RECOUP Act of 2016

To amend the Internal Revenue Code of 1986 to provide for full recapture of the refundable credit for coverage under a qualified health plan in the case of individuals who are not lawfully present in the United States or who are incarcerated. 1. Short title This Act may be cited as the Recovering Erroneous Credits from Outlaws and Unlawful Persons Act of 2016 RECOUP Act of 2016 2. Recapture of refundable credit for coverage under a qualified health plan (a) In general Subsection (e) of section 36B (4) Recapture of improperly paid advance payments Notwithstanding subsection (f)(2)(B), if any advance payment is made under section 1412 of the Patient Protection and Affordable Care Act for a coverage month in a taxable year with respect to 1 or more individuals— (A) who are not lawfully present, or (B) who are incarcerated, other than incarceration pending the disposition of charges, the tax imposed by this chapter for the taxable year shall be increased by the total amount of such payment which is attributable to such individuals. The preceding sentence shall apply to a coverage month only if the individual is described in subparagraph (A) or (B) for the entire month. Subparagraph (B) shall apply without regard to whether the individual was incarcerated at the time of enrollment in the plan. . (b) Clarification of treatment of incarcerated individuals Subsection (e) of section 36B (1) by striking individuals not lawfully present certain ineligible individuals (2) by striking In general Individuals not lawfully present (3) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively, and (4) by inserting after paragraph (2) the following new paragraph: (3) Incarcerated individuals (A) In general If 1 or more individuals for whom a taxpayer is allowed a deduction under section 151 for the taxable year (including the taxpayer or the taxpayer's spouse) are incarcerated (other than incarceration pending the disposition of charges) during any coverage month in such year, the aggregate amount of premiums otherwise taken into account under clauses (i) and (ii) of subsection (b)(2)(A) shall be reduced by the portion (if any) of such premiums which is attributable to such individuals for such month. (B) Reporting with respect to prisoner information The determination of whether an individual is incarcerated for a coverage month shall be based on the information provided to the Secretary under section 6116. . (c) Conforming amendment Subparagraph (B) of section 36B(f)(2) (iii) Exception For taxpayers to whom this subparagraph does not apply, see subsection (f)(5). . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016.

Summary: Recovering Erroneous Credits from Outlaws and Unlawful Persons Act of 2016 or the RECOUP Act of 2016 This bill amends the Internal Revenue Code to provide for the full recapture of advance payments of refundable tax credits for health coverage under the Patient Protection and Affordable Care Act, if the payments were made to individuals who are not lawfully present in the United States or are incarcerated. The bill also specifies that the premiums of certain incarcerated individuals for whom a taxpayer is allowed a deduction for a personal exemption (including the taxpayer, the taxpayer's spouse, or dependents) must be excluded from calculations of premium assistance credit amounts.