Permanent Extension of Rate Cuts and Extension of National Tax Simplification Act of 2022

To amend the Internal Revenue Code of 1986 to make permanent certain provisions of Public Law 115–97 1. Short title This Act may be cited as the Permanent Extension of Rate Cuts and Extension of National Tax Simplification Act of 2022 PERCENTS Act of 2022 2. Modification of rates (a) Amendment of 1986 code Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (b) Married individuals filing joint returns and surviving spouses Section 1(a) If taxable income is: The tax is: Not over $19,050 10% of taxable income. Over $19,050 but not over $77,400 $1,905, plus 12% of the excess over $19,050. Over $77,400 but not over $165,000 $8,907, plus 22% of the excess over $77,400. Over $165,000 but not over $315,000 $28,179, plus 24% of the excess over $165,000. Over $315,000 but not over $400,000 $64,179, plus 32% of the excess over $315,000. Over $400,000 but not over $600,000 $91,379, plus 35% of the excess over $400,000. Over $600,000 $161,379, plus 37% of the excess over $600,000. . (c) Heads of households Section 1(b) If taxable income is: The tax is: Not over $13,600 10% of taxable income. Over $13,600 but not over $51,800 $1,360, plus 12% of the excess over $13,600. Over $51,800 but not over $82,500 $5,944, plus 22% of the excess over $51,800. Over $82,500 but not over $157,500 $12,698, plus 24% of the excess over $82,500. Over $157,500 but not over $200,000 $30,698, plus 32% of the excess over $157,500. Over $200,000 but not over $500,000 $44,298, plus 35% of the excess over $200,000. Over $500,000 $149,298, plus 37% of the excess over $500,000. . (d) Unmarried individuals other than surviving spouses and heads of households Section 1(c) If taxable income is: The tax is: Not over $9,525 10% of taxable income. Over $9,525 but not over $38,700 $952.50, plus 12% of the excess over $9,525. Over $38,700 but not over $82,500 $4,453.50, plus 22% of the excess over $38,700. Over $82,500 but not over $157,500 $14,089.50, plus 24% of the excess over $82,500. Over $157,500 but not over $200,000 $32,089.50, plus 32% of the excess over $157,500. Over $200,000 but not over $500,000 $45,689.50, plus 35% of the excess over $200,000. Over $500,000 $150,689.50, plus 37% of the excess over $500,000. . (e) Married individuals filing separate returns Section 1(d) If taxable income is: The tax is: Not over $9,525 10% of taxable income. Over $9,525 but not over $38,700 $952.50, plus 12% of the excess over $9,525. Over $38,700 but not over $82,500 $4,453.50, plus 22% of the excess over $38,700. Over $82,500 but not over $157,500 $14,089.50, plus 24% of the excess over $82,500. Over $157,500 but not over $200,000 $32,089.50, plus 32% of the excess over $157,500. Over $200,000 but not over $300,000 $45,689.50, plus 35% of the excess over $200,000. Over $300,000 $80,689.50, plus 37% of the excess over $300,000. . (f) Estates and trusts Section 1(e) If taxable income is: The tax is: Not over $2,550 10% of taxable income. Over $2,550 but not over $9,150 $255, plus 24% of the excess over $2,550. Over $9,150 but not over $12,500 $1,839, plus 35% of the excess over $9,150. Over $12,500 $3,011.50, plus 37% of the excess over $12,500. . (g) Inflation adjustments Section 1(f) (1) by amending paragraph (2)(A) to read as follows: (A) by increasing the minimum and maximum dollar amounts for each bracket for which a tax is imposed under such table by the cost-of-living adjustment for such calendar year, determined under this subsection for such calendar year by substituting ‘2017’ for ‘2016’ in paragraph (3)(A)(ii), , (2) by amending paragraph (7) to read as follows: (7) Rounding (A) In general Except as provided in subparagraph (B), if any increase determined under paragraph (2)(A) is not a multiple of $25, such increase shall be rounded to the next lowest multiple of $25. (B) Joint returns, etc In the case of a table prescribed under subsection (a), subparagraph (A) shall be applied by substituting $50 $25 , (3) by striking paragraph (8), and (4) in the heading, by striking Phaseout of marriage penalty in 15-percent bracket; adjustments Adjustments (h) Application of income tax brackets to capital gains brackets Section 1(h) (1) in paragraph (1)(B)(i), by striking 25 percent 22 percent (2) in paragraph (1)(C)(ii)(I), by striking which would (without regard to this paragraph) be taxed at a rate below 39.6 percent below the maximum 15-percent rate amount (3) by adding at the end the following new paragraphs: (12) Maximum 15 For purposes of this subsection, the maximum 15-percent rate amount shall be— (A) in the case of a joint return or surviving spouse (as defined in section 2(a)), $479,000 ( ½ (B) in the case of an individual who is a head of household (as defined in section 2(b)), $452,400, (C) in the case of any other individual (other than an estate or trust), $425,800, and (D) in the case of an estate or trust, $12,700. (13) Determination of 0 In the case of any estate or trust, paragraph (1)(B) shall be applied by treating the amount determined in clause (i) thereof as being equal to $2,600. (14) Inflation adjustment (A) In general Each of the dollar amounts in paragraphs (12) and (13) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under subsection (f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2017 calendar year 2016 (B) Rounding If any increase under subparagraph (A) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. . (i) Conforming amendments (1) Section 1 (2) Section 3402(q)(1) third lowest fourth lowest (j) Application of section 15 (1) In general Subsection (a) of section 15 If any rate of tax In the case of a corporation, if any rate of tax (2) Conforming amendments (A) Section 15 (B) Section 6013(c) sections 15, 443, and 7851(a)(1)(A) section 443 (C) The heading of section 15 on corporations Effect of changes (D) The table of sections for part III of subchapter A of chapter 1 Sec. 15. Effect of changes on corporations. . (k) Effective date (1) In general The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (2) Application of section 15 Section 15 (A) section 1(j) of such Code (as in effect before its repeal by this section), or (B) any amendment made by this Act. 3. Increase in standard deduction (a) In general Section 63(c)(2) (1) by striking $4,400 $18,000 (2) by striking $3,000 $12,000 (b) Inflation adjustment Section 63(c)(4) (4) Adjustments for inflation (A) In general In the case of a taxable year beginning after 2018, each dollar amount in paragraph (2)(B), (2)(C), or (5) or subsection (f) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting for 2016 (I) in the case of the dollar amounts contained in paragraph (2)(B) or (2)(C), 2017 (II) in the case of the dollar amounts contained in paragraph (5)(A) or subsection (f), 1987 (III) in the case of the dollar amount contained in paragraph (5)(B), 1997 (B) Rounding If any increase under subparagraph (A) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. . (c) Conforming amendments (1) Section 1(f)(7)(A) section 63(c)(4), (2) Section 1(f)(7)(B) sections 63(c)(4) and section (3) Section 63(c) (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 4. Repeal of overall limitation on itemized deductions (a) In general Part 1 of subchapter B of chapter 1 (b) Conforming amendments (1) Section 1(f)(7)(A), as amended by section 2, or section 68(b)(2) (2) Section 56(b)(1) (3) Section 164(b)(5)(H)(ii)(III) (as determined under section 68(b)) (4) Section 164(b)(5)(H) (iii) Applicable amount defined For purposes of clause (ii), the term applicable amount (I) $300,000 in the case of a joint return or a surviving spouse, (II) $275,000 in the case of a head of household, (III) $250,000 in the case of an individual who is not married and who is not a surviving spouse or head of household, and (IV) ½ the amount applicable under subclause (I) in the case of a married individual filing a separate return. For purposes of this paragraph, marital status shall be determined under section 7703. In the case of any taxable year beginning in calendar years after 2017, each of the dollar amounts in this clause shall be increased by an amount equal to such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting 2012 2016 . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 5. Increased exemption for Alternative Minimum Tax made permanent (a) In general Section 55(d)(1) (1) by striking $78,750 $109,400 (2) by striking $50,600 $70,300 (b) Phase-Out of exemption amount Section 55(d)(2) (1) by striking $150,000 $1,000,000 (2) by striking subparagraphs (B) and (C) and by inserting the following new subparagraphs: (B) 50 percent of the dollar amount applicable under subparagraph (A) in the case of a taxpayer described in paragraph (1)(B) or (1)(C), and (C) $75,000 in the case of a taxpayer described in paragraph (1)(D). . (c) Inflation adjustment Section 55(d)(3) (3) Inflation adjustment In the case of any taxable year beginning in a calendar year after 2018, each dollar amount described in clause (i) or (ii) of subparagraph (B) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting— (i) in the case of a dollar amount contained in paragraph (1)(D) or (2)(C) or in subsection (b)(1)(A), calendar year 2011 calendar year 2016 (ii) in the case of a dollar amount contained in paragraph (1)(A), (1)(B), or (2)(A), calendar year 2017 calendar year 2016 Any increased amount determined under this paragraph shall be rounded to the nearest multiple of $100 ($50 in the case of the dollar amount contained in paragraph (2)(C)). . (d) Conforming amendment Section 55(d) (e) Effective date The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: Permanent Extension of Rate Cuts and Extension of National Tax Simplification Act of 2022 or the PERCENTS Act of 2022 This bill makes permanent provisions in Public Law 115-97 (also known as the Tax Cuts and Jobs Act) relating to individual taxpayers, including the modification of individual income and capital gains tax rates and the increased exemption for the alternative minimum tax. It also increases the standard tax deduction and repeals the limitation on itemized tax deductions.