zero if the valid identification 

19 number of neither spouse is so included. 

20 ‘‘(C) DEPENDENTS.—A dependent shall 

21 not be taken into account under subsection 

22 (b)(2) unless the valid identification number of 

23 such dependent is included on the return of tax 

24 for the taxable year. 

25 ‘‘(D) VALID IDENTIFICATION NUMBER.— 


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1 ‘‘(i) IN GENERAL.—For purposes of 

2 this paragraph, the term ‘valid identifica3 tion number’ means a social security num4 ber issued to an individual by the Social 

5 Security Administration on or before the 

6 due date for filing the return for the tax7 able year. 

8 ‘‘(ii) ADOPTION TAXPAYER IDENTI9 FICATION NUMBER.—For purposes of sub10 paragraph (C), in the case of a dependent 

11 who is adopted or placed for adoption, the 

12 term ‘valid identification number’ shall in13 clude the adoption taxpayer identification 

14 number of such dependent. 

15 ‘‘(E) SPECIAL RULE FOR MEMBERS OF

16 THE ARMED FORCES.—Subparagraph (B) shall 

17 not apply in the case where at least 1 spouse 

18 was a member of the Armed Forces of the 

19 United States at any time during the taxable 

20 year and the valid identification number of at 

21 least 1 spouse is included on the return of tax 

22 for the taxable year. 

23 ‘‘(F) COORDINATION WITH CERTAIN AD24 VANCE PAYMENTS.—In the case of any payment 

25 determined pursuant to subsection (g)(6), a 


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1 valid identification number shall be treated for 

2 purposes of this paragraph as included on the 

3 taxpayer’s return of tax if such valid identifica4 tion number is available to the Secretary as de5 scribed in such subsection. 

6 ‘‘(G) MATHEMATICAL OR CLERICAL ERROR

7 AUTHORITY.—Any omission of a correct valid 

8 identification number required under this para9 graph shall be treated as a mathematical or 

10 clerical error for purposes of applying section 

11 6213(g)(2) to such omission. 

12 ‘‘(3) CREDIT TREATED AS REFUNDABLE.—The 

13 credit allowed by subsection (a) shall be treated as 

14 allowed by subpart C of part IV of subchapter A of 

15 chapter 1. 

16 ‘‘(f) COORDINATION WITH ADVANCE REFUNDS OF

17 CREDIT.— 

18 ‘‘(1) REDUCTION OF REFUNDABLE CREDIT.— 

19 The amount of the credit which would (but for this 

20 paragraph) be allowable under subsection (a) shall 

21 be reduced (but not below zero) by the aggregate re22 funds and credits made or allowed to the taxpayer 

23 (or, except as otherwise provided by the Secretary, 

24 any dependent of the taxpayer) under subsection (g). 

25 Any failure to so reduce the credit shall be treated 


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1 as arising out of a mathematical or clerical error 

2 and assessed according to section 6213(b)(1). 

3 ‘‘(2) JOINT RETURNS.—Except as otherwise 

4 provided by the Secretary, in the case of a refund 

5 or credit made or allowed under subsection (g) with 

6 respect to a joint return, half of such refund or cred7 it shall be treated as having been made or allowed 

8 to each individual filing such return. 

9 ‘‘(3) COORDINATION WITH POSSESSIONS OF

10 THE UNITED STATES.—For purposes of this sub11 section, payments made under subsection (g) include 

12 payments made by any jurisdiction other than the 

13 United States under section 6428C(g) of the income 

14 tax law of such jurisdiction, and payments made by 

15 possessions to which section 2(b)(2) of the Food and 

16 Fuel Family Savings Act pursuant to a plan de17 scribed in such section. In carrying out this section, 

18 the Secretary shall coordinate with each possession 

19 of the United States to prevent any application of 

20 this paragraph that is inconsistent with the purposes 

21 of this subsection. 

22 ‘‘(g) ADVANCE REFUNDS AND CREDITS.— 

23 ‘‘(1) IN GENERAL.—Subject to paragraphs (5) 

24 and (6), each individual who was an eligible indi25 vidual for such individual’s first taxable year beginVerDate Sep 11 2014 22:51 Apr 11, 2022 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4060.IS S4060

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1 ning in 2020 shall be treated as having made a pay2 ment against the tax imposed by chapter 1 for such 

3 taxable year in an amount equal to the advance re4 fund amount for such taxable year. 

5 ‘‘(2) ADVANCE REFUND AMOUNT.— 

6 ‘‘(A) IN GENERAL.—For purposes of para7 graph (1), the advance refund amount is the 

8 amount that would have been allowed as a cred9 it under this section for such taxable year if 

10 this section (other than subsection (f) and this 

11 subsection) had applied to such taxable year. 

12 ‘‘(B) TREATMENT OF DECEASED INDIVID13 UALS.—For purposes of determining the ad14 vance refund amount with respect to such tax15 able year— 

16 ‘‘(i) any individual who was deceased 

17 before January 1, 2022, shall be treated 

18 for purposes of applying subsection (e)(2) 

19 in the same manner as if the valid identi20 fication number of such person was not in21 cluded on the return of tax for such tax22 able year (except that subparagraph (E) 

23 thereof shall not apply), 

24 ‘‘(ii) notwithstanding clause (i), in the 

25 case of a joint return with respect to which 


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1 only 1 spouse is deceased before January 

2 1, 2022, such deceased spouse was a mem3 ber of the Armed Forces of the United 

4 States at any time during the taxable year, 

5 and the valid identification number of such 

6 deceased spouse is included on the return 

7 of tax for the taxable year, the valid identi8 fication number of 1 (and only 1) spouse 

9 shall be treated as included on the return 

10 of tax for the taxable year for purposes of 

11 applying subsection (e)(2)(B) with respect 

12 to such joint return, and 

13 ‘‘(iii) no amount shall be determined 

14 under subsection (e)(2) with respect to any 

15 dependent of the taxpayer if the taxpayer 

16 (both spouses in the case of a joint return) 

17 was deceased before January 1, 2022. 

18 ‘‘(3) TIMING AND MANNER OF PAYMENTS.— 

19 ‘‘(A) TIMING.— 

20 ‘‘(i) IN GENERAL.—The Secretary 

21 shall, subject to the provisions of this title, 

22 refund or credit any overpayment attrib23 utable to this section as rapidly as pos24 sible. 


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1 ‘‘(ii) DEADLINE.—No refund or credit 

2 shall be made or allowed under this sub3 section after December 31, 2022. 

4 ‘‘(B) MANNER.— 

5 ‘‘(i) IN GENERAL.—Notwithstanding 

6 any other provision of law (including sec7 tion 913 of the Electronic Fund Transfer 

8 Act (15 U.S.C. 1693k)), the Secretary 

9 shall disburse refunds payable under this 

10 subsection by means of a Treasury-spon11 sored account (as defined in section 208.2 

12 of title 31, Code of Federal Regulations) 

13 which is limited to uses at grocery stores 

14 and for gasoline. 

15 ‘‘(ii) APPLICATION TO POSSES16 SIONS.—In the case of a possession de17 scribed in section 2(b)(1) of the Food and 

18 Fuel Family Savings Act, refunds payable 

19 under this subsection shall be disbursed in 

20 a manner determined by the Secretary, in 

21 consultation with the chief executive officer 

22 of such possession, to be best suited to 

23 meet the purposes of this section and, to 

24 the extent possible, subject to the same 


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1 limitations applicable to refunds made 

2 under clause (i). 

3 ‘‘(4) NO INTEREST.—No interest shall be al4 lowed on any overpayment attributable to this sub5 section. 

6 ‘‘(5) APPLICATION TO INDIVIDUALS WHO HAVE

7 FILED A RETURN OF TAX FOR 2021.— 

8 ‘‘(A) APPLICATION TO 2021 RETURNS

9 FILED AT TIME OF INITIAL DETERMINATION.— 

10 If, at the time of any determination made pur11 suant to paragraph (3), the individual referred 

12 to in paragraph (1) has filed a return of tax for 

13 the individual’s first taxable year beginning in 

14 2021, paragraph (1) shall be applied with re15 spect to such individual by substituting ‘2021’ 

16 for ‘2020’. 

17 ‘‘(B) ADDITIONAL PAYMENT.— 

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

19 individual who files, before the additional 

20 payment determination date, a return of 

21 tax for such individual’s first taxable year 

22 beginning in 2021, the Secretary shall 

23 make a payment (in addition to any pay24 ment made under paragraph (1)) to such 

25 individual equal to the excess (if any) of— 


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1 ‘‘(I) the amount which would be 

2 determined under paragraph (1) 

3 (after the application of subparagraph 

4 (A)) by applying paragraph (1) as of 

5 the additional payment determination 

6 date, over 

7 ‘‘(II) the amount of any payment 

8 made with respect to such individual 

9 under paragraph (1). 

10 ‘‘(ii) ADDITIONAL PAYMENT DETER11 MINATION DATE.—The term ‘additional 

12 payment determination date’ means the 

13 earlier of— 

14 ‘‘(I) the date which is 90 days 

15 after the 2021 calendar year filing 

16 deadline, or 

17 ‘‘(II) September 1, 2022. 

18 ‘‘(iii) 2021 CALENDAR YEAR FILING

19 DEADLINE.—The term ‘2021 calendar year 

20 filing deadline’ means the date specified in 

21 section 6072(a) with respect to returns for 

22 calendar year 2021. 

23 ‘‘(6) APPLICATION TO CERTAIN INDIVIDUALS

24 WHO HAVE NOT FILED A RETURN OF TAX FOR 2020

25 OR 2021 AT TIME OF DETERMINATION.—In the case 


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1 of any individual who, at the time of any determina2 tion made pursuant to paragraph (3), has filed a tax 

3 return for neither the year described in paragraph 

4 (1) nor for the year described in paragraph (5)(A), 

5 the Secretary shall, consistent with rules similar to 

6 the rules of section 6428A(f)(5), apply paragraph 

7 (1) on the basis of information available to the Sec8 retary and shall, on the basis of such information, 

9 determine the advance refund amount with respect 

10 to such individual without regard to subsection (d) 

11 unless the Secretary has reason to know that such 

12 amount would otherwise be reduced by reason of 

13 such subsection. 

14 ‘‘(7) SPECIAL RULE RELATED TO TIME OF FIL15 ING RETURN.—Solely for purposes of this sub16 section, a return of tax shall not be treated as filed 

17 until such return has been processed by the Internal 

18 Revenue Service. 

19 ‘‘(h) REGULATIONS.—The Secretary shall prescribe 

20 such regulations or other guidance as may be necessary 

21 or appropriate to carry out the purposes of this section, 

22 including— 

23 ‘‘(1) regulations or other guidance providing 

24 taxpayers the opportunity to provide the Secretary 

25 information sufficient to allow the Secretary to make 


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1 payments to such taxpayers under subsection (g) 

2 (including the determination of the amount of such 

3 payment) if such information is not otherwise avail4 able to the Secretary, and 

5 ‘‘(2) regulations or other guidance to ensure to 

6 the maximum extent administratively practicable 

7 that, in determining the amount of any credit under 

8 subsection (a) and any credit or refund under sub9 section (g), an individual is not taken into account 

10 more than once, including by different taxpayers and 

11 including by reason of a change in joint return sta12 tus or dependent status between the taxable year for 

13 which an advance refund amount is determined and 

14 the taxable year for which a credit under subsection 

15 (a) is determined. 

16 ‘‘(i) OUTREACH.—The Secretary shall carry out a ro17 bust and comprehensive outreach program to ensure that 

18 all taxpayers described in subsection (h)(1) learn of their 

19 eligibility for the advance refunds and credits under sub20 section (g); are advised of the opportunity to receive such 

21 advance refunds and credits as provided under subsection 

22 (h)(1); and are provided assistance in applying for such 

23 advance refunds and credits.’’. 

24 (b) TREATMENT OF CERTAIN POSSESSIONS.— 


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1 (1) PAYMENTS TO POSSESSIONS WITH MIRROR

2 CODE TAX SYSTEMS.—The Secretary of the Treas3 ury shall pay to each possession of the United States 

4 which has a mirror code tax system amounts equal 

5 to the loss (if any) to that possession by reason of 

6 the amendments made by this section. Such 

7 amounts shall be determined by the Secretary of the 

8 Treasury based on information provided by the gov9 ernment of the respective possession. 

10 (2) PAYMENTS TO OTHER POSSESSIONS.—The 

11 Secretary of the Treasury shall pay to each posses12 sion of the United States which does not have a mir13 ror code tax system amounts estimated by the Sec14 retary of the Treasury as being equal to the aggre15 gate benefits (if any) that would have been provided 

16 to residents of such possession by reason of the 

17 amendments made by this section if a mirror code 

18 tax system had been in effect in such possession. 

19 The preceding sentence shall not apply unless the re20 spective possession has a plan, which has been ap21 proved by the Secretary of the Treasury, under 

22 which such possession will promptly distribute such 

23 payments to its residents. 

24 (3) INCLUSION OF ADMINISTRATIVE EX25 PENSES.—The Secretary of the Treasury shall pay 


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1 to each possession of the United States to which the 

2 Secretary makes a payment under paragraph (1) or 

3 (2) an amount equal to the lesser of— 

4 (A) the increase (if any) of the administra5 tive expenses of such possession— 

6 (i) in the case of a possession de7 scribed in paragraph (1), by reason of the 

8 amendments made by this section, and 

9 (ii) in the case of a possession de10 scribed in paragraph (2), by reason of car11 rying out the plan described in such para12 graph, or 

13 (B) $500,000 ($10,000,000 in the case of 

14 Puerto Rico). 

15 The amount described in subparagraph (A) shall be 

16 determined by the Secretary of the Treasury based 

17 on information provided by the government of the 

18 respective possession. 

19 (4) COORDINATION WITH CREDIT ALLOWED

20 AGAINST UNITED STATES INCOME TAXES.—No cred21 it shall be allowed against United States income 

22 taxes under section 6428C of the Internal Revenue 

23 Code of 1986 (as added by this section), nor shall 

24 any credit or refund be made or allowed under sub25 section (g) of such section, to any person— 


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1 (A) to whom a credit is allowed against 

2 taxes imposed by the possession by reason of 

3 the amendments made by this section, or 

4 (B) who is eligible for a payment under a 

5 plan described in paragraph (2). 

6 (5) MIRROR CODE TAX SYSTEM.—For purposes 

7 of this subsection, the term ‘‘mirror code tax sys8 tem’’ means, with respect to any possession of the 

9 United States, the income tax system of such posses10 sion if the income tax liability of the residents of 

11 such possession under such system is determined by 

12 reference to the income tax laws of the United 

13 States as if such possession were the United States. 

14 (6) TREATMENT OF PAYMENTS.—For purposes 

15 of section 1324 of title 31, United States Code, the 

16 payments under this subsection shall be treated in 

17 the same manner as a refund due from a credit pro18 vision referred to in subsection (b)(2) of such sec19 tion. 

20 (c) ADMINISTRATIVE PROVISIONS.— 

21 (1) DEFINITION OF DEFICIENCY.—Section 

22 6211(b)(4)(A) of the Internal Revenue Code of 1986 

23 is amended by inserting ‘‘6428C,’’ after ‘‘6428B,’’. 

24 (2) EXCEPTION FROM REDUCTION OR OFF25 SET.—Any refund payable by reason of section 


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1 6428C(g) of the Internal Revenue Code of 1986 (as 

2 added by this section), or any such refund payable 

3 by reason of subsection (b) of this section, shall not 

4 be— 

5 (A) subject to reduction or offset pursuant 

6 to subsection (c), (d), (e), or (f) of section 6402 

7 of the Internal Revenue Code of 1986 or any 

8 similar authority permitting offset, or 

9 (B) reduced or offset by other assessed 

10 Federal taxes that would otherwise be subject 

11 to levy or collection. 

12 (3) CONFORMING AMENDMENTS.— 

13 (A) Paragraph (2) of section 1324(b) of 

14 title 31, United States Code, is amended by in15 serting ‘‘6428C,’’ after ‘‘6428B,’’. 

16 (B) The table of sections for subchapter B 

17 of chapter 65 of the Internal Revenue Code of 

18 1986 is amended by inserting after the item re19 lating to section 6428B the following new item: 

‘‘Sec. 6428C. Inflation rebates to individuals.’’. 

20 (d) OTHER PROVISIONS.— 

21 (1) EXCEPTION FROM REDUCTION OR OFF22 SET.— 

23 (A) IN GENERAL.—The right of any per24 son to any applicable payment under this sec25 tion shall not be transferable or assignable, at 


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1 law or in equity, and no applicable payment 

2 shall be subject to, execution, levy, attachment, 

3 garnishment, or other legal process, or the op4 eration of any bankruptcy or insolvency law. 

5 (B) APPLICABLE PAYMENT.— For pur6 poses of this subsection, the term ‘‘applicable 

7 payment’’means— 

8 (i) any advance refund amount paid 

9 pursuant to section 6428C(g) of Internal 

10 Revenue Code of 1986 (as added by this 

11 section), 

12 (ii) any payment made by a posses13 sion of the United States with a mirror 

14 code tax system (as defined in subsection 

15 (b) of this section) pursuant to such sub16 section which corresponds to a payment 

17 described in clause (i), and 

18 (iii) any payment made by a posses19 sion of the United States without a mirror 

20 code tax system (as so defined) pursuant 

21 to subsection (b) of this section. 

22 (2) AGENCY INFORMATION SHARING AND AS23 SISTANCE.— 

24 (A) IN GENERAL.—The Commissioner of 

25 Social Security, the Railroad Retirement Board, 


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1 and the Secretary of Veterans Affairs shall each 

2 provide the Secretary of the Treasury (or the 

3 Secretary’s delegate) such information and as4 sistance as the Secretary of the Treasury (or 

5 the Secretary’s delegate) may require for pur6 poses of— 

7 (i) making payments under section 

8 6428C(g) of the Internal Revenue Code of 

9 1986 to individuals described in section 

10 6428A(f)(5)(A) thereof, or 

11 (ii) providing administrative assist12 ance to a possession of the United States 

13 to allow such possession to promptly dis14 tribute payments under subsection (b) to 

15 its residents. 

16 (B) EXCHANGE OF INFORMATION WITH

17 POSSESSIONS.—Any information provided to the 

18 Secretary of the Treasury (or the Secretary’s 

19 delegate) pursuant to subparagraph may be ex20 changed with a possession of the United States 

21 in accordance with the applicable tax coordina22 tion agreement for information exchange and 

23 administrative assistance that the Internal Rev24 enue Service has agreed to with such posses25 sion. 


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1 (e) APPROPRIATIONS.— 

2 (1) IN GENERAL.—Immediately upon the enact3 ment of this Act, in addition to amounts otherwise 

4 available, there are appropriated for fiscal year 

5 2022, out of any money in the Treasury not other6 wise appropriated: 

7 (A) $1,464,500,000 to remain available 

8 until September 30, 2024 for necessary ex9 penses for the Internal Revenue Service for the 

10 administration of the advance payments, the 

11 provision of taxpayer assistance, and the fur12 therance of integrated, modernized, and secure 

13 Internal Revenue Service systems, of which up 

14 to $20,000,000 is available for premium pay for 

15 services related to the development of informa16 tion technology as determined by the Commis17 sioner of the Internal Revenue occurring be18 tween January 1, 2022 and December 31, 

19 2023, and all of which shall supplement and not 

20 supplant any other appropriations that may be 

21 available for this purpose. 

22 (B) $7,000,000 to remain available with23 out fiscal year limitation, for necessary ex24 penses for the Bureau of the Fiscal Service to 

25 carry out this section (and the amendments 


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1 made by this section), which shall supplement 

2 and not supplant any other appropriations that 

3 may be available for this purpose, and 

4 (C) $8,000,000 to remain available until 

5 September 30, 2024, for the Treasury Inspector 

6 General for Tax Administration for the pur7 poses of overseeing activities related to the ad8 ministration of this section (and the amend9 ments made by this section), which shall sup10 plement and not supplant any other appropria11 tions that may be available for this purpose. 

12 (2) SOCIAL SECURITY ADMINISTRATION.—For 

13 an additional amount for ‘‘Social Security Adminis14 tration— Limitation on Administrative Expenses’’, 

15 $38,000,000, to remain available until September 

16 30, 2023. 

17 (3) RAILROAD RETIREMENT BOARD.—For an 

18 additional amount for ‘‘Railroad Retirement 

19 Board—Limitation on Administration’’, $8,300, to 

20 remain available until September 30, 2023. 

21 SEC. 3. SURCHARGE ON HIGH INCOME INDIVIDUALS, ES22 TATES, AND TRUSTS. 

23 (a) IN GENERAL.—Part I of subchapter A of chapter 

24 1 of the Internal Revenue Code of 1986 is amended by 

25 inserting after section 1 the following new section: 


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1 ‘‘SEC. 1A. SURCHARGE ON HIGH INCOME INDIVIDUALS, ES2 TATES, AND TRUSTS. 

3 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

4 other than a corporation, there is hereby imposed (in addi5 tion to any other tax imposed by this subtitle) a tax equal 

6 to the sum of— 

7 ‘‘(1) 5 percent of so much of the modified ad8 justed gross income of the taxpayer as exceeds— 

9 ‘‘(A) $10,000,000, in the case of any tax10 payer not described in subparagraph (B) or 

11 (C), 

12 ‘‘(B) $5,000,000, in the case of a married 

13 individual filing a separate return, and 

14 ‘‘(C) $200,000, in the case of an estate or 

15 trust, plus 

16 ‘‘(2) 3 percent of so much of the modified ad17 justed gross income of the taxpayer as exceeds— 

18 ‘‘(A) $25,000,000, in the case of any tax19 payer not described in subparagraph (B) or 

20 (C), 

21 ‘‘(B) $12,500,000, in the case of a married 

22 individual filing a separate return, and 

23 ‘‘(C) $500,000, in the case of an estate or 

24 trust. 

25 ‘‘(b) MODIFIED ADJUSTED GROSS INCOME.—For 

26 purposes of this section, the term ‘modified adjusted gross 


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1 income’ means adjusted gross income reduced by any de2 duction (not taken into account in determining adjusted 

3 gross income) allowed for investment interest (as defined 

4 in section 163(d)) or business interest (as defined in sec5 tion 163(j)). In the case of an estate or trust, adjusted 

6 gross income shall be determined as provided in section 

7 67(e), and reduced by the amount allowed as a deduction 

8 under section 642(c). 

9 ‘‘(c) SPECIAL RULES.— 

10 ‘‘(1) NONRESIDENT ALIENS AND FOREIGN

11 TRUSTS.—In the case of a nonresident alien indi12 vidual (other than an individual described in section 

13 876(a) or 877(a)) or a foreign trust, only amounts 

14 taken into account in connection with the tax im15 posed under section 871(b) shall be taken into ac16 count under this section. 

17 ‘‘(2) CITIZENS AND RESIDENTS LIVING ABROAD

18 AND CERTAIN BONA FIDE RESIDENTS OF POSSES19 SIONS.—Each dollar amount which is applicable to 

20 any taxpayer under subsection (a) shall be decreased 

21 (but not below zero) by the excess (if any) of— 

22 ‘‘(A) the sum of— 

23 ‘‘(i) amounts excluded from the tax24 payer’s gross income under section 911, 


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1 ‘‘(ii) amounts excluded from the tax2 payer’s gross income under section 931, 

3 and 

4 ‘‘(iii) amounts excluded from the tax5 payer’s gross income under section 933, 

6 over 

7 ‘‘(B) the sum of— 

8 ‘‘(i) amounts of any deductions or ex9 clusions disallowed under section 911(d)(6) 

10 with respect to the amounts described in 

11 subparagraph (A)(i), 

12 ‘‘(ii) amounts of any deductions or ex13 clusions disallowed under section 931(b) 

14 with respect to the amounts described in 

15 subparagraph (A)(ii), and 

16 ‘‘(iii) amounts of any deductions or 

17 exclusions disallowed under section 933 

18 with respect to the amounts described in 

19 subparagraph (A)(iii). 

20 ‘‘(3) CERTAIN TRUSTS.—Subsection (a) shall 

21 not apply to— 

22 ‘‘(A) a trust all the unexpired interests in 

23 which are devoted to one or more of the pur24 poses described in section 170(c)(2)(B), 


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1 ‘‘(B) an electing settlement trust (as de2 fined in section 646(h)), or 

3 ‘‘(C) a cemetery perpetual care fund de4 scribed in section 642(i). 

5 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

6 CHAPTER FOR CERTAIN PURPOSES.—The tax im7 posed under this section shall not be treated as tax 

8 imposed by this chapter for purposes of determining 

9 the amount of any credit under this chapter (other 

10 than sections 27 and 901). 

11 ‘‘(5) ELECTING SMALL BUSINESS TRUSTS.—For 

12 purposes of the determination of adjusted gross in13 come, section 641(c)(1)(A) shall not apply and all 

14 portions of any electing small business trust shall be 

15 treated as a single trust. 

16 ‘‘(d) REGULATIONS.—The Secretary shall issue such 

17 regulations or other guidance as may be necessary or ap18 propriate to carry out the purposes of this section, includ19 ing regulations or other guidance to prevent the avoidance 

20 of the purposes of this section.’’. 

21 (b) COORDINATION WITH CERTAIN PROVISIONS.— 

22 (1) INTEREST ON CERTAIN DEFERRED TAX LI23 ABILITY.—Section 453A(c) of the Internal Revenue 

24 Code of 1986 is amended by redesignating paraVerDate Sep 11 2014 22:51 Apr 11, 2022 Jkt 029200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S4060.IS S4060

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1 graph (6) as paragraph (7) and by inserting after 

2 paragraph (5) the following new paragraph: 

3 ‘‘(6) SURCHARGE ON HIGH INCOME INDIVID4 UALS TAKEN INTO ACCOUNT IN DETERMINING MAX5 IMUM RATE OF TAX.—For purposes of paragraph 

6 (3)(B), the maximum rate of tax in effect under sec7 tion 1 shall be treated as being equal to the sum of 

8 such rate and the rates in effect under paragraphs 

9 (1) and (2) of section 1A(a).’’. 

10 (2) ALIEN RESIDENTS OF PUERTO RICO, GUAM, 

11 AMERICAN SAMOA, OR THE NORTHERN MARIANA IS12 LANDS.—Section 876(a) of such Code is amended by 

13 striking section 1 and inserting ‘‘sections 1 and 1A’’. 

14 (3) EXPATRIATION TO AVOID TAX.—Section 

15 877(b) of such Code is amended by inserting ‘‘and 

16 section 1A’’ after ‘‘section 1 or 55’’. 

17 (4) LIMITATION ON FOREIGN TAX CREDIT.— 

18 Section 904(b)(3)(E) of such Code is amended— 

19 (A) in clause (i)(I), by inserting ‘‘increased 

20 by the sum of the rates set forth in paragraphs 

21 (1) and (2) of section 1A(a)’’ after ‘‘(whichever 

22 applies)’’, 

23 (B) in clause (i)(II) by inserting ‘‘in24 creased by the sum of the rates set forth in 


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1 paragraphs (1) and (2) of section 1A(a)’’ after 

2 ‘‘section 1(h)’’, and 

3 (C) in clause (ii), by striking ‘‘referred to 

4 in’’ and inserting ‘‘determined under’’. 

5 (5) ELECTION BY INDIVIDUALS TO BE SUBJECT

6 TO TAX AT CORPORATE RATES.—Section 962(a)(1) 

7 of such Code is amended by inserting ‘‘, 1A,’’ after 

8 ‘‘sections 1’’. 

9 (6) INTEREST ON CERTAIN TAX DEFERRAL.— 

10 Section 1291(c)(2) of such Code is amended by add11 ing at the end the following: ‘‘For purposes of the 

12 preceding sentence, the highest rate of tax in effect 

13 under section 1 shall be treated as being equal to 

14 the sum of such rate and the rates in effect under 

15 paragraphs (1) and (2) of section 1A(a).’’. 

16 (7) AVERAGING OF FARM INCOME.—Section 

17 1301(a) of such Code is amended by striking ‘‘sec18 tion 1’’ both places it appears and inserting ‘‘sec19 tions 1 and 1A’’. 

20 (8) TITLE 11 CASES.—Section 1398(c)(2) of 

21 such Code is amended by inserting ‘‘and tax shall be 

22 imposed under section 1A by treating the estate as 

23 a married individual filing a separate return’’ before 

24 the period at the end. 


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1 (9) WITHHOLDING OF TAX ON FOREIGN PART2 NERS’ SHARE OF EFFECTIVELY CONNECTED IN3 COME.—Section 1446(b)(2) of such Code is amended 

4 by adding at the end the following flush sentence: 

5 ‘‘For purposes of subparagraph (A), the highest rate 

6 of tax in effect under section 1 shall be treated as 

7 being equal to the sum of such rate and the rates 

8 in effect under paragraphs (1) and (2) of section 

9 1A(a).’’. 

10 (10) RELIEF FROM JOINT AND SEVERAL LI11 ABILITY ON JOINT RETURN.—Section 6015(d)(2)(B) 

12 of such Code is amended by inserting ‘‘, 1A,’’ after 

13 ‘‘section 1’’. 

14 (11) PARTNERSHIP ADJUSTMENTS.— 

15 (A) Section 6225(b)(1) of such Code is 

16 amended by adding at the end the following 

17 flush sentence: 

18 ‘‘For purposes of subparagraph (B), the highest rate 

19 of tax in effect under section 1 shall be treated as 

20 being equal to the sum of such rate and the rates 

21 in effect under paragraphs (1) and (2) of section 

22 1A(a).’’. 

23 (B) Section 6225(c)(4)(A) of such Code is 

24 amended— 


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1 (i) by striking ‘‘subsection (b)(1)(A)’’ 

2 and inserting ‘‘subsection (b)(1)(B)’’, and 

3 (ii) by striking ‘‘or’’ at the end of 

4 clause (i), by adding ‘‘or’’ at the end of 

5 clause (ii), and by inserting after clause 

6 (ii) the following new clause: 

7 ‘‘(iii) is not an individual subject to 

8 one or both of the rates of tax in effect 

9 under paragraphs (1) and (2) of section 

10 1A(a),’’. 

11 (12) REQUIRED PAYMENTS FOR ENTITIES

12 ELECTING NOT TO HAVE REQUIRED TAXABLE

13 YEAR.—Section 7519(b) of such Code is amended by 

14 inserting ‘‘and increased by the sum of the rates in 

15 effect under paragraphs (1) and (2) of section 

16 1A(a)’’ before the period at the end. 

17 (c) CLERICAL AMENDMENT.—The table of sections 

18 for part I of subchapter A of chapter 1 of such Code is 

19 amended by inserting after the item relating to section 1 

20 the following new item: 

‘‘Sec. 1A. Surcharge on high income individuals.’’. 

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

22 this section shall apply to taxable years beginning after 

23 December 31, 2021. 


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1 SEC. 4. MODIFICATION OF CORPORATE TAX RATE. 

2 (a) IN GENERAL.—Section 11(b) of the Internal Rev3 enue Code of 1986 is amended to read as follows: 

4 ‘‘(b) AMOUNT OF TAX.— 

5 ‘‘(1) IN GENERAL.—The amount of the tax im6 posed by subsection (a) shall be the sum of— 

7 ‘‘(A) 18 percent of so much of the taxable 

8 income as does not exceed $400,000, 

9 ‘‘(B) 21 percent of so much of the taxable 

10 income as exceeds $400,000 but does not ex11 ceed $5,000,000, and 

12 ‘‘(C) 26.5 percent of so much of the tax13 able income as exceeds $5,000,000. 

14 In the case of a corporation which has taxable in15 come in excess of $10,000,000 for any taxable year, 

16 the amount of tax determined under the preceding 

17 sentence for such taxable year shall be increased by 

18 the lesser of (i) 3 percent of such excess, or (ii) 

19 $287,000. 

20 ‘‘(2) CERTAIN PERSONAL SERVICE CORPORA21 TION NOT ELIGIBLE FOR GRADUATED RATES.—Not22 withstanding paragraph (1), the amount of the tax 

23 imposed by subsection (a) on the taxable income of 

24 a qualified personal service corporation (as defined 

25 in section 448(d)(2)) shall be equal to 26.5 percent 

26 of the taxable income.’’. 


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1 (b) CONFORMING AMENDMENTS.— 

2 (1) Section 1561 of the Internal Revenue Code 

3 of 1986 is amended to read as follows: 

4 ‘‘SEC. 1561. LIMITATION ON CERTAIN MULTIPLE TAX BENE5 FITS IN THE CASE OF CERTAIN CONTROLLED 

6 CORPORATIONS. 

7 ‘‘(a) IN GENERAL.—The component members of a 

8 controlled group of corporations on a December 31 shall, 

9 for their taxable years which include such December 31, 

10 be limited for purposes of this subtitle to— 

11 ‘‘(1) amounts in each taxable income bracket in 

12 the subparagraphs of section 11(b)(1) which do not 

13 aggregate more than the maximum amount in each 

14 such bracket to which a corporation which is not a 

15 component member of a controlled group is entitled, 

16 and 

17 ‘‘(2) one $250,000 ($150,000 if any component 

18 member is a corporation described in section 

19 535(c)(2)(B)) amount for purposes of computing the 

20 accumulated earnings credit under section 535(c)(2) 

21 and (3). 

22 The amounts specified in paragraph (1) shall be divided 

23 equally among the component members of such group on 

24 such December 31 unless all of such component members 

25 consent (at such time and in such manner as the Secretary 


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1 shall by regulations prescribe) to an apportionment plan 

2 providing for an unequal allocation of such amounts. The 

3 amounts specified in paragraph (2) shall be divided equal4 ly among the component members of such group on such 

5 December 31 unless the Secretary prescribes regulations 

6 permitting an unequal allocation of such amounts. Not7 withstanding paragraph (1), in applying the last sentence 

8 of section 11(b)(1) to such component members, the tax9 able income of all such component members shall be taken 

10 into account and any increase in tax under such last sen11 tence shall be divided among such component members in 

12 the same manner as amounts under paragraph (1). 

13 ‘‘(b) CERTAIN SHORT TAXABLE YEARS.—If a cor14 poration has a short taxable year which does not include 

15 a December 31 and is a component member of a controlled 

16 group of corporations with respect to such taxable year, 

17 then for purposes of this subtitle— 

18 ‘‘(1) the amount in each taxable income bracket 

19 in the tax table in section 11(b) of such corporation 

20 for such taxable year, and 

21 ‘‘(2) the amount to be used in computing the 

22 accumulated earnings credit under section 535(c)(2) 

23 and (3) of such corporation for such taxable year, 

24 shall be the amount specified in subsection (a)(1) or (2), 

25 as the case may be, divided by the number of corporations 


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1 which are component members of such group on the last 

2 day of such taxable year. For purposes of the preceding 

3 sentence, section 1563(b) shall be applied as if such last 

4 day were substituted for ‘December 31’.’’. 

5 (2) The table of sections for part II of sub6 chapter B of chapter 6 of such Code is amended by 

7 striking the item relating to section 1561 and insert8 ing the following: 

‘‘Sec. 1561. Limitation on certain multiple tax benefits in the case of certain 

controlled corporations.’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2021. 

12 (d) NORMALIZATION REQUIREMENTS.— 

13 (1) IN GENERAL.—A normalization method of 

14 accounting shall not be treated as being used with 

15 respect to any public utility property for purposes of 

16 section 167 or 168 of the Internal Revenue Code of 

17 1986 if the taxpayer, in computing its cost of service 

18 for ratemaking purposes and reflecting operating re19 sults in its regulated books of account, reduces the 

20 tax reserve deficit less rapidly or to a lesser extent 

21 than such reserve would be reduced under the aver22 age rate assumption method. 


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1 (2) ALTERNATIVE METHOD FOR CERTAIN TAX2 PAYERS.—If, as of the first day of the taxable year 

3 that includes the date of enactment of this Act— 

4 (A) the taxpayer was required by a regu5 latory agency to compute depreciation for public 

6 utility property on the basis of an average life 

7 or composite rate method, and 

8 (B) the taxpayer’s books and underlying 

9 records did not contain the vintage account 

10 data necessary to apply the average rate as11 sumption method, 

12 the taxpayer will be treated as using a normalization 

13 method of accounting if, with respect to such juris14 diction, the taxpayer uses the alternative method for 

15 public utility property that is subject to the regu16 latory authority of that jurisdiction. 

17 (3) DEFINITIONS.—For purposes of this sub18 section— 

19 (A) TAX RESERVE DEFICIT.—The term 

20 ‘‘tax reserve deficit’’ means the excess of— 

21 (i) the amount which would be the 

22 balance in the reserve for deferred taxes 

23 (as described in section 168(i)(9)(A)(ii) of 

24 the Internal Revenue Code of 1986, or sec25 tion 167(l)(3)(G)(ii) or 168(3)(3)(B)(ii) of 


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1 such Code as in effect on the day before 

2 the date of the enactment of the Tax Re3 form Act of 1986) if the amount of such 

4 reserve were determined by assuming that 

5 the corporate rate increases provided in 

6 the amendments made by this section were 

7 in effect for all prior periods, over 

8 (ii) the balance in such reserve as of 

9 the day before such corporate rate in10 creases take effect. 

11 (B) AVERAGE RATE ASSUMPTION METH12 OD.—The average rate assumption method is 

13 the method under which the tax reserve deficit 

14 is reduced over the remaining lives of the prop15 erty as used in its regulated books of account 

16 which gave rise to the reserve for deferred 

17 taxes. Under such method, if timing differences 

18 for the property reverse, the amount of the ad19 justment to the reserve for the deferred taxes is 

20 calculated by multiplying— 

21 (i) the ratio of the aggregate deferred 

22 taxes for the property to the aggregate 

23 timing differences for the property as of 

24 the beginning of the period in question, by 


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1 (ii) the amount of the timing dif2 ferences which reverse during such period. 

3 (C) ALTERNATIVE METHOD.—The ‘‘alter4 native method’’ is the method in which the tax5 payer— 

6 (i) computes the tax reserve deficit on 

7 all public utility property included in the 

8 plant account on the basis of the weighted 

9 average life or composite rate used to com10 pute depreciation for regulatory purposes, 

11 and 

12 (ii) reduces the tax reserve deficit rat13 ably over the remaining regulatory life of 

14 the property. 

15 (4) TREATMENT OF NORMALIZATION VIOLA16 TION.—If, for any taxable year ending after the date 

17 of the enactment of this Act, the taxpayer does not 

18 use a normalization method of accounting for the 

19 corporate rate increases provided in the amendments 

20 made by this section , such taxpayer shall not be 

21 treated as using a normalization method of account22 ing for purposes of subsections (f)(2) and (i)(9)(C) 

23 of section 168 of the Internal Revenue Code of 

24 1986. 


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1 (5) REGULATIONS.—The Secretary of the 

2 Treasury, or the Secretary’s designee, shall issue 

3 such regulations or other guidance as may be nec4 essary or appropriate to carry out the purposes of 

5 this subsection, including regulations or other guid6 ance to provide appropriate coordination between 

7 this subsection, section 13001(d) of Public Law 

8 115–97, and section 203(e) of the Tax Reform Act 

9 of 1986. 

Æ 


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