H. R. 1 
One Hundred Fifteenth Congress 
of the 
United States of America 
AT THE FIRST SESSION 
Begun and held at the City of Washington on Tuesday, 
the third day of January, two thousand and seventeen 
An Act 
To provide for reconciliation pursuant to titles II and V of the concurrent resolution 
on the budget for fiscal year 2018. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
TITLE I 
SECTION 11000. SHORT TITLE, ETC. 
(a) AMENDMENT OF 1986 CODE.—Except as otherwise expressly 
provided, whenever in this title 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. 
Subtitle A—Individual Tax Reform 
PART I—TAX RATE REFORM 
SEC. 11001. MODIFICATION OF RATES. 
(a) IN GENERAL.—Section 1 is amended by adding at the end 
the following new subsection: 
‘‘(j) MODIFICATIONS FOR TAXABLE YEARS 2018 THROUGH 2025.— 
‘‘(1) IN GENERAL.—In the case of a taxable year beginning 
after December 31, 2017, and before January 1, 2026— 
‘‘(A) subsection (i) shall not apply, and 
‘‘(B) this section (other than subsection (i)) shall be 
applied as provided in paragraphs (2) through (6). 
‘‘(2) RATE TABLES.— 
‘‘(A) MARRIED INDIVIDUALS FILING JOINT RETURNS AND 
SURVIVING SPOUSES.—The following table shall be applied 
in lieu of the table contained in subsection (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.
H. R. 1—2 
‘‘If taxable income is: 
The tax is: 
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. 
‘‘(B) HEADS OF HOUSEHOLDS.—The following table shall 
be applied in lieu of the table contained in subsection 
(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. 
‘‘(C) UNMARRIED INDIVIDUALS OTHER THAN SURVIVING 
SPOUSES AND HEADS OF HOUSEHOLDS.—The following table 
shall be applied in lieu of the table contained in subsection 
(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. 
‘‘(D) 
MARRIED
INDIVIDUALS
FILING
SEPARATE 
RETURNS.—The following table shall be applied in lieu of 
the table contained in subsection (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.
H. R. 1—3 
‘‘If taxable income is: 
The tax is: 
Over $300,000 .................................................
$80,689.50, plus 37% of the excess 
over $300,000. 
‘‘(E) ESTATES AND TRUSTS.—The following table shall 
be applied in lieu of the table contained in subsection 
(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. 
‘‘(F) REFERENCES TO RATE TABLES.—Any reference in 
this title to a rate of tax under subsection (c) shall be 
treated as a reference to the corresponding rate bracket 
under subparagraph (C) of this paragraph, except that 
the reference in section 3402(q)(1) to the third lowest rate 
of tax applicable under subsection (c) shall be treated as 
a reference to the fourth lowest rate of tax under subpara-
graph (C). 
‘‘(3) ADJUSTMENTS.— 
‘‘(A) NO ADJUSTMENT IN 2018.—The tables contained 
in paragraph (2) shall apply without adjustment for taxable 
years beginning after December 31, 2017, and before 
January 1, 2019. 
‘‘(B) SUBSEQUENT YEARS.—For taxable years beginning 
after December 31, 2018, the Secretary shall prescribe 
tables which shall apply in lieu of the tables contained 
in paragraph (2) in the same manner as under paragraphs 
(1) and (2) of subsection (f) (applied without regard to 
clauses (i) and (ii) of subsection (f)(2)(A)), except that in 
prescribing such tables— 
‘‘(i) subsection (f)(3) shall be applied by sub-
stituting ‘calendar year 2017’ for ‘calendar year 2016’ 
in subparagraph (A)(ii) thereof, 
‘‘(ii) subsection (f)(7)(B) shall apply to any 
unmarried individual other than a surviving spouse 
or head of household, and 
‘‘(iii) subsection (f)(8) shall not apply. 
‘‘(4) SPECIAL RULES FOR CERTAIN CHILDREN WITH UNEARNED 
INCOME.— 
‘‘(A) IN
GENERAL.—In the case of a child to whom 
subsection (g) applies for the taxable year, the rules of 
subparagraphs (B) and (C) shall apply in lieu of the rule 
under subsection (g)(1). 
‘‘(B) MODIFICATIONS TO APPLICABLE RATE BRACKETS.— 
In determining the amount of tax imposed by this section 
for the taxable year on a child described in subparagraph 
(A), the income tax table otherwise applicable under this 
subsection to the child shall be applied with the following 
modifications:
H. R. 1—4 
‘‘(i) 24-PERCENT BRACKET.—The maximum taxable 
income which is taxed at a rate below 24 percent 
shall not be more than the sum of— 
‘‘(I) the earned taxable income of such child, 
plus 
‘‘(II) the minimum taxable income for the 24- 
percent bracket in the table under paragraph 
(2)(E) (as adjusted under paragraph (3)) for the 
taxable year. 
‘‘(ii) 35-PERCENT BRACKET.—The maximum taxable 
income which is taxed at a rate below 35 percent 
shall not be more than the sum of— 
‘‘(I) the earned taxable income of such child, 
plus 
‘‘(II) the minimum taxable income for the 35- 
percent bracket in the table under paragraph 
(2)(E) (as adjusted under paragraph (3)) for the 
taxable year. 
‘‘(iii) 37-PERCENT BRACKET.—The maximum taxable 
income which is taxed at a rate below 37 percent 
shall not be more than the sum of— 
‘‘(I) the earned taxable income of such child, 
plus 
‘‘(II) the minimum taxable income for the 37- 
percent bracket in the table under paragraph 
(2)(E) (as adjusted under paragraph (3)) for the 
taxable year. 
‘‘(C) COORDINATION WITH CAPITAL GAINS RATES.—For 
purposes of applying section 1(h) (after the modifications 
under paragraph (5)(A))— 
‘‘(i) the maximum zero rate amount shall not be 
more than the sum of— 
‘‘(I) the earned taxable income of such child, 
plus 
‘‘(II) the amount in effect under paragraph 
(5)(B)(i)(IV) for the taxable year, and 
‘‘(ii) the maximum 15-percent rate amount shall 
not be more than the sum of— 
‘‘(I) the earned taxable income of such child, 
plus 
‘‘(II) the amount in effect under paragraph 
(5)(B)(ii)(IV) for the taxable year. 
‘‘(D) EARNED TAXABLE INCOME.—For purposes of this 
paragraph, the term ‘earned taxable income’ means, with 
respect to any child for any taxable year, the taxable income 
of such child reduced (but not below zero) by the net 
unearned income (as defined in subsection (g)(4)) of such 
child. 
‘‘(5) APPLICATION OF CURRENT INCOME TAX BRACKETS TO 
CAPITAL GAINS BRACKETS.— 
‘‘(A) IN GENERAL.—Section 1(h)(1) shall be applied— 
‘‘(i) by substituting ‘below the maximum zero rate 
amount’ for ‘which would (without regard to this para-
graph) be taxed at a rate below 25 percent’ in subpara-
graph (B)(i), and 
‘‘(ii) by substituting ‘below the maximum 15-per-
cent rate amount’ for ‘which would (without regard
H. R. 1—5 
to this paragraph) be taxed at a rate below 39.6 per-
cent’ in subparagraph (C)(ii)(I). 
‘‘(B) MAXIMUM
AMOUNTS
DEFINED.—For purposes of 
applying section 1(h) with the modifications described in 
subparagraph (A)— 
‘‘(i) MAXIMUM ZERO RATE AMOUNT.—The maximum 
zero rate amount shall be— 
‘‘(I) in the case of a joint return or surviving 
spouse, $77,200, 
‘‘(II) in the case of an individual who is a 
head of household (as defined in section 2(b)), 
$51,700, 
‘‘(III) in the case of any other individual (other 
than an estate or trust), an amount equal to 1⁄2 
of the amount in effect for the taxable year under 
subclause (I), and 
‘‘(IV) in the case of an estate or trust, $2,600. 
‘‘(ii) MAXIMUM
15-PERCENT
RATE
AMOUNT.—The 
maximum 15-percent rate amount shall be— 
‘‘(I) in the case of a joint return or surviving 
spouse, $479,000 (1⁄2 such amount in the case of 
a married individual filing a separate return), 
‘‘(II) in the case of an individual who is the 
head of a household (as defined in section 2(b)), 
$452,400, 
‘‘(III) in the case of any other individual (other 
than an estate or trust), $425,800, and 
‘‘(IV) in the case of an estate or trust, $12,700. 
‘‘(C) INFLATION ADJUSTMENT.—In the case of any tax-
able year beginning after 2018, each of the dollar amounts 
in clauses (i) and (ii) of subparagraph (B) 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’ for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof. 
If any increase under this subparagraph is not a multiple 
of $50, such increase shall be rounded to the next lowest 
multiple of $50. 
‘‘(6) SECTION 15 NOT TO APPLY.—Section 15 shall not apply 
to any change in a rate of tax by reason of this subsection.’’. 
(b) DUE DILIGENCE TAX PREPARER REQUIREMENT WITH RESPECT 
TO HEAD OF HOUSEHOLD FILING STATUS.—Subsection (g) of section 
6695 is amended to read as follows: 
‘‘(g) FAILURE TO BE DILIGENT IN DETERMINING ELIGIBILITY FOR 
CERTAIN TAX BENEFITS.—Any person who is a tax return preparer 
with respect to any return or claim for refund who fails to comply 
with due diligence requirements imposed by the Secretary by regu-
lations with respect to determining— 
‘‘(1) eligibility to file as a head of household (as defined 
in section 2(b)) on the return, or 
‘‘(2) eligibility for, or the amount of, the credit allowable 
by section 24, 25A(a)(1), or 32, 
shall pay a penalty of $500 for each such failure.’’.
H. R. 1—6 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11002. INFLATION ADJUSTMENTS BASED ON CHAINED CPI. 
(a) IN GENERAL.—Subsection (f) of section 1 is amended by 
striking paragraph (3) and by inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) COST-OF-LIVING
ADJUSTMENT.—For purposes of this 
subsection— 
‘‘(A) IN
GENERAL.—The cost-of-living adjustment for 
any calendar year is the percentage (if any) by which— 
‘‘(i) the C-CPI-U for the preceding calendar year, 
exceeds 
‘‘(ii) the CPI for calendar year 2016, multiplied 
by the amount determined under subparagraph (B). 
‘‘(B) AMOUNT DETERMINED.—The amount determined 
under this clause is the amount obtained by dividing— 
‘‘(i) the C-CPI-U for calendar year 2016, by 
‘‘(ii) the CPI for calendar year 2016. 
‘‘(C) SPECIAL RULE FOR ADJUSTMENTS WITH A BASE YEAR 
AFTER 2016.—For purposes of any provision of this title 
which provides for the substitution of a year after 2016 
for ‘2016’ in subparagraph (A)(ii), subparagraph (A) shall 
be applied by substituting ‘the C-CPI-U for calendar year 
2016’ for ‘the CPI for calendar year 2016’ and all that 
follows in clause (ii) thereof.’’. 
(b) C-CPI-U.—Subsection (f) of section 1 is amended by striking 
paragraph (7), by redesignating paragraph (6) as paragraph (7), 
and by inserting after paragraph (5) the following new paragraph: 
‘‘(6) C-CPI-U.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘C-CPI-U’ means the 
Chained Consumer Price Index for All Urban Consumers 
(as published by the Bureau of Labor Statistics of the 
Department of Labor). The values of the Chained Consumer 
Price Index for All Urban Consumers taken into account 
for purposes of determining the cost-of-living adjustment 
for any calendar year under this subsection shall be the 
latest values so published as of the date on which such 
Bureau publishes the initial value of the Chained Con-
sumer Price Index for All Urban Consumers for the month 
of August for the preceding calendar year. 
‘‘(B) DETERMINATION FOR CALENDAR YEAR.—The C-CPI- 
U for any calendar year is the average of the C-CPI- 
U as of the close of the 12-month period ending on August 
31 of such calendar year.’’. 
(c) APPLICATION TO PERMANENT TAX TABLES.— 
(1) IN GENERAL.—Section 1(f)(2)(A) is amended to read as 
follows: 
‘‘(A) except as provided in paragraph (8), 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, deter-
mined— 
‘‘(i) except as provided in clause (ii), by substituting 
‘1992’ for ‘2016’ in paragraph (3)(A)(ii), and 
‘‘(ii) in the case of adjustments to the dollar 
amounts at which the 36 percent rate bracket begins
H. R. 1—7 
or at which the 39.6 percent rate bracket begins, by 
substituting ‘1993’ for ‘2016’ in paragraph (3)(A)(ii),’’. 
(2) CONFORMING AMENDMENTS.—Section 1(i) is amended— 
(A) by striking ‘‘for ‘1992’ in subparagraph (B)’’ in 
paragraph (1)(C) and inserting ‘‘for ‘2016’ in subparagraph 
(A)(ii)’’, and 
(B) by striking ‘‘subsection (f)(3)(B) shall be applied 
by substituting ‘2012’ for ‘1992’ ’’ in paragraph (3)(C) and 
inserting ‘‘subsection (f)(3)(A)(ii) shall be applied by sub-
stituting ‘2012’ for ‘2016’ ’’. 
(d) APPLICATION TO OTHER INTERNAL REVENUE CODE OF 1986 
PROVISIONS.— 
(1) The following sections are each amended by striking 
‘‘for ‘calendar year 1992’ in subparagraph (B)’’ and inserting 
‘‘for ‘calendar year 2016’ in subparagraph (A)(ii)’’: 
(A) Section 23(h)(2). 
(B) Paragraphs (1)(A)(ii) and (2)(A)(ii) of section 25A(h). 
(C) Section 25B(b)(3)(B). 
(D) Subsection (b)(2)(B)(ii)(II), and clauses (i) and (ii) 
of subsection (j)(1)(B), of section 32. 
(E) Section 36B(f)(2)(B)(ii)(II). 
(F) Section 41(e)(5)(C)(i). 
(G) Subsections (e)(3)(D)(ii) and (h)(3)(H)(i)(II) of sec-
tion 42. 
(H) Section 45R(d)(3)(B)(ii). 
(I) Section 55(d)(4)(A)(ii). 
(J) Section 62(d)(3)(B). 
(K) Section 63(c)(4)(B). 
(L) Section 125(i)(2)(B). 
(M) Section 135(b)(2)(B)(ii). 
(N) Section 137(f)(2). 
(O) Section 146(d)(2)(B). 
(P) Section 147(c)(2)(H)(ii). 
(Q) Section 151(d)(4)(B). 
(R) Section 179(b)(6)(A)(ii). 
(S) Subsections (b)(5)(C)(i)(II) and (g)(8)(B) of section 
219. 
(T) Section 220(g)(2). 
(U) Section 221(f)(1)(B). 
(V) Section 223(g)(1)(B). 
(W) Section 408A(c)(3)(D)(ii). 
(X) Section 430(c)(7)(D)(vii)(II). 
(Y) Section 512(d)(2)(B). 
(Z) Section 513(h)(2)(C)(ii). 
(AA) Section 831(b)(2)(D)(ii). 
(BB) Section 877A(a)(3)(B)(i)(II). 
(CC) Section 2010(c)(3)(B)(ii). 
(DD) Section 2032A(a)(3)(B). 
(EE) Section 2503(b)(2)(B). 
(FF) Section 4261(e)(4)(A)(ii). 
(GG) Section 5000A(c)(3)(D)(ii). 
(HH) Section 6323(i)(4)(B). 
(II) Section 6334(g)(1)(B). 
(JJ) Section 6601(j)(3)(B). 
(KK) Section 6651(i)(1). 
(LL) Section 6652(c)(7)(A). 
(MM) Section 6695(h)(1).
H. R. 1—8 
(NN) Section 6698(e)(1). 
(OO) Section 6699(e)(1). 
(PP) Section 6721(f)(1). 
(QQ) Section 6722(f)(1). 
(RR) Section 7345(f)(2). 
(SS) Section 7430(c)(1). 
(TT) Section 9831(d)(2)(D)(ii)(II). 
(2) Sections 41(e)(5)(C)(ii) and 68(b)(2)(B) are each 
amended— 
(A) by striking ‘‘1(f)(3)(B)’’ and inserting ‘‘1(f)(3)(A)(ii)’’, 
and 
(B) by striking ‘‘1992’’ and inserting ‘‘2016’’. 
(3) Section 42(h)(6)(G) is amended— 
(A) by striking ‘‘for ‘calendar year 1987’ ’’ in clause 
(i)(II) and inserting ‘‘for ‘calendar year 2016’ in subpara-
graph (A)(ii) thereof’’, and 
(B) by striking ‘‘if the CPI for any calendar year’’ 
and all that follows in clause (ii) and inserting ‘‘if the 
C-CPI-U for any calendar year (as defined in section 1(f)(6)) 
exceeds the C-CPI-U for the preceding calendar year by 
more than 5 percent, the C-CPI-U for the base calendar 
year shall be increased such that such excess shall never 
be taken into account under clause (i). In the case of 
a base calendar year before 2017, the C-CPI-U for such 
year shall be determined by multiplying the CPI for such 
year by the amount determined under section 1(f)(3)(B).’’. 
(4) Section 59(j)(2)(B) is amended by striking ‘‘for ‘1992’ 
in subparagraph (B)’’ and inserting ‘‘for ‘2016’ in subparagraph 
(A)(ii)’’. 
(5) Section 132(f)(6)(A)(ii) is amended by striking ‘‘for ‘cal-
endar year 1992’ ’’ and inserting ‘‘for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof’’. 
(6) Section 162(o)(3) is amended by striking ‘‘adjusted for 
changes in the Consumer Price Index (as defined in section 
1(f)(5)) since 1991’’ and inserting ‘‘adjusted by increasing any 
such amount under the 1991 agreement by an amount equal 
to— 
‘‘(A) such 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, by substituting ‘calendar year 1990’ for ‘cal-
endar year 2016’ in subparagraph (A)(ii) thereof’’. 
(7) So much of clause (ii) of section 213(d)(10)(B) as pre-
cedes the last sentence is amended to read as follows: 
‘‘(ii) MEDICAL CARE COST ADJUSTMENT.—For pur-
poses of clause (i), the medical care cost adjustment 
for any calendar year is the percentage (if any) by 
which— 
‘‘(I) the medical care component of the C-CPI- 
U (as defined in section 1(f)(6)) for August of the 
preceding calendar year, exceeds 
‘‘(II) such component of the CPI (as defined 
in section 1(f)(4)) for August of 1996, multiplied 
by 
the 
amount 
determined 
under 
section 
1(f)(3)(B).’’. 
(8) Subparagraph (B) of section 280F(d)(7) is amended to 
read as follows:
H. R. 1—9 
‘‘(B) AUTOMOBILE PRICE INFLATION ADJUSTMENT.—For 
purposes of this paragraph— 
‘‘(i) IN GENERAL.—The automobile price inflation 
adjustment for any calendar year is the percentage 
(if any) by which— 
‘‘(I) the C-CPI-U automobile component for 
October of the preceding calendar year, exceeds 
‘‘(II) the automobile component of the CPI (as 
defined in section 1(f)(4)) for October of 1987, 
multiplied by the amount determined under 
1(f)(3)(B). 
‘‘(ii) C-CPI-U AUTOMOBILE COMPONENT.—The term 
‘C-CPI-U automobile component’ means the automobile 
component of the Chained Consumer Price Index for 
All Urban Consumers (as described in section 1(f)(6)).’’. 
(9) Section 911(b)(2)(D)(ii)(II) is amended by striking ‘‘for 
‘1992’ in subparagraph (B)’’ and inserting ‘‘for ‘2016’ in subpara-
graph (A)(ii)’’. 
(10) Paragraph (2) of section 1274A(d) is amended to read 
as follows: 
‘‘(2) ADJUSTMENT FOR INFLATION.—In the case of any debt 
instrument arising out of a sale or exchange during any cal-
endar year after 1989, each dollar amount contained in the 
preceding provisions of this section shall be increased by an 
amount equal to— 
‘‘(A) such 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, by substituting ‘calendar year 1988’ for ‘cal-
endar year 2016’ in subparagraph (A)(ii) thereof. 
Any increase under the preceding sentence shall be rounded 
to the nearest multiple of $100 (or, if such increase is a multiple 
of $50, such increase shall be increased to the nearest multiple 
of $100).’’. 
(11) Section 4161(b)(2)(C)(i)(II) is amended by striking ‘‘for 
‘1992’ in subparagraph (B)’’ and inserting ‘‘for ‘2016’ in subpara-
graph (A)(ii)’’. 
(12) Section 4980I(b)(3)(C)(v)(II) is amended by striking 
‘‘for ‘1992’ in subparagraph (B)’’ and inserting ‘‘for ‘2016’ in 
subparagraph (A)(ii)’’. 
(13) Section 6039F(d) is amended by striking ‘‘subpara-
graph (B) thereof shall be applied by substituting ‘1995’ for 
‘1992’ ’’ and inserting ‘‘subparagraph (A)(ii) thereof shall be 
applied by substituting ‘1995’ for ‘2016’ ’’. 
(14) Section 7872(g)(5) is amended to read as follows: 
‘‘(5) ADJUSTMENT OF LIMIT FOR INFLATION.—In the case 
of any loan made during any calendar year after 1986, the 
dollar amount in paragraph (2) shall be increased by an amount 
equal to— 
‘‘(A) such 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, by substituting ‘calendar year 1985’ for ‘cal-
endar year 2016’ in subparagraph (A)(ii) thereof. 
Any increase under the preceding sentence shall be rounded 
to the nearest multiple of $100 (or, if such increase is a multiple
H. R. 1—10 
of $50, such increase shall be increased to the nearest multiple 
of $100).’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2017. 
PART II—DEDUCTION FOR QUALIFIED 
BUSINESS INCOME OF PASS-THRU ENTITIES 
SEC. 11011. DEDUCTION FOR QUALIFIED BUSINESS INCOME. 
(a) IN GENERAL.—Part VI of subchapter B of chapter 1 is 
amended by adding at the end the following new section: 
‘‘SEC. 199A. QUALIFIED BUSINESS INCOME. 
‘‘(a) IN GENERAL.—In the case of a taxpayer other than a 
corporation, there shall be allowed as a deduction for any taxable 
year an amount equal to the sum of— 
‘‘(1) the lesser of— 
‘‘(A) the combined qualified business income amount 
of the taxpayer, or 
‘‘(B) an amount equal to 20 percent of the excess (if 
any) of— 
‘‘(i) the taxable income of the taxpayer for the 
taxable year, over 
‘‘(ii) the sum of any net capital gain (as defined 
in section 1(h)), plus the aggregate amount of the quali-
fied cooperative dividends, of the taxpayer for the tax-
able year, plus 
‘‘(2) the lesser of— 
‘‘(A) 20 percent of the aggregate amount of the qualified 
cooperative dividends of the taxpayer for the taxable year, 
or 
‘‘(B) taxable income (reduced by the net capital gain 
(as so defined)) of the taxpayer for the taxable year. 
The amount determined under the preceding sentence shall not 
exceed the taxable income (reduced by the net capital gain (as 
so defined)) of the taxpayer for the taxable year. 
‘‘(b) COMBINED QUALIFIED BUSINESS INCOME AMOUNT.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘combined qualified business 
income amount’ means, with respect to any taxable year, an 
amount equal to— 
‘‘(A) the sum of the amounts determined under para-
graph (2) for each qualified trade or business carried on 
by the taxpayer, plus 
‘‘(B) 20 percent of the aggregate amount of the qualified 
REIT dividends and qualified publicly traded partnership 
income of the taxpayer for the taxable year. 
‘‘(2) DETERMINATION
OF
DEDUCTIBLE
AMOUNT
FOR
EACH 
TRADE OR BUSINESS.—The amount determined under this para-
graph with respect to any qualified trade or business is the 
lesser of— 
‘‘(A) 20 percent of the taxpayer’s qualified business 
income with respect to the qualified trade or business, 
or 
‘‘(B) the greater of— 
‘‘(i) 50 percent of the W–2 wages with respect 
to the qualified trade or business, or
H. R. 1—11 
‘‘(ii) the sum of 25 percent of the W–2 wages with 
respect to the qualified trade or business, plus 2.5 
percent of the unadjusted basis immediately after 
acquisition of all qualified property. 
‘‘(3) MODIFICATIONS TO LIMIT BASED ON TAXABLE INCOME.— 
‘‘(A) EXCEPTION FROM LIMIT.—In the case of any tax-
payer whose taxable income for the taxable year does not 
exceed the threshold amount, paragraph (2) shall be applied 
without regard to subparagraph (B). 
‘‘(B) PHASE-IN OF LIMIT FOR CERTAIN TAXPAYERS.— 
‘‘(i) IN GENERAL.—If— 
‘‘(I) the taxable income of a taxpayer for any 
taxable year exceeds the threshold amount, but 
does not exceed the sum of the threshold amount 
plus $50,000 ($100,000 in the case of a joint 
return), and 
‘‘(II) the amount determined under paragraph 
(2)(B) (determined without regard to this subpara-
graph) with respect to any qualified trade or busi-
ness carried on by the taxpayer is less than the 
amount determined under paragraph (2)(A) with 
respect such trade or business, 
then paragraph (2) shall be applied with respect to 
such trade or business without regard to subparagraph 
(B) thereof and by reducing the amount determined 
under subparagraph (A) thereof by the amount deter-
mined under clause (ii). 
‘‘(ii) AMOUNT OF REDUCTION.—The amount deter-
mined under this subparagraph is the amount which 
bears the same ratio to the excess amount as— 
‘‘(I) the amount by which the taxpayer’s tax-
able income for the taxable year exceeds the 
threshold amount, bears to 
‘‘(II) $50,000 ($100,000 in the case of a joint 
return). 
‘‘(iii) EXCESS AMOUNT.—For purposes of clause (ii), 
the excess amount is the excess of— 
‘‘(I) the amount determined under paragraph 
(2)(A) (determined without regard to this para-
graph), over 
‘‘(II) the amount determined under paragraph 
(2)(B) (determined without regard to this para-
graph). 
‘‘(4) WAGES, ETC.— 
‘‘(A) IN GENERAL.—The term ‘W–2 wages’ means, with 
respect to any person for any taxable year of such person, 
the amounts described in paragraphs (3) and (8) of section 
6051(a) paid by such person with respect to employment 
of employees by such person during the calendar year 
ending during such taxable year. 
‘‘(B) LIMITATION TO WAGES ATTRIBUTABLE TO QUALIFIED 
BUSINESS
INCOME.—Such term shall not include any 
amount which is not properly allocable to qualified business 
income for purposes of subsection (c)(1). 
‘‘(C) RETURN
REQUIREMENT.—Such term shall not 
include any amount which is not properly included in a 
return filed with the Social Security Administration on
H. R. 1—12 
or before the 60th day after the due date (including exten-
sions) for such return. 
‘‘(5) ACQUISITIONS, DISPOSITIONS, AND
SHORT
TAXABLE 
YEARS.—The Secretary shall provide for the application of this 
subsection in cases of a short taxable year or where the tax-
payer acquires, or disposes of, the major portion of a trade 
or business or the major portion of a separate unit of a trade 
or business during the taxable year. 
‘‘(6) QUALIFIED PROPERTY.—For purposes of this section: 
‘‘(A) IN GENERAL.—The term ‘qualified property’ means, 
with respect to any qualified trade or business for a taxable 
year, tangible property of a character subject to the allow-
ance for depreciation under section 167— 
‘‘(i) which is held by, and available for use in, 
the qualified trade or business at the close of the 
taxable year, 
‘‘(ii) which is used at any point during the taxable 
year in the production of qualified business income, 
and 
‘‘(iii) the depreciable period for which has not 
ended before the close of the taxable year. 
‘‘(B) DEPRECIABLE
PERIOD.—The term ‘depreciable 
period’ means, with respect to qualified property of a tax-
payer, the period beginning on the date the property was 
first placed in service by the taxpayer and ending on the 
later of— 
‘‘(i) the date that is 10 years after such date, 
or 
‘‘(ii) the last day of the last full year in the 
applicable recovery period that would apply to the 
property under section 168 (determined without regard 
to subsection (g) thereof). 
‘‘(c) QUALIFIED BUSINESS INCOME.—For purposes of this sec-
tion— 
‘‘(1) IN
GENERAL.—The term ‘qualified business income’ 
means, for any taxable year, the net amount of qualified items 
of income, gain, deduction, and loss with respect to any qualified 
trade or business of the taxpayer. Such term shall not include 
any qualified REIT dividends, qualified cooperative dividends, 
or qualified publicly traded partnership income. 
‘‘(2) CARRYOVER OF LOSSES.—If the net amount of qualified 
income, gain, deduction, and loss with respect to qualified 
trades or businesses of the taxpayer for any taxable year is 
less than zero, such amount shall be treated as a loss from 
a qualified trade or business in the succeeding taxable year. 
‘‘(3) QUALIFIED ITEMS OF INCOME, GAIN, DEDUCTION, AND 
LOSS.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—The term ‘qualified items of income, 
gain, deduction, and loss’ means items of income, gain, 
deduction, and loss to the extent such items are— 
‘‘(i) effectively connected with the conduct of a 
trade or business within the United States (within 
the meaning of section 864(c), determined by sub-
stituting ‘qualified trade or business (within the 
meaning of section 199A)’ for ‘nonresident alien indi-
vidual or a foreign corporation’ or for ‘a foreign corpora-
tion’ each place it appears), and
H. R. 1—13 
‘‘(ii) included or allowed in determining taxable 
income for the taxable year. 
‘‘(B) EXCEPTIONS.—The following investment items 
shall not be taken into account as a qualified item of 
income, gain, deduction, or loss: 
‘‘(i) Any item of short-term capital gain, short- 
term capital loss, long-term capital gain, or long-term 
capital loss. 
‘‘(ii) Any dividend, income equivalent to a dividend, 
or payment in lieu of dividends described in section 
954(c)(1)(G). 
‘‘(iii) Any interest income other than interest 
income which is properly allocable to a trade or busi-
ness. 
‘‘(iv) Any item of gain or loss described in subpara-
graph (C) or (D) of section 954(c)(1) (applied by sub-
stituting ‘qualified trade or business’ for ‘controlled 
foreign corporation’). 
‘‘(v) Any item of income, gain, deduction, or loss 
taken into account under section 954(c)(1)(F) (deter-
mined without regard to clause (ii) thereof and other 
than items attributable to notional principal contracts 
entered into in transactions qualifying under section 
1221(a)(7)). 
‘‘(vi) Any amount received from an annuity which 
is not received in connection with the trade or business. 
‘‘(vii) Any item of deduction or loss properly allo-
cable to an amount described in any of the preceding 
clauses. 
‘‘(4) TREATMENT
OF
REASONABLE
COMPENSATION
AND 
GUARANTEED PAYMENTS.—Qualified business income shall not 
include— 
‘‘(A) reasonable compensation paid to the taxpayer by 
any qualified trade or business of the taxpayer for services 
rendered with respect to the trade or business, 
‘‘(B) any guaranteed payment described in section 
707(c) paid to a partner for services rendered with respect 
to the trade or business, and 
‘‘(C) to the extent provided in regulations, any payment 
described in section 707(a) to a partner for services ren-
dered with respect to the trade or business. 
‘‘(d) QUALIFIED TRADE OR BUSINESS.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘qualified trade or business’ 
means any trade or business other than— 
‘‘(A) a specified service trade or business, or 
‘‘(B) the trade or business of performing services as 
an employee. 
‘‘(2) SPECIFIED
SERVICE
TRADE
OR
BUSINESS.—The term 
‘specified service trade or business’ means any trade or busi-
ness— 
‘‘(A) which is described in section 1202(e)(3)(A) (applied 
without regard to the words ‘engineering, architecture,’) 
or which would be so described if the term ‘employees 
or owners’ were substituted for ‘employees’ therein, or 
‘‘(B) which involves the performance of services that 
consist of investing and investment management, trading,
H. R. 1—14 
or dealing in securities (as defined in section 475(c)(2)), 
partnership interests, or commodities (as defined in section 
475(e)(2)). 
‘‘(3) EXCEPTION FOR SPECIFIED SERVICE BUSINESSES BASED 
ON TAXPAYER’S INCOME.— 
‘‘(A) IN GENERAL.—If, for any taxable year, the taxable 
income of any taxpayer is less than the sum of the threshold 
amount plus $50,000 ($100,000 in the case of a joint 
return), then— 
‘‘(i) any specified service trade or business of the 
taxpayer shall not fail to be treated as a qualified 
trade or business due to paragraph (1)(A), but 
‘‘(ii) only the applicable percentage of qualified 
items of income, gain, deduction, or loss, and the W– 
2 wages and the unadjusted basis immediately after 
acquisition of qualified property, of the taxpayer allo-
cable to such specified service trade or business shall 
be taken into account in computing the qualified busi-
ness income, W–2 wages, and the unadjusted basis 
immediately after acquisition of qualified property of 
the taxpayer for the taxable year for purposes of 
applying this section. 
‘‘(B) 
APPLICABLE
PERCENTAGE.—For 
purposes 
of 
subparagraph (A), the term ‘applicable percentage’ means, 
with respect to any taxable year, 100 percent reduced (not 
below zero) by the percentage equal to the ratio of— 
‘‘(i) the taxable income of the taxpayer for the 
taxable year in excess of the threshold amount, bears 
to 
‘‘(ii) $50,000 ($100,000 in the case of a joint return). 
‘‘(e) OTHER DEFINITIONS.—For purposes of this section— 
‘‘(1) TAXABLE INCOME.—Taxable income shall be computed 
without regard to the deduction allowable under this section. 
‘‘(2) THRESHOLD AMOUNT.— 
‘‘(A) IN GENERAL.—The term ‘threshold amount’ means 
$157,500 (200 percent of such amount in the case of a 
joint return). 
‘‘(B) INFLATION ADJUSTMENT.—In the case of any tax-
able year beginning after 2018, the dollar amount in 
subparagraph (A) 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 
‘calendar year 2017’ for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof. 
The amount of any increase under the preceding sentence 
shall be rounded as provided in section 1(f)(7). 
‘‘(3) QUALIFIED REIT DIVIDEND.—The term ‘qualified REIT 
dividend’ means any dividend from a real estate investment 
trust received during the taxable year which— 
‘‘(A) is not a capital gain dividend, as defined in section 
857(b)(3), and 
‘‘(B) is not qualified dividend income, as defined in 
section 1(h)(11).
H. R. 1—15 
‘‘(4) QUALIFIED COOPERATIVE DIVIDEND.—The term ‘quali-
fied cooperative dividend’ means any patronage dividend (as 
defined in section 1388(a)), any per-unit retain allocation (as 
defined in section 1388(f)), and any qualified written notice 
of allocation (as defined in section 1388(c)), or any similar 
amount received from an organization described in subpara-
graph (B)(ii), which— 
‘‘(A) is includible in gross income, and 
‘‘(B) is received from— 
‘‘(i) an organization or corporation described in 
section 501(c)(12) or 1381(a), or 
‘‘(ii) an organization which is governed under this 
title by the rules applicable to cooperatives under this 
title before the enactment of subchapter T. 
‘‘(5) QUALIFIED PUBLICLY TRADED PARTNERSHIP INCOME.— 
The term ‘qualified publicly traded partnership income’ means, 
with respect to any qualified trade or business of a taxpayer, 
the sum of— 
‘‘(A) the net amount of such taxpayer’s allocable share 
of each qualified item of income, gain, deduction, and loss 
(as defined in subsection (c)(3) and determined after the 
application of subsection (c)(4)) from a publicly traded part-
nership (as defined in section 7704(a)) which is not treated 
as a corporation under section 7704(c), plus 
‘‘(B) any gain recognized by such taxpayer upon disposi-
tion of its interest in such partnership to the extent such 
gain is treated as an amount realized from the sale or 
exchange of property other than a capital asset under sec-
tion 751(a). 
‘‘(f) SPECIAL RULES.— 
‘‘(1) APPLICATION TO PARTNERSHIPS AND S CORPORATIONS.— 
‘‘(A) IN
GENERAL.—In the case of a partnership or 
S corporation— 
‘‘(i) this section shall be applied at the partner 
or shareholder level, 
‘‘(ii) each partner or shareholder shall take into 
account such person’s allocable share of each qualified 
item of income, gain, deduction, and loss, and 
‘‘(iii) each partner or shareholder shall be treated 
for purposes of subsection (b) as having W–2 wages 
and unadjusted basis immediately after acquisition of 
qualified property for the taxable year in an amount 
equal to such person’s allocable share of the W–2 wages 
and the unadjusted basis immediately after acquisition 
of qualified property of the partnership or S corporation 
for the taxable year (as determined under regulations 
prescribed by the Secretary). 
For purposes of clause (iii), a partner’s or shareholder’s 
allocable share of W–2 wages shall be determined in the 
same manner as the partner’s or shareholder’s allocable 
share of wage expenses. For purposes of such clause, part-
ner’s or shareholder’s allocable share of the unadjusted 
basis immediately after acquisition of qualified property 
shall be determined in the same manner as the partner’s 
or shareholder’s allocable share of depreciation. For pur-
poses of this subparagraph, in the case of an S corporation,
H. R. 1—16 
an allocable share shall be the shareholder’s pro rata share 
of an item. 
‘‘(B) APPLICATION
TO
TRUSTS
AND
ESTATES.—Rules 
similar to the rules under section 199(d)(1)(B)(i) (as in 
effect on December 1, 2017) for the apportionment of W– 
2 wages shall apply to the apportionment of W–2 wages 
and the apportionment of unadjusted basis immediately 
after acquisition of qualified property under this section. 
‘‘(C) TREATMENT OF TRADES OR BUSINESS IN PUERTO 
RICO.— 
‘‘(i) IN GENERAL.—In the case of any taxpayer with 
qualified business income from sources within the 
commonwealth of Puerto Rico, if all such income is 
taxable under section 1 for such taxable year, then 
for purposes of determining the qualified business 
income of such taxpayer for such taxable year, the 
term ‘United States’ shall include the Commonwealth 
of Puerto Rico. 
‘‘(ii) SPECIAL RULE FOR APPLYING LIMIT.—In the 
case of any taxpayer described in clause (i), the deter-
mination of W–2 wages of such taxpayer with respect 
to any qualified trade or business conducted in Puerto 
Rico shall be made without regard to any exclusion 
under section 3401(a)(8) for remuneration paid for serv-
ices in Puerto Rico. 
‘‘(2) COORDINATION WITH MINIMUM TAX.—For purposes of 
determining alternative minimum taxable income under section 
55, qualified business income shall be determined without 
regard to any adjustments under sections 56 through 59. 
‘‘(3) DEDUCTION LIMITED TO INCOME TAXES.—The deduction 
under subsection (a) shall only be allowed for purposes of 
this chapter. 
‘‘(4) REGULATIONS.—The Secretary shall prescribe such 
regulations as are necessary to carry out the purposes of this 
section, including regulations— 
‘‘(A) for requiring or restricting the allocation of items 
and wages under this section and such reporting require-
ments as the Secretary determines appropriate, and 
‘‘(B) for the application of this section in the case 
of tiered entities. 
‘‘(g) DEDUCTION ALLOWED
TO SPECIFIED AGRICULTURAL
OR 
HORTICULTURAL COOPERATIVES.— 
‘‘(1) IN GENERAL.—In the case of any taxable year of a 
specified agricultural or horticultural cooperative beginning 
after December 31, 2017, there shall be allowed a deduction 
in an amount equal to the lesser of— 
‘‘(A) 20 percent of the excess (if any) of— 
‘‘(i) the gross income of a specified agricultural 
or horticultural cooperative, over 
‘‘(ii) the qualified cooperative dividends (as defined 
in subsection (e)(4)) paid during the taxable year for 
the taxable year, or 
‘‘(B) the greater of— 
‘‘(i) 50 percent of the W–2 wages of the cooperative 
with respect to its trade or business, or 
‘‘(ii) the sum of 25 percent of the W–2 wages of 
the cooperative with respect to its trade or business,
H. R. 1—17 
plus 2.5 percent of the unadjusted basis immediately 
after acquisition of all qualified property of the coopera-
tive. 
‘‘(2) LIMITATION.—The amount determined under para-
graph (1) shall not exceed the taxable income of the specified 
agricultural or horticultural for the taxable year. 
‘‘(3) SPECIFIED AGRICULTURAL OR HORTICULTURAL COOPERA-
TIVE.—For purposes of this subsection, the term ‘specified agri-
cultural or horticultural cooperative’ means an organization 
to which part I of subchapter T applies which is engaged 
in— 
‘‘(A) the manufacturing, production, growth, or extrac-
tion in whole or significant part of any agricultural or 
horticultural product, 
‘‘(B) the marketing of agricultural or horticultural prod-
ucts which its patrons have so manufactured, produced, 
grown, or extracted, or 
‘‘(C) the provision of supplies, equipment, or services 
to farmers or to organizations described in subparagraph 
(A) or (B). 
‘‘(h) ANTI-ABUSE RULES.—The Secretary shall— 
‘‘(1) apply rules similar to the rules under section 179(d)(2) 
in order to prevent the manipulation of the depreciable period 
of qualified property using transactions between related parties, 
and 
‘‘(2) prescribe rules for determining the unadjusted basis 
immediately after acquisition of qualified property acquired 
in like-kind exchanges or involuntary conversions. 
‘‘(i) TERMINATION.—This section shall not apply to taxable years 
beginning after December 31, 2025.’’. 
(b) TREATMENT OF DEDUCTION IN COMPUTING ADJUSTED GROSS 
AND TAXABLE INCOME.— 
(1) DEDUCTION
NOT
ALLOWED
IN
COMPUTING
ADJUSTED 
GROSS INCOME.—Section 62(a) is amended by adding at the 
end the following new sentence: ‘‘The deduction allowed by 
section 199A shall not be treated as a deduction described 
in any of the preceding paragraphs of this subsection.’’. 
(2) DEDUCTION ALLOWED TO NONITEMIZERS.—Section 63(b) 
is amended by striking ‘‘and’’ at the end of paragraph (1), 
by striking the period at the end of paragraph (2) and inserting 
‘‘, and’’, and by adding at the end the following new paragraph: 
‘‘(3) the deduction provided in section 199A.’’. 
(3) DEDUCTION ALLOWED TO ITEMIZERS WITHOUT LIMITS ON 
ITEMIZED DEDUCTIONS.—Section 63(d) is amended by striking 
‘‘and’’ at the end of paragraph (1), by striking the period at 
the end of paragraph (2) and inserting ‘‘, and’’, and by adding 
at the end the following new paragraph: 
‘‘(3) the deduction provided in section 199A.’’. 
(4) 
CONFORMING
AMENDMENT.—Section 
3402(m)(1) 
is 
amended by inserting ‘‘and the estimated deduction allowed 
under section 199A’’ after ‘‘chapter 1’’. 
(c) ACCURACY-RELATED
PENALTY
ON
DETERMINATION
OF 
APPLICABLE
PERCENTAGE.—Section 6662(d)(1) is amended by 
inserting at the end the following new subparagraph: 
‘‘(C) SPECIAL RULE FOR TAXPAYERS CLAIMING SECTION 
199A DEDUCTION.—In the case of any taxpayer who claims 
the deduction allowed under section 199A for the taxable
H. R. 1—18 
year, subparagraph (A) shall be applied by substituting 
‘5 percent’ for ‘10 percent’.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 172(d) is amended by adding at the end the 
following new paragraph: 
‘‘(8) QUALIFIED BUSINESS INCOME DEDUCTION.—The deduc-
tion under section 199A shall not be allowed.’’. 
(2) Section 246(b)(1) is amended by inserting ‘‘199A,’’ before 
‘‘243(a)(1)’’. 
(3) Section 613(a) is amended by inserting ‘‘and without 
the deduction under section 199A’’ after ‘‘and without the deduc-
tion under section 199’’. 
(4) Section 613A(d)(1) is amended by redesignating sub-
paragraphs (C), (D), and (E) as subparagraphs (D), (E), and 
(F), respectively, and by inserting after subparagraph (B), the 
following new subparagraph: 
‘‘(C) any deduction allowable under section 199A,’’. 
(5) Section 170(b)(2)(D) is amended by striking ‘‘and’’ in 
clause (iv), by striking the period at the end of clause (v), 
and by adding at the end the following new clause: 
‘‘(vi) section 199A(g).’’. 
(6) The table of sections for part VI of subchapter B of 
chapter 1 is amended by inserting at the end the following 
new item: 
‘‘Sec. 199A. Qualified business income.’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11012. LIMITATION ON LOSSES FOR TAXPAYERS OTHER THAN 
CORPORATIONS. 
(a) IN GENERAL.—Section 461 is amended by adding at the 
end the following new subsection: 
‘‘(l) LIMITATION ON EXCESS BUSINESS LOSSES OF NONCORPORATE 
TAXPAYERS.— 
‘‘(1) LIMITATION.—In the case of taxable year of a taxpayer 
other than a corporation beginning after December 31, 2017, 
and before January 1, 2026— 
‘‘(A) subsection (j) (relating to limitation on excess farm 
losses of certain taxpayers) shall not apply, and 
‘‘(B) any excess business loss of the taxpayer for the 
taxable year shall not be allowed. 
‘‘(2) DISALLOWED LOSS CARRYOVER.—Any loss which is dis-
allowed under paragraph (1) shall be treated as a net operating 
loss carryover to the following taxable year under section 172. 
‘‘(3) EXCESS
BUSINESS
LOSS.—For purposes of this sub-
section— 
‘‘(A) IN
GENERAL.—The term ‘excess business loss’ 
means the excess (if any) of— 
‘‘(i) the aggregate deductions of the taxpayer for 
the taxable year which are attributable to trades or 
businesses of such taxpayer (determined without 
regard to whether or not such deductions are dis-
allowed for such taxable year under paragraph (1)), 
over 
‘‘(ii) the sum of—
H. R. 1—19 
‘‘(I) the aggregate gross income or gain of such 
taxpayer for the taxable year which is attributable 
to such trades or businesses, plus 
‘‘(II) $250,000 (200 percent of such amount 
in the case of a joint return). 
‘‘(B) ADJUSTMENT FOR INFLATION.—In the case of any 
taxable year beginning after December 31, 2018, the 
$250,000 amount in subparagraph (A)(ii)(II) 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 
‘2017’ for ‘2016’ in subparagraph (A)(ii) thereof. 
If any amount as increased under the preceding sentence 
is not a multiple of $1,000, such amount shall be rounded 
to the nearest multiple of $1,000. 
‘‘(4) APPLICATION OF SUBSECTION IN CASE OF PARTNERSHIPS 
AND S CORPORATIONS.—In the case of a partnership or S cor-
poration— 
‘‘(A) this subsection shall be applied at the partner 
or shareholder level, and 
‘‘(B) each partner’s or shareholder’s allocable share 
of the items of income, gain, deduction, or loss of the 
partnership or S corporation for any taxable year from 
trades or businesses attributable to the partnership or 
S corporation shall be taken into account by the partner 
or shareholder in applying this subsection to the taxable 
year of such partner or shareholder with or within which 
the taxable year of the partnership or S corporation ends. 
For purposes of this paragraph, in the case of an S corporation, 
an allocable share shall be the shareholder’s pro rata share 
of an item. 
‘‘(5) ADDITIONAL REPORTING.—The Secretary shall prescribe 
such additional reporting requirements as the Secretary deter-
mines necessary to carry out the purposes of this subsection. 
‘‘(6) COORDINATION
WITH
SECTION
469.—This subsection 
shall be applied after the application of section 469.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2017. 
PART III—TAX BENEFITS FOR FAMILIES AND 
INDIVIDUALS 
SEC. 11021. INCREASE IN STANDARD DEDUCTION. 
(a) IN GENERAL.—Subsection (c) of section 63 is amended by 
adding at the end the following new paragraph: 
‘‘(7) SPECIAL
RULES
FOR
TAXABLE
YEARS
2018
THROUGH 
2025.—In the case of a taxable year beginning after December 
31, 2017, and before January 1, 2026— 
‘‘(A) INCREASE IN STANDARD DEDUCTION.—Paragraph 
(2) shall be applied— 
‘‘(i) by substituting ‘$18,000’ for ‘$4,400’ in 
subparagraph (B), and 
‘‘(ii) by substituting ‘$12,000’ for ‘$3,000’ in 
subparagraph (C). 
‘‘(B) ADJUSTMENT FOR INFLATION.—
H. R. 1—20 
‘‘(i) IN GENERAL.—Paragraph (4) shall not apply 
to the dollar amounts contained in paragraphs (2)(B) 
and (2)(C). 
‘‘(ii) ADJUSTMENT OF INCREASED AMOUNTS.—In the 
case of a taxable year beginning after 2018, the $18,000 
and $12,000 amounts in subparagraph (A) shall each 
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 sub-
stituting ‘2017’ for ‘2016’ in subparagraph (A)(ii) 
thereof. 
If any increase under this clause is not a multiple 
of $50, such increase shall be rounded to the next 
lowest multiple of $50.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11022. INCREASE IN AND MODIFICATION OF CHILD TAX CREDIT. 
(a) IN GENERAL.—Section 24 is amended by adding at the 
end the following new subsection: 
‘‘(h) SPECIAL RULES FOR TAXABLE YEARS 2018 THROUGH 2025.— 
‘‘(1) IN GENERAL.—In the case of a taxable year beginning 
after December 31, 2017, and before January 1, 2026, this 
section shall be applied as provided in paragraphs (2) through 
(7). 
‘‘(2) CREDIT AMOUNT.—Subsection (a) shall be applied by 
substituting ‘$2,000’ for ‘$1,000’. 
‘‘(3) LIMITATION.—In lieu of the amount determined under 
subsection (b)(2), the threshold amount shall be $400,000 in 
the case of a joint return ($200,000 in any other case). 
‘‘(4) PARTIAL CREDIT ALLOWED FOR CERTAIN OTHER DEPEND-
ENTS.— 
‘‘(A) IN GENERAL.—The credit determined under sub-
section (a) (after the application of paragraph (2)) shall 
be increased by $500 for each dependent of the taxpayer 
(as defined in section 152) other than a qualifying child 
described in subsection (c). 
‘‘(B) EXCEPTION FOR CERTAIN NONCITIZENS.—Subpara-
graph (A) shall not apply with respect to any individual 
who would not be a dependent if subparagraph (A) of 
section 152(b)(3) were applied without regard to all that 
follows ‘resident of the United States’. 
‘‘(C) CERTAIN QUALIFYING CHILDREN.—In the case of 
any qualifying child with respect to whom a credit is not 
allowed under this section by reason of paragraph (7), 
such child shall be treated as a dependent to whom 
subparagraph (A) applies. 
‘‘(5) MAXIMUM AMOUNT OF REFUNDABLE CREDIT.— 
‘‘(A) IN GENERAL.—The amount determined under sub-
section (d)(1)(A) with respect to any qualifying child shall 
not exceed $1,400, and such subsection shall be applied 
without regard to paragraph (4) of this subsection. 
‘‘(B) ADJUSTMENT FOR INFLATION.—In the case of a 
taxable year beginning after 2018, the $1,400 amount in
H. R. 1—21 
subparagraph (A) 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 
‘2017’ for ‘2016’ in subparagraph (A)(ii) thereof. 
If any increase under this clause is not a multiple of 
$100, such increase shall be rounded to the next lowest 
multiple of $100. 
‘‘(6) 
EARNED
INCOME
THRESHOLD
FOR
REFUNDABLE 
CREDIT.—Subsection (d)(1)(B)(i) shall be applied by substituting 
‘$2,500’ for ‘$3,000’. 
‘‘(7) SOCIAL SECURITY NUMBER REQUIRED.—No credit shall 
be allowed under this section to a taxpayer with respect to 
any qualifying child unless the taxpayer includes the social 
security number of such child on the return of tax for the 
taxable year. For purposes of the preceding sentence, the term 
‘social security number’ means a social security number issued 
to an individual by the Social Security Administration, but 
only if the social security number is issued— 
‘‘(A) to a citizen of the United States or pursuant 
to subclause (I) (or that portion of subclause (III) that 
relates to subclause (I)) of section 205(c)(2)(B)(i) of the 
Social Security Act, and 
‘‘(B) before the due date for such return.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11023. INCREASED LIMITATION FOR CERTAIN CHARITABLE CON-
TRIBUTIONS. 
(a) IN GENERAL.—Section 170(b)(1) is amended by redesignating 
subparagraph (G) as subparagraph (H) and by inserting after 
subparagraph (F) the following new subparagraph: 
‘‘(G) INCREASED
LIMITATION
FOR
CASH
CONTRIBU-
TIONS.— 
‘‘(i) IN GENERAL.—In the case of any contribution 
of cash to an organization described in subparagraph 
(A), the total amount of such contributions which may 
be taken into account under subsection (a) for any 
taxable year beginning after December 31, 2017, and 
before January 1, 2026, shall not exceed 60 percent 
of the taxpayer’s contribution base for such year. 
‘‘(ii) CARRYOVER.—If the aggregate amount of con-
tributions described in clause (i) exceeds the applicable 
limitation under clause (i) for any taxable year 
described in such clause, such excess shall be treated 
(in a manner consistent with the rules of subsection 
(d)(1)) as a charitable contribution to which clause 
(i) applies in each of the 5 succeeding years in order 
of time. 
‘‘(iii) COORDINATION WITH SUBPARAGRAPHS (A) AND 
(B).— 
‘‘(I) IN
GENERAL.—Contributions taken into 
account under this subparagraph shall not be 
taken into account under subparagraph (A).
H. R. 1—22 
‘‘(II) LIMITATION
REDUCTION.—For each tax-
able year described in clause (i), and each taxable 
year to which any contribution under this subpara-
graph is carried over under clause (ii), subpara-
graph (A) shall be applied by reducing (but not 
below zero) the contribution limitation allowed for 
the taxable year under such subparagraph by the 
aggregate 
contributions 
allowed 
under 
this 
subparagraph for such taxable year, and subpara-
graph (B) shall be applied by treating any ref-
erence to subparagraph (A) as a reference to both 
subparagraph (A) and this subparagraph.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to contributions in taxable years beginning after 
December 31, 2017. 
SEC. 11024. INCREASED CONTRIBUTIONS TO ABLE ACCOUNTS. 
(a) INCREASE IN LIMITATION FOR CONTRIBUTIONS FROM COM-
PENSATION OF INDIVIDUALS WITH DISABILITIES.— 
(1) IN GENERAL.—Section 529A(b)(2)(B) is amended to read 
as follows: 
‘‘(B) except in the case of contributions under sub-
section (c)(1)(C), if such contribution to an ABLE account 
would result in aggregate contributions from all contribu-
tors to the ABLE account for the taxable year exceeding 
the sum of— 
‘‘(i) the amount in effect under section 2503(b) 
for the calendar year in which the taxable year begins, 
plus 
‘‘(ii) in the case of any contribution by a designated 
beneficiary described in paragraph (7) before January 
1, 2026, the lesser of— 
‘‘(I) compensation (as defined by section 
219(f)(1)) includible in the designated beneficiary’s 
gross income for the taxable year, or 
‘‘(II) an amount equal to the poverty line for 
a one-person household, as determined for the cal-
endar year preceding the calendar year in which 
the taxable year begins.’’. 
(2) RESPONSIBILITY FOR CONTRIBUTION LIMITATION.—Para-
graph (2) of section 529A(b) is amended by adding at the 
end the following: ‘‘A designated beneficiary (or a person acting 
on behalf of such beneficiary) shall maintain adequate records 
for purposes of ensuring, and shall be responsible for ensuring, 
that the requirements of subparagraph (B)(ii) are met.’’ 
(3) ELIGIBLE
DESIGNATED
BENEFICIARY.—Section 529A(b) 
is amended by adding at the end the following: 
‘‘(7) SPECIAL RULES RELATED TO CONTRIBUTION LIMIT.—For 
purposes of paragraph (2)(B)(ii)— 
‘‘(A) DESIGNATED
BENEFICIARY.—A designated bene-
ficiary described in this paragraph is an employee 
(including an employee within the meaning of section 
401(c)) with respect to whom— 
‘‘(i) no contribution is made for the taxable year 
to a defined contribution plan (within the meaning 
of section 414(i)) with respect to which the require-
ments of section 401(a) or 403(a) are met,
H. R. 1—23 
‘‘(ii) no contribution is made for the taxable year 
to an annuity contract described in section 403(b), and 
‘‘(iii) no contribution is made for the taxable year 
to an eligible deferred compensation plan described 
in section 457(b). 
‘‘(B) POVERTY LINE.—The term ‘poverty line’ has the 
meaning given such term by section 673 of the Community 
Services Block Grant Act (42 U.S.C. 9902).’’. 
(b) ALLOWANCE OF SAVER’S CREDIT FOR ABLE CONTRIBUTIONS 
BY ACCOUNT HOLDER.—Section 25B(d)(1) is amended by striking 
‘‘and’’ at the end of subparagraph (B)(ii), by striking the period 
at the end of subparagraph (C) and inserting ‘‘, and’’, and by 
inserting at the end the following: 
‘‘(D) the amount of contributions made before January 
1, 2026, by such individual to the ABLE account (within 
the meaning of section 529A) of which such individual 
is the designated beneficiary.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after the date of the enact-
ment of this Act. 
SEC. 11025. ROLLOVERS TO ABLE PROGRAMS FROM 529 PROGRAMS. 
(a) IN GENERAL.—Clause (i) of section 529(c)(3)(C) is amended 
by striking ‘‘or’’ at the end of subclause (I), by striking the period 
at the end of subclause (II) and inserting ‘‘, or’’, and by adding 
at the end the following: 
‘‘(III) before January 1, 2026, to an ABLE 
account (as defined in section 529A(e)(6)) of the 
designated beneficiary or a member of the family 
of the designated beneficiary. 
Subclause (III) shall not apply to so much of a distribu-
tion which, when added to all other contributions made 
to the ABLE account for the taxable year, exceeds 
the limitation under section 529A(b)(2)(B)(i).’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to distributions after the date of the enactment of 
this Act. 
SEC. 11026. TREATMENT OF CERTAIN INDIVIDUALS PERFORMING 
SERVICES IN THE SINAI PENINSULA OF EGYPT. 
(a) IN GENERAL.—For purposes of the following provisions of 
the Internal Revenue Code of 1986, with respect to the applicable 
period, a qualified hazardous duty area shall be treated in the 
same manner as if it were a combat zone (as determined under 
section 112 of such Code): 
(1) Section 2(a)(3) (relating to special rule where deceased 
spouse was in missing status). 
(2) Section 112 (relating to the exclusion of certain combat 
pay of members of the Armed Forces). 
(3) Section 692 (relating to income taxes of members of 
Armed Forces on death). 
(4) Section 2201 (relating to members of the Armed Forces 
dying in combat zone or by reason of combat-zone-incurred 
wounds, etc.). 
(5) Section 3401(a)(1) (defining wages relating to combat 
pay for members of the Armed Forces).
H. R. 1—24 
(6) Section 4253(d) (relating to the taxation of phone service 
originating from a combat zone from members of the Armed 
Forces). 
(7) Section 6013(f)(1) (relating to joint return where indi-
vidual is in missing status). 
(8) Section 7508 (relating to time for performing certain 
acts postponed by reason of service in combat zone). 
(b) QUALIFIED HAZARDOUS DUTY AREA.—For purposes of this 
section, the term ‘‘qualified hazardous duty area’’ means the Sinai 
Peninsula of Egypt, if as of the date of the enactment of this 
section any member of the Armed Forces of the United States 
is entitled to special pay under section 310 of title 37, United 
States Code (relating to special pay; duty subject to hostile fire 
or imminent danger), for services performed in such location. Such 
term includes such location only during the period such entitlement 
is in effect. 
(c) APPLICABLE PERIOD.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
applicable period is— 
(A) the portion of the first taxable year ending after 
June 9, 2015, which begins on such date, and 
(B) any subsequent taxable year beginning before 
January 1, 2026. 
(2) WITHHOLDING.—In the case of subsection (a)(5), the 
applicable period is— 
(A) the portion of the first taxable year ending after 
the date of the enactment of this Act which begins on 
such date, and 
(B) any subsequent taxable year beginning before 
January 1, 2026. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
provisions of this section shall take effect on June 9, 2015. 
(2) WITHHOLDING.—Subsection (a)(5) shall apply to remu-
neration paid after the date of the enactment of this Act. 
SEC. 11027. TEMPORARY REDUCTION IN MEDICAL EXPENSE DEDUC-
TION FLOOR. 
(a) IN GENERAL.—Subsection (f) of section 213 is amended 
to read as follows: 
‘‘(f) SPECIAL RULES
FOR 2013 THROUGH 2018.—In the case 
of any taxable year— 
‘‘(1) beginning after December 31, 2012, and ending before 
January 1, 2017, in the case of a taxpayer if such taxpayer 
or such taxpayer’s spouse has attained age 65 before the close 
of such taxable year, and 
‘‘(2) beginning after December 31, 2016, and ending before 
January 1, 2019, in the case of any taxpayer, 
subsection (a) shall be applied with respect to a taxpayer by sub-
stituting ‘7.5 percent’ for ‘10 percent’.’’. 
(b) MINIMUM
TAX
PREFERENCE
NOT
TO
APPLY.—Section 
56(b)(1)(B) is amended by adding at the end the following new 
sentence: ‘‘This subparagraph shall not apply to taxable years begin-
ning after December 31, 2016, and ending before January 1, 2019’’. 
(c) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2016.
H. R. 1—25 
SEC. 11028. RELIEF FOR 2016 DISASTER AREAS. 
(a) IN GENERAL.—For purposes of this section, the term ‘‘2016 
disaster area’’ means any area with respect to which a major 
disaster has been declared by the President under section 401 
of the Robert T. Stafford Disaster Relief and Emergency Assistance 
Act during calendar year 2016. 
(b) SPECIAL RULES
FOR USE
OF RETIREMENT FUNDS WITH 
RESPECT TO AREAS DAMAGED BY 2016 DISASTERS.— 
(1) TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS.— 
(A) IN GENERAL.—Section 72(t) of the Internal Revenue 
Code of 1986 shall not apply to any qualified 2016 disaster 
distribution. 
(B) AGGREGATE DOLLAR LIMITATION.— 
(i) IN GENERAL.—For purposes of this subsection, 
the aggregate amount of distributions received by an 
individual which may be treated as qualified 2016 
disaster distributions for any taxable year shall not 
exceed the excess (if any) of— 
(I) $100,000, over 
(II) the aggregate amounts treated as qualified 
2016 disaster distributions received by such indi-
vidual for all prior taxable years. 
(ii) TREATMENT OF PLAN DISTRIBUTIONS.—If a dis-
tribution to an individual would (without regard to 
clause (i)) be a qualified 2016 disaster distribution, 
a plan shall not be treated as violating any requirement 
of this title merely because the plan treats such dis-
tribution as a qualified 2016 disaster distribution, 
unless the aggregate amount of such distributions from 
all plans maintained by the employer (and any member 
of any controlled group which includes the employer) 
to such individual exceeds $100,000. 
(iii) CONTROLLED GROUP.—For purposes of clause 
(ii), the term ‘‘controlled group’’ means any group 
treated as a single employer under subsection (b), (c), 
(m), or (o) of section 414 of the Internal Revenue Code 
of 1986. 
(C) AMOUNT DISTRIBUTED MAY BE REPAID.— 
(i) IN GENERAL.—Any individual who receives a 
qualified 2016 disaster distribution may, at any time 
during the 3-year period beginning on the day after 
the date on which such distribution was received, make 
one or more contributions in an aggregate amount 
not to exceed the amount of such distribution to an 
eligible retirement plan of which such individual is 
a beneficiary and to which a rollover contribution of 
such distribution could be made under section 402(c), 
403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the 
Internal Revenue Code of 1986, as the case may be. 
(ii) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS 
FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.— 
For purposes of the Internal Revenue Code of 1986, 
if a contribution is made pursuant to clause (i) with 
respect to a qualified 2016 disaster distribution from 
an eligible retirement plan other than an individual 
retirement plan, then the taxpayer shall, to the extent 
of the amount of the contribution, be treated as having
H. R. 1—26 
received the qualified 2016 disaster distribution in an 
eligible rollover distribution (as defined in section 
402(c)(4) of the Internal Revenue Code of 1986) and 
as having transferred the amount to the eligible retire-
ment plan in a direct trustee to trustee transfer within 
60 days of the distribution. 
(iii) TREATMENT
OF
REPAYMENTS
FOR
DISTRIBU-
TIONS FROM IRAS.—For purposes of the Internal Rev-
enue Code of 1986, if a contribution is made pursuant 
to clause (i) with respect to a qualified 2016 disaster 
distribution from an individual retirement plan (as 
defined by section 7701(a)(37) of the Internal Revenue 
Code of 1986), then, to the extent of the amount of 
the contribution, the qualified 2016 disaster distribu-
tion shall be treated as a distribution described in 
section 408(d)(3) of such Code and as having been 
transferred to the eligible retirement plan in a direct 
trustee to trustee transfer within 60 days of the dis-
tribution. 
(D) DEFINITIONS.—For purposes of this paragraph— 
(i) QUALIFIED 2016 DISASTER DISTRIBUTION.—Except 
as provided in subparagraph (B), the term ‘‘qualified 
2016 disaster distribution’’ means any distribution 
from an eligible retirement plan made on or after 
January 1, 2016, and before January 1, 2018, to an 
individual whose principal place of abode at any time 
during calendar year 2016 was located in a disaster 
area described in subsection (a) and who has sustained 
an economic loss by reason of the events giving rise 
to the Presidential declaration described in subsection 
(a) which was applicable to such area. 
(ii) 
ELIGIBLE
RETIREMENT
PLAN.—The 
term 
‘‘eligible retirement plan’’ shall have the meaning given 
such term by section 402(c)(8)(B) of the Internal Rev-
enue Code of 1986. 
(E) INCOME INCLUSION SPREAD OVER 3-YEAR PERIOD.— 
(i) IN GENERAL.—In the case of any qualified 2016 
disaster distribution, unless the taxpayer elects not 
to have this subparagraph apply for any taxable year, 
any amount required to be included in gross income 
for such taxable year shall be so included ratably over 
the 3-taxable-year period beginning with such taxable 
year. 
(ii) SPECIAL RULE.—For purposes of clause (i), rules 
similar to the rules of subparagraph (E) of section 
408A(d)(3) of the Internal Revenue Code of 1986 shall 
apply. 
(F) SPECIAL RULES.— 
(i) EXEMPTION
OF
DISTRIBUTIONS
FROM
TRUSTEE 
TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For 
purposes of sections 401(a)(31), 402(f), and 3405 of 
the Internal Revenue Code of 1986, qualified 2016 
disaster distribution shall not be treated as eligible 
rollover distributions. 
(ii) 
QUALIFIED
2016
DISASTER
DISTRIBUTIONS 
TREATED
AS
MEETING
PLAN
DISTRIBUTION
REQUIRE-
MENTS.—For purposes of the Internal Revenue Code
H. R. 1—27 
of 1986, a qualified 2016 disaster distribution shall 
be treated as meeting the requirements of sections 
401(k)(2)(B)(i), 
403(b)(7)(A)(ii), 
403(b)(11), 
and 
457(d)(1)(A) of the Internal Revenue Code of 1986. 
(2) PROVISIONS RELATING TO PLAN AMENDMENTS.— 
(A) IN
GENERAL.—If this paragraph applies to any 
amendment to any plan or annuity contract, such plan 
or contract shall be treated as being operated in accordance 
with the terms of the plan during the period described 
in subparagraph (B)(ii)(I). 
(B) AMENDMENTS TO WHICH SUBSECTION APPLIES.— 
(i) IN GENERAL.—This paragraph shall apply to 
any amendment to any plan or annuity contract which 
is made— 
(I) pursuant to any provision of this section, 
or pursuant to any regulation under any provision 
of this section, and 
(II) on or before the last day of the first plan 
year beginning on or after January 1, 2018, or 
such later date as the Secretary prescribes. 
In the case of a governmental plan (as defined in 
section 414(d) of the Internal Revenue Code of 1986), 
subclause (II) shall be applied by substituting the date 
which is 2 years after the date otherwise applied under 
subclause (II). 
(ii) CONDITIONS.—This paragraph shall not apply 
to any amendment to a plan or contract unless such 
amendment applies retroactively for such period, and 
shall not apply to any such amendment unless the 
plan or contract is operated as if such amendment 
were in effect during the period— 
(I) beginning on the date that this section 
or the regulation described in clause (i)(I) takes 
effect (or in the case of a plan or contract amend-
ment not required by this section or such regula-
tion, the effective date specified by the plan), and 
(II) ending on the date described in clause 
(i)(II) (or, if earlier, the date the plan or contract 
amendment is adopted). 
(c) SPECIAL RULES FOR PERSONAL CASUALTY LOSSES RELATED 
TO 2016 MAJOR DISASTER.— 
(1) IN GENERAL.—If an individual has a net disaster loss 
for any taxable year beginning after December 31, 2015, and 
before January 1, 2018— 
(A) 
the 
amount 
determined 
under 
section 
165(h)(2)(A)(ii) of the Internal Revenue Code of 1986 shall 
be equal to the sum of— 
(i) such net disaster loss, and 
(ii) so much of the excess referred to in the matter 
preceding clause (i) of section 165(h)(2)(A) of such Code 
(reduced by the amount in clause (i) of this subpara-
graph) as exceeds 10 percent of the adjusted gross 
income of the individual, 
(B) section 165(h)(1) of such Code shall be applied 
by substituting ‘‘$500’’ for ‘‘$500 ($100 for taxable years 
beginning after December 31, 2009)’’,
H. R. 1—28 
(C) the standard deduction determined under section 
63(c) of such Code shall be increased by the net disaster 
loss, and 
(D) section 56(b)(1)(E) of such Code shall not apply 
to so much of the standard deduction as is attributable 
to the increase under subparagraph (C) of this paragraph. 
(2) NET DISASTER LOSS.—For purposes of this subsection, 
the term ‘‘net disaster loss’’ means the excess of qualified dis-
aster-related personal casualty losses over personal casualty 
gains (as defined in section 165(h)(3)(A) of the Internal Revenue 
Code of 1986). 
(3) QUALIFIED
DISASTER-RELATED
PERSONAL
CASUALTY 
LOSSES.—For purposes of this paragraph, the term ‘‘qualified 
disaster-related 
personal 
casualty 
losses’’ 
means 
losses 
described in section 165(c)(3) of the Internal Revenue Code 
of 1986 which arise in a disaster area described in subsection 
(a) on or after January 1, 2016, and which are attributable 
to the events giving rise to the Presidential declaration 
described in subsection (a) which was applicable to such area. 
PART IV—EDUCATION 
SEC. 11031. TREATMENT OF STUDENT LOANS DISCHARGED ON 
ACCOUNT OF DEATH OR DISABILITY. 
(a) IN GENERAL.—Section 108(f) is amended by adding at the 
end the following new paragraph: 
‘‘(5) DISCHARGES ON ACCOUNT OF DEATH OR DISABILITY.— 
‘‘(A) IN GENERAL.—In the case of an individual, gross 
income does not include any amount which (but for this 
subsection) would be includible in gross income for such 
taxable year by reasons of the discharge (in whole or in 
part) of any loan described in subparagraph (B) after 
December 31, 2017, and before January 1, 2026, if such 
discharge was— 
‘‘(i) pursuant to subsection (a) or (d) of section 
437 of the Higher Education Act of 1965 or the parallel 
benefit under part D of title IV of such Act (relating 
to the repayment of loan liability), 
‘‘(ii) pursuant to section 464(c)(1)(F) of such Act, 
or 
‘‘(iii) otherwise discharged on account of the death 
or total and permanent disability of the student. 
‘‘(B) LOANS DESCRIBED.—A loan is described in this 
subparagraph if such loan is— 
‘‘(i) a student loan (as defined in paragraph (2)), 
or 
‘‘(ii) a private education loan (as defined in section 
140(7) of the Consumer Credit Protection Act (15 
U.S.C. 1650(7))).’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to discharges of indebtedness after December 31, 2017. 
SEC. 11032. 529 ACCOUNT FUNDING FOR ELEMENTARY AND SEC-
ONDARY EDUCATION. 
(a) IN GENERAL.— 
(1) IN GENERAL.—Section 529(c) is amended by adding at 
the end the following new paragraph:
H. R. 1—29 
‘‘(7) TREATMENT
OF
ELEMENTARY
AND
SECONDARY
TUI-
TION.—Any reference in this subsection to the term ‘qualified 
higher education expense’ shall include a reference to expenses 
for tuition in connection with enrollment or attendance at an 
elementary or secondary public, private, or religious school.’’. 
(2) LIMITATION.—Section 529(e)(3)(A) is amended by adding 
at the end the following: ‘‘The amount of cash distributions 
from all qualified tuition programs described in subsection 
(b)(1)(A)(ii) with respect to a beneficiary during any taxable 
year shall, in the aggregate, include not more than $10,000 
in expenses described in subsection (c)(7) incurred during the 
taxable year.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to distributions made after December 31, 2017. 
PART V—DEDUCTIONS AND EXCLUSIONS 
SEC. 11041. SUSPENSION OF DEDUCTION FOR PERSONAL EXEMPTIONS. 
(a) IN GENERAL.—Subsection (d) of section 151 is amended— 
(1) by striking ‘‘In the case of’’ in paragraph (4) and 
inserting ‘‘Except as provided in paragraph (5), in the case 
of’’, and 
(2) by adding at the end the following new paragraph: 
‘‘(5) SPECIAL
RULES
FOR
TAXABLE
YEARS
2018
THROUGH 
2025.—In the case of a taxable year beginning after December 
31, 2017, and before January 1, 2026— 
‘‘(A) 
EXEMPTION
AMOUNT.—The 
term 
‘exemption 
amount’ means zero. 
‘‘(B) REFERENCES.—For purposes of any other provision 
of this title, the reduction of the exemption amount to 
zero under subparagraph (A) shall not be taken into 
account in determining whether a deduction is allowed 
or allowable, or whether a taxpayer is entitled to a deduc-
tion, under this section.’’. 
(b) APPLICATION TO ESTATES AND TRUSTS.—Section 642(b)(2)(C) 
is amended by adding at the end the following new clause: 
‘‘(iii) YEARS WHEN PERSONAL EXEMPTION AMOUNT 
IS ZERO.— 
‘‘(I) IN GENERAL.—In the case of any taxable 
year in which the exemption amount under section 
151(d) is zero, clause (i) shall be applied by sub-
stituting ‘$4,150’ for ‘the exemption amount under 
section 151(d)’. 
‘‘(II) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year 
after 2018, the $4,150 amount in subparagraph 
(A) shall be increased in the same manner as 
provided in section 6334(d)(4)(C).’’. 
(c) MODIFICATION OF WAGE WITHHOLDING RULES.— 
(1) IN GENERAL.—Section 3402(a)(2) is amended by striking 
‘‘means the amount’’ and all that follows and inserting ‘‘means 
the amount by which the wages exceed the taxpayer’s with-
holding allowance, prorated to the payroll period.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 3401 is amended by striking subsection 
(e).
H. R. 1—30 
(B) Paragraphs (1) and (2) of section 3402(f) are 
amended to read as follows: 
‘‘(1) IN
GENERAL.—Under rules determined by the Sec-
retary, an employee receiving wages shall on any day be entitled 
to a withholding allowance determined based on— 
‘‘(A) whether the employee is an individual for whom 
a deduction is allowable with respect to another taxpayer 
under section 151; 
‘‘(B) if the employee is married, whether the employee’s 
spouse is entitled to an allowance, or would be so entitled 
if such spouse were an employee receiving wages, under 
subparagraph (A) or (D), but only if such spouse does 
not have in effect a withholding allowance certificate 
claiming such allowance; 
‘‘(C) the number of individuals with respect to whom, 
on the basis of facts existing at the beginning of such 
day, there may reasonably be expected to be allowable 
a credit under section 24(a) for the taxable year under 
subtitle A in respect of which amounts deducted and with-
held under this chapter in the calendar year in which 
such day falls are allowed as a credit; 
‘‘(D) any additional amounts to which the employee 
elects to take into account under subsection (m), but only 
if the employee’s spouse does not have in effect a with-
holding allowance certificate making such an election; 
‘‘(E) the standard deduction allowable to such employee 
(one-half of such standard deduction in the case of an 
employee who is married (as determined under section 
7703) and whose spouse is an employee receiving wages 
subject to withholding); and 
‘‘(F) whether the employee has withholding allowance 
certificates in effect with respect to more than 1 employer. 
‘‘(2) ALLOWANCE CERTIFICATES.— 
‘‘(A) ON
COMMENCEMENT
OF
EMPLOYMENT.—On or 
before the date of the commencement of employment with 
an employer, the employee shall furnish the employer with 
a signed withholding allowance certificate relating to the 
withholding allowance claimed by the employee, which 
shall in no event exceed the amount to which the employee 
is entitled. 
‘‘(B) CHANGE OF STATUS.—If, on any day during the 
calendar year, an employee’s withholding allowance is in 
excess of the withholding allowance to which the employee 
would be entitled had the employee submitted a true and 
accurate withholding allowance certificate to the employer 
on that day, the employee shall within 10 days thereafter 
furnish the employer with a new withholding allowance 
certificate. If, on any day during the calendar year, an 
employee’s withholding allowance is greater than the with-
holding allowance claimed, the employee may furnish the 
employer with a new withholding allowance certificate 
relating to the withholding allowance to which the 
employee is so entitled, which shall in no event exceed 
the amount to which the employee is entitled on such 
day. 
‘‘(C) CHANGE
OF
STATUS
WHICH
AFFECTS
NEXT
CAL-
ENDAR YEAR.—If on any day during the calendar year the
H. R. 1—31 
withholding allowance to which the employee will be, or 
may reasonably be expected to be, entitled at the beginning 
of the employee’s next taxable year under subtitle A is 
different from the allowance to which the employee is enti-
tled on such day, the employee shall, in such cases and 
at such times as the Secretary shall by regulations pre-
scribe, furnish the employer with a withholding allowance 
certificate relating to the withholding allowance which the 
employee claims with respect to such next taxable year, 
which shall in no event exceed the withholding allowance 
to which the employee will be, or may reasonably be 
expected to be, so entitled.’’. 
(C) Subsections (b)(1), (b)(2), (f)(3), (f)(4), (f)(5), (f)(7) 
(including the heading thereof), (g)(4), (l)(1), (l)(2), and (n) 
of section 3402 are each amended by striking ‘‘exemption’’ 
each place it appears and inserting ‘‘allowance’’. 
(D) The heading of section 3402(f) is amended by 
striking ‘‘EXEMPTIONS’’ and inserting ‘‘ALLOWANCE’’. 
(E) Section 3402(m) is amended by striking ‘‘additional 
withholding allowances or additional reductions in with-
holding under this subsection. In determining the number 
of additional withholding allowances’’ and inserting ‘‘an 
additional withholding allowance or additional reductions 
in withholding under this subsection. In determining the 
additional withholding allowance’’. 
(F) Paragraphs (3) and (4) of section 3405(a) (and the 
heading for such paragraph (4)) are each amended by 
striking ‘‘exemption’’ each place it appears and inserting 
‘‘allowance’’. 
(G) Section 3405(a)(4) is amended by striking ‘‘shall 
be determined’’ and all that follows through ‘‘3 withholding 
exemptions’’ and inserting ‘‘shall be determined under rules 
prescribed by the Secretary’’. 
(d) EXCEPTION
FOR DETERMINING PROPERTY EXEMPT FROM 
LEVY.—Section 6334(d) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) YEARS WHEN PERSONAL EXEMPTION AMOUNT IS ZERO.— 
‘‘(A) IN
GENERAL.—In the case of any taxable year 
in which the exemption amount under section 151(d) is 
zero, paragraph (2) shall not apply and for purposes of 
paragraph (1) the term ‘exempt amount’ means an amount 
equal to— 
‘‘(i) the sum of the amount determined under 
subparagraph (B) and the standard deduction, divided 
by 
‘‘(ii) 52. 
‘‘(B) AMOUNT DETERMINED.—For purposes of subpara-
graph (A), the amount determined under this subparagraph 
is $4,150 multiplied by the number of the taxpayer’s 
dependents for the taxable year in which the levy occurs. 
‘‘(C) INFLATION ADJUSTMENT.—In the case of any tax-
able year beginning in a calendar year after 2018, the 
$4,150 amount in subparagraph (B) 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
H. R. 1—32 
the taxable year begins, determined by substituting 
‘2017’ for ‘2016’ in subparagraph (A)(ii) thereof. 
If any increase determined under the preceding sentence 
is not a multiple of $100, such increase shall be rounded 
to the next lowest multiple of $100. 
‘‘(D) VERIFIED STATEMENT.—Unless the taxpayer sub-
mits to the Secretary a written and properly verified state-
ment specifying the facts necessary to determine the proper 
amount under subparagraph (A), subparagraph (A) shall 
be applied as if the taxpayer were a married individual 
filing a separate return with no dependents.’’. 
(e) PERSONS REQUIRED TO MAKE RETURNS OF INCOME.—Section 
6012 is amended by adding at the end the following new subsection: 
‘‘(f) SPECIAL RULE FOR TAXABLE YEARS 2018 THROUGH 2025.— 
In the case of a taxable year beginning after December 31, 2017, 
and before January 1, 2026, subsection (a)(1) shall not apply, and 
every individual who has gross income for the taxable year shall 
be required to make returns with respect to income taxes under 
subtitle A, except that a return shall not be required of— 
‘‘(1) an individual who is not married (determined by 
applying section 7703) and who has gross income for the taxable 
year which does not exceed the standard deduction applicable 
to such individual for such taxable year under section 63, 
or 
‘‘(2) an individual entitled to make a joint return if— 
‘‘(A) the gross income of such individual, when com-
bined with the gross income of such individual’s spouse, 
for the taxable year does not exceed the standard deduction 
which would be applicable to the taxpayer for such taxable 
year under section 63 if such individual and such individ-
ual’s spouse made a joint return, 
‘‘(B) such individual and such individual’s spouse have 
the same household as their home at the close of the 
taxable year, 
‘‘(C) such individual’s spouse does not make a separate 
return, and 
‘‘(D) neither such individual nor such individual’s 
spouse is an individual described in section 63(c)(5) who 
has income (other than earned income) in excess of the 
amount in effect under section 63(c)(5)(A).’’. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
amendments made by this section shall apply to taxable years 
beginning after December 31, 2017. 
(2) WAGE WITHHOLDING.—The Secretary of the Treasury 
may administer section 3402 for taxable years beginning before 
January 1, 2019, without regard to the amendments made 
by subsections (a) and (c). 
SEC. 11042. LIMITATION ON DEDUCTION FOR STATE AND LOCAL, ETC. 
TAXES. 
(a) IN GENERAL.—Subsection (b) of section 164 is amended 
by adding at the end the following new paragraph: 
‘‘(6) LIMITATION ON INDIVIDUAL DEDUCTIONS FOR TAXABLE 
YEARS 2018 THROUGH 2025.—In the case of an individual and 
a taxable year beginning after December 31, 2017, and before 
January 1, 2026—
H. R. 1—33 
‘‘(A) foreign real property taxes shall not be taken 
into account under subsection (a)(1), and 
‘‘(B) the aggregate amount of taxes taken into account 
under paragraphs (1), (2), and (3) of subsection (a) and 
paragraph (5) of this subsection for any taxable year shall 
not exceed $10,000 ($5,000 in the case of a married indi-
vidual filing a separate return). 
The preceding sentence shall not apply to any foreign taxes 
described in subsection (a)(3) or to any taxes described in 
paragraph (1) and (2) of subsection (a) which are paid or accrued 
in carrying on a trade or business or an activity described 
in section 212. For purposes of subparagraph (B), an amount 
paid in a taxable year beginning before January 1, 2018, with 
respect to a State or local income tax imposed for a taxable 
year beginning after December 31, 2017, shall be treated as 
paid on the last day of the taxable year for which such tax 
is so imposed.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2016. 
SEC. 11043. LIMITATION ON DEDUCTION FOR QUALIFIED RESIDENCE 
INTEREST. 
(a) IN GENERAL.—Section 163(h)(3) is amended by adding at 
the end the following new subparagraph: 
‘‘(F) SPECIAL RULES FOR TAXABLE YEARS 2018 THROUGH 
2025.— 
‘‘(i) IN
GENERAL.—In the case of taxable years 
beginning after December 31, 2017, and before January 
1, 2026— 
‘‘(I) DISALLOWANCE OF HOME EQUITY INDEBTED-
NESS
INTEREST.—Subparagraph (A)(ii) shall not 
apply. 
‘‘(II) LIMITATION
ON
ACQUISITION
INDEBTED-
NESS.—Subparagraph (B)(ii) shall be applied by 
substituting ‘$750,000 ($375,000’ for ‘$1,000,000 
($500,000’. 
‘‘(III) TREATMENT OF INDEBTEDNESS INCURRED 
ON OR BEFORE DECEMBER 15, 2017.—Subclause (II) 
shall not apply to any indebtedness incurred on 
or before December 15, 2017, and, in applying 
such subclause to any indebtedness incurred after 
such date, the limitation under such subclause 
shall be reduced (but not below zero) by the 
amount of any indebtedness incurred on or before 
December 15, 2017, which is treated as acquisition 
indebtedness for purposes of this subsection for 
the taxable year. 
‘‘(IV) BINDING CONTRACT EXCEPTION.—In the 
case of a taxpayer who enters into a written 
binding contract before December 15, 2017, to close 
on the purchase of a principal residence before 
January 1, 2018, and who purchases such resi-
dence before April 1, 2018, subclause (III) shall 
be applied by substituting ‘April 1, 2018’ for 
‘December 15, 2017’. 
‘‘(ii) TREATMENT OF LIMITATION IN TAXABLE YEARS 
AFTER DECEMBER 31, 2025.—In the case of taxable years
H. R. 1—34 
beginning after December 31, 2025, the limitation 
under subparagraph (B)(ii) shall be applied to the 
aggregate amount of indebtedness of the taxpayer 
described in subparagraph (B)(i) without regard to the 
taxable year in which the indebtedness was incurred. 
‘‘(iii) TREATMENT OF REFINANCINGS OF INDEBTED-
NESS.— 
‘‘(I) IN GENERAL.—In the case of any indebted-
ness which is incurred to refinance indebtedness, 
such refinanced indebtedness shall be treated for 
purposes of clause (i)(III) as incurred on the date 
that the original indebtedness was incurred to the 
extent the amount of the indebtedness resulting 
from such refinancing does not exceed the amount 
of the refinanced indebtedness. 
‘‘(II) LIMITATION ON PERIOD OF REFINANCING.— 
Subclause (I) shall not apply to any indebtedness 
after the expiration of the term of the original 
indebtedness or, if the principal of such original 
indebtedness is not amortized over its term, the 
expiration of the term of the 1st refinancing of 
such indebtedness (or if earlier, the date which 
is 30 years after the date of such 1st refinancing). 
‘‘(iv) COORDINATION WITH EXCLUSION OF INCOME 
FROM DISCHARGE OF INDEBTEDNESS.—Section 108(h)(2) 
shall be applied without regard to this subparagraph.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11044. MODIFICATION OF DEDUCTION FOR PERSONAL CASUALTY 
LOSSES. 
(a) IN GENERAL.—Subsection (h) of section 165 is amended 
by adding at the end the following new paragraph: 
‘‘(5) LIMITATION FOR TAXABLE YEARS 2018 THROUGH 2025.— 
‘‘(A) IN GENERAL.—In the case of an individual, except 
as provided in subparagraph (B), any personal casualty 
loss which (but for this paragraph) would be deductible 
in a taxable year beginning after December 31, 2017, and 
before January 1, 2026, shall be allowed as a deduction 
under subsection (a) only to the extent it is attributable 
to a Federally declared disaster (as defined in subsection 
(i)(5)). 
‘‘(B) EXCEPTION
RELATED
TO
PERSONAL
CASUALTY 
GAINS.—If a taxpayer has personal casualty gains for any 
taxable year to which subparagraph (A) applies— 
‘‘(i) subparagraph (A) shall not apply to the portion 
of the personal casualty loss not attributable to a Fed-
erally declared disaster (as so defined) to the extent 
such loss does not exceed such gains, and 
‘‘(ii) in applying paragraph (2) for purposes of 
subparagraph (A) to the portion of personal casualty 
loss which is so attributable to such a disaster, the 
amount of personal casualty gains taken into account 
under paragraph (2)(A) shall be reduced by the portion 
of such gains taken into account under clause (i).’’.
H. R. 1—35 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to losses incurred in taxable years beginning after 
December 31, 2017. 
SEC. 11045. SUSPENSION OF MISCELLANEOUS ITEMIZED DEDUCTIONS. 
(a) IN GENERAL.—Section 67 is amended by adding at the 
end the following new subsection: 
‘‘(g) SUSPENSION FOR TAXABLE YEARS 2018 THROUGH 2025.— 
Notwithstanding subsection (a), no miscellaneous itemized deduc-
tion shall be allowed for any taxable year beginning after December 
31, 2017, and before January 1, 2026.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11046. SUSPENSION OF OVERALL LIMITATION ON ITEMIZED 
DEDUCTIONS. 
(a) IN GENERAL.—Section 68 is amended by adding at the 
end the following new subsection: 
‘‘(f) SECTION NOT TO APPLY.—This section shall not apply to 
any taxable year beginning after December 31, 2017, and before 
January 1, 2026.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11047. SUSPENSION OF EXCLUSION FOR QUALIFIED BICYCLE 
COMMUTING REIMBURSEMENT. 
(a) IN GENERAL.—Section 132(f) is amended by adding at the 
end the following new paragraph: 
‘‘(8) SUSPENSION
OF
QUALIFIED
BICYCLE
COMMUTING 
REIMBURSEMENT EXCLUSION.—Paragraph (1)(D) shall not apply 
to any taxable year beginning after December 31, 2017, and 
before January 1, 2026.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11048. SUSPENSION OF EXCLUSION FOR QUALIFIED MOVING 
EXPENSE REIMBURSEMENT. 
(a) IN GENERAL.—Section 132(g) is amended— 
(1) by striking ‘‘For purposes of this section, the term’’ 
and inserting ‘‘For purposes of this section— 
‘‘(1) IN GENERAL.—The term’’, and 
(2) by adding at the end the following new paragraph: 
‘‘(2) SUSPENSION FOR TAXABLE YEARS 2018 THROUGH 2025.— 
Except in the case of a member of the Armed Forces of the 
United States on active duty who moves pursuant to a military 
order and incident to a permanent change of station, subsection 
(a)(6) shall not apply to any taxable year beginning after 
December 31, 2017, and before January 1, 2026.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11049. SUSPENSION OF DEDUCTION FOR MOVING EXPENSES. 
(a) IN GENERAL.—Section 217 is amended by adding at the 
end the following new subsection: 
‘‘(k) SUSPENSION
OF DEDUCTION
FOR TAXABLE YEARS 2018 
THROUGH 2025.—Except in the case of an individual to whom 
subsection (g) applies, this section shall not apply to any taxable
H. R. 1—36 
year beginning after December 31, 2017, and before January 1, 
2026.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11050. LIMITATION ON WAGERING LOSSES. 
(a) IN GENERAL.—Section 165(d) is amended by adding at the 
end the following: ‘‘For purposes of the preceding sentence, in 
the case of taxable years beginning after December 31, 2017, and 
before January 1, 2026, the term ‘losses from wagering transactions’ 
includes any deduction otherwise allowable under this chapter 
incurred in carrying on any wagering transaction.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2017. 
SEC. 11051. REPEAL OF DEDUCTION FOR ALIMONY PAYMENTS. 
(a) IN GENERAL.—Part VII of subchapter B is amended by 
striking section 215 (and by striking the item relating to such 
section in the table of sections for such subpart). 
(b) CONFORMING AMENDMENTS.— 
(1) CORRESPONDING REPEAL OF PROVISIONS PROVIDING FOR 
INCLUSION OF ALIMONY IN GROSS INCOME.— 
(A) Subsection (a) of section 61 is amended by striking 
paragraph (8) and by redesignating paragraphs (9) through 
(15) as paragraphs (8) through (14), respectively. 
(B) Part II of subchapter B of chapter 1 is amended 
by striking section 71 (and by striking the item relating 
to such section in the table of sections for such part). 
(C) Subpart F of part I of subchapter J of chapter 
1 is amended by striking section 682 (and by striking 
the item relating to such section in the table of sections 
for such subpart). 
(2) RELATED TO REPEAL OF SECTION 215.— 
(A) Section 62(a) is amended by striking paragraph 
(10). 
(B) Section 3402(m)(1) is amended by striking ‘‘(other 
than paragraph (10) thereof)’’. 
(C) Section 6724(d)(3) is amended by striking subpara-
graph (C) and by redesignating subparagraph (D) as 
subparagraph (C). 
(3) RELATED TO REPEAL OF SECTION 71.— 
(A) Section 121(d)(3) is amended— 
(i) by striking ‘‘(as defined in section 71(b)(2))’’ 
in subparagraph (B), and 
(ii) by adding at the end the following new 
subparagraph: 
‘‘(C) DIVORCE OR SEPARATION INSTRUMENT.—For pur-
poses of this paragraph, the term ‘divorce or separation 
instrument’ means— 
‘‘(i) a decree of divorce or separate maintenance 
or a written instrument incident to such a decree, 
‘‘(ii) a written separation agreement, or 
‘‘(iii) a decree (not described in clause (i)) requiring 
a spouse to make payments for the support or mainte-
nance of the other spouse.’’. 
(B) Section 152(d)(5) is amended to read as follows: 
‘‘(5) SPECIAL RULES FOR SUPPORT.— 
‘‘(A) IN GENERAL.—For purposes of this subsection—
H. R. 1—37 
‘‘(i) payments to a spouse of alimony or separate 
maintenance payments shall not be treated as a pay-
ment by the payor spouse for the support of any 
dependent, and 
‘‘(ii) in the case of the remarriage of a parent, 
support of a child received from the parent’s spouse 
shall be treated as received from the parent. 
‘‘(B) ALIMONY OR SEPARATE MAINTENANCE PAYMENT.— 
For purposes of subparagraph (A), the term ‘alimony or 
separate maintenance payment’ means any payment in 
cash if— 
‘‘(i) such payment is received by (or on behalf of) 
a spouse under a divorce or separation instrument 
(as defined in section 121(d)(3)(C)), 
‘‘(ii) in the case of an individual legally separated 
from the individual’s spouse under a decree of divorce 
or of separate maintenance, the payee spouse and the 
payor spouse are not members of the same household 
at the time such payment is made, and 
‘‘(iii) there is no liability to make any such payment 
for any period after the death of the payee spouse 
and there is no liability to make any payment (in 
cash or property) as a substitute for such payments 
after the death of the payee spouse.’’. 
(C) Section 219(f)(1) is amended by striking the third 
sentence. 
(D) Section 220(f)(7) is amended by striking ‘‘subpara-
graph (A) of section 71(b)(2)’’ and inserting ‘‘clause (i) of 
section 121(d)(3)(C)’’. 
(E) Section 223(f)(7) is amended by striking ‘‘subpara-
graph (A) of section 71(b)(2)’’ and inserting ‘‘clause (i) of 
section 121(d)(3)(C)’’. 
(F) Section 382(l)(3)(B)(iii) is amended by striking ‘‘sec-
tion 71(b)(2)’’ and inserting ‘‘section 121(d)(3)(C)’’. 
(G) Section 408(d)(6) is amended by striking ‘‘subpara-
graph (A) of section 71(b)(2)’’ and inserting ‘‘clause (i) of 
section 121(d)(3)(C)’’. 
(4) 
ADDITIONAL
CONFORMING
AMENDMENTS.—Section 
7701(a)(17) is amended— 
(A) by striking ‘‘sections 682 and 2516’’ and inserting 
‘‘section 2516’’, and 
(B) by striking ‘‘such sections’’ each place it appears 
and inserting ‘‘such section’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to— 
(1) any divorce or separation instrument (as defined in 
section 71(b)(2) of the Internal Revenue Code of 1986 as in 
effect before the date of the enactment of this Act) executed 
after December 31, 2018, and 
(2) any divorce or separation instrument (as so defined) 
executed on or before such date and modified after such date 
if the modification expressly provides that the amendments 
made by this section apply to such modification.
H. R. 1—38 
PART VI—INCREASE IN ESTATE AND GIFT TAX 
EXEMPTION 
SEC. 11061. INCREASE IN ESTATE AND GIFT TAX EXEMPTION. 
(a) IN GENERAL.—Section 2010(c)(3) is amended by adding at 
the end the following new subparagraph: 
‘‘(C) INCREASE IN BASIC EXCLUSION AMOUNT.—In the 
case of estates of decedents dying or gifts made after 
December 31, 2017, and before January 1, 2026, subpara-
graph (A) shall be applied by substituting ‘$10,000,000’ 
for ‘$5,000,000’.’’. 
(b) CONFORMING AMENDMENT.—Subsection (g) of section 2001 
is amended to read as follows: 
‘‘(g) MODIFICATIONS TO TAX PAYABLE.— 
‘‘(1) MODIFICATIONS TO GIFT TAX PAYABLE TO REFLECT DIF-
FERENT TAX RATES.—For purposes of applying subsection (b)(2) 
with respect to 1 or more gifts, the rates of tax under subsection 
(c) in effect at the decedent’s death shall, in lieu of the rates 
of tax in effect at the time of such gifts, be used both to 
compute— 
‘‘(A) the tax imposed by chapter 12 with respect to 
such gifts, and 
‘‘(B) the credit allowed against such tax under section 
2505, including in computing— 
‘‘(i) the applicable credit amount under section 
2505(a)(1), and 
‘‘(ii) the sum of the amounts allowed as a credit 
for all preceding periods under section 2505(a)(2). 
‘‘(2) MODIFICATIONS TO ESTATE TAX PAYABLE TO REFLECT 
DIFFERENT
BASIC
EXCLUSION
AMOUNTS.—The Secretary shall 
prescribe such regulations as may be necessary or appropriate 
to carry out this section with respect to any difference 
between— 
‘‘(A) the basic exclusion amount under section 
2010(c)(3) applicable at the time of the decedent’s death, 
and 
‘‘(B) the basic exclusion amount under such section 
applicable with respect to any gifts made by the decedent.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to estates of decedents dying and gifts made after 
December 31, 2017. 
PART VII—EXTENSION OF TIME LIMIT FOR 
CONTESTING IRS LEVY 
SEC. 11071. EXTENSION OF TIME LIMIT FOR CONTESTING IRS LEVY. 
(a) EXTENSION OF TIME FOR RETURN OF PROPERTY SUBJECT 
TO LEVY.—Subsection (b) of section 6343 is amended by striking 
‘‘9 months’’ and inserting ‘‘2 years’’. 
(b) PERIOD OF LIMITATION ON SUITS.—Subsection (c) of section 
6532 is amended— 
(1) by striking ‘‘9 months’’ in paragraph (1) and inserting 
‘‘2 years’’, and 
(2) by striking ‘‘9-month’’ in paragraph (2) and inserting 
‘‘2-year’’.
H. R. 1—39 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to— 
(1) levies made after the date of the enactment of this 
Act, and 
(2) levies made on or before such date if the 9-month 
period has not expired under section 6343(b) of the Internal 
Revenue Code of 1986 (without regard to this section) as of 
such date. 
PART VIII—INDIVIDUAL MANDATE 
SEC. 11081. ELIMINATION OF SHARED RESPONSIBILITY PAYMENT FOR 
INDIVIDUALS FAILING TO MAINTAIN MINIMUM ESSEN-
TIAL COVERAGE. 
(a) IN GENERAL.—Section 5000A(c) is amended— 
(1) in paragraph (2)(B)(iii), by striking ‘‘2.5 percent’’ and 
inserting ‘‘Zero percent’’, and 
(2) in paragraph (3)— 
(A) by striking ‘‘$695’’ in subparagraph (A) and 
inserting ‘‘$0’’, and 
(B) by striking subparagraph (D). 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to months beginning after December 31, 2018. 
Subtitle B—Alternative Minimum Tax 
SEC. 12001. REPEAL OF TAX FOR CORPORATIONS. 
(a) IN GENERAL.—Section 55(a) is amended by striking ‘‘There’’ 
and inserting ‘‘In the case of a taxpayer other than a corporation, 
there’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(c)(6) is amended by adding at the end the 
following new subparagraph: 
‘‘(E) CORPORATIONS.—In the case of a corporation, this 
subsection shall be applied by treating the corporation 
as having a tentative minimum tax of zero.’’. 
(2) Section 53(d)(2) is amended by inserting ‘‘, except that 
in the case of a corporation, the tentative minimum tax shall 
be treated as zero’’ before the period at the end. 
(3)(A) Section 55(b)(1) is amended to read as follows: 
‘‘(1) AMOUNT OF TENTATIVE TAX.— 
‘‘(A) IN GENERAL.—The tentative minimum tax for the 
taxable year is the sum of— 
‘‘(i) 26 percent of so much of the taxable excess 
as does not exceed $175,000, plus 
‘‘(ii) 28 percent of so much of the taxable excess 
as exceeds $175,000. 
The amount determined under the preceding sentence shall 
be reduced by the alternative minimum tax foreign tax 
credit for the taxable year. 
‘‘(B) TAXABLE EXCESS.—For purposes of this subsection, 
the term ‘taxable excess’ means so much of the alternative 
minimum taxable income for the taxable year as exceeds 
the exemption amount. 
‘‘(C) MARRIED INDIVIDUAL FILING SEPARATE RETURN.— 
In the case of a married individual filing a separate return,
H. R. 1—40 
subparagraph (A) shall be applied by substituting 50 per-
cent of the dollar amount otherwise applicable under clause 
(i) and clause (ii) thereof. For purposes of the preceding 
sentence, marital status shall be determined under section 
7703.’’. 
(B) Section 55(b)(3) is amended by striking ‘‘paragraph 
(1)(A)(i)’’ and inserting ‘‘paragraph (1)(A)’’. 
(C) Section 59(a) is amended— 
(i) by striking ‘‘subparagraph (A)(i) or (B)(i) of section 
55(b)(1) (whichever applies) in lieu of the highest rate 
of tax specified in section 1 or 11 (whichever applies)’’ 
in paragraph (1)(C) and inserting ‘‘section 55(b)(1) in lieu 
of the highest rate of tax specified in section 1’’, and 
(ii) in paragraph (2), by striking ‘‘means’’ and all that 
follows and inserting ‘‘means the amount determined under 
the first sentence of section 55(b)(1)(A).’’. 
(D) Section 897(a)(2)(A) is amended by striking ‘‘section 
55(b)(1)(A)’’ and inserting ‘‘section 55(b)(1)’’. 
(E) Section 911(f) is amended— 
(i) in paragraph (1)(B)— 
(I) by striking ‘‘section 55(b)(1)(A)(ii)’’ and inserting 
‘‘section 55(b)(1)(B)’’, and 
(II) by striking ‘‘section 55(b)(1)(A)(i)’’ and inserting 
‘‘section 55(b)(1)(A)’’, and 
(ii) 
in 
paragraph 
(2)(B), 
by 
striking 
‘‘section 
55(b)(1)(A)(ii)’’ each place it appears and inserting ‘‘section 
55(b)(1)(B)’’. 
(4) Section 55(c)(1) is amended by striking ‘‘, the section 
936 credit allowable under section 27(b), and the Puerto Rico 
economic activity credit under section 30A’’. 
(5) Section 55(d), as amended by section 11002, is 
amended— 
(A) by striking paragraph (2) and redesignating para-
graphs (3) and (4) as paragraphs (2) and (3), respectively, 
(B) in paragraph (2) (as so redesignated), by inserting 
‘‘and’’ at the end of subparagraph (B), by striking ‘‘, and’’ 
at the end of subparagraph (C) and inserting a period, 
and by striking subparagraph (D), and 
(C) in paragraph (3) (as so redesignated)— 
(i) by striking ‘‘(b)(1)(A)(i)’’ in subparagraph (B)(i) 
and inserting ‘‘(b)(1)(A)’’, and 
(ii) by striking ‘‘paragraph (3)’’ in subparagraph 
(B)(iii) and inserting ‘‘paragraph (2)’’. 
(6) Section 55 is amended by striking subsection (e). 
(7) Section 56(b)(2) is amended by striking subparagraph 
(C) and by redesignating subparagraph (D) as subparagraph 
(C). 
(8)(A) Section 56 is amended by striking subsections (c) 
and (g). 
(B) Section 847 is amended by striking the last sentence 
of paragraph (9). 
(C) Section 848 is amended by striking subsection (i). 
(9) Section 58(a) is amended by striking paragraph (3) 
and redesignating paragraph (4) as paragraph (3). 
(10) Section 59 is amended by striking subsections (b) 
and (f).
H. R. 1—57 
(2) APPLICATION OF STRAIGHT LINE METHOD TO QUALIFIED 
IMPROVEMENT PROPERTY.—Paragraph (3) of section 168(b) is 
amended— 
(A) by striking subparagraphs (G), (H), and (I), and 
(B) by inserting after subparagraph (F) the following 
new subparagraph: 
‘‘(G) Qualified improvement property described in sub-
section (e)(6).’’. 
(3) ALTERNATIVE DEPRECIATION SYSTEM.— 
(A) ELECTING REAL PROPERTY TRADE OR BUSINESS.— 
Subsection (g) of section 168 is amended— 
(i) in paragraph (1)— 
(I) in subparagraph (D), by striking ‘‘and’’ at 
the end, 
(II) in subparagraph (E), by inserting ‘‘and’’ 
at the end, and 
(III) by inserting after subparagraph (E) the 
following new subparagraph: 
‘‘(F) any property described in paragraph (8),’’, and 
(ii) by adding at the end the following new para-
graph: 
‘‘(8) ELECTING REAL PROPERTY TRADE OR BUSINESS.—The 
property described in this paragraph shall consist of any non-
residential real property, residential rental property, and quali-
fied improvement property held by an electing real property 
trade or business (as defined in 163(j)(7)(B)).’’. 
(B) QUALIFIED
IMPROVEMENT
PROPERTY.—The table 
contained in subparagraph (B) of section 168(g)(3) is 
amended— 
(i) by inserting after the item relating to subpara-
graph (D)(ii) the following new item: 
‘‘(D)(v) ........................................................................................................
20’’ 
, and 
(ii) by striking the item relating to subparagraph 
(E)(iv) and all that follows through the item relating 
to subparagraph (E)(ix) and inserting the following: 
‘‘(E)(iv) .......................................................................................................
(E)(v) ..........................................................................................................
(E)(vi) .........................................................................................................
35’’. 
(C) APPLICABLE
RECOVERY
PERIOD
FOR
RESIDENTIAL 
RENTAL PROPERTY.—The table contained in subparagraph 
(C) of section 168(g)(2) is amended by striking clauses 
(iii) and (iv) and inserting the following: 
‘‘(iii) Residential rental property ............................................................. 30 years
(iv) Nonresidential real property ............................................................. 40 years
(v) Any railroad grading or tunnel bore or water utility property ....... 50 years’’. 
(4) CONFORMING AMENDMENTS.— 
(A) Clause (i) of section 168(k)(2)(A) is amended— 
(i) in subclause (II), by inserting ‘‘or’’ after the 
comma, 
(ii) in subclause (III), by striking ‘‘or’’ at the end, 
and 
(iii) by striking subclause (IV). 
(B) Section 168 is amended— 
(i) in subsection (e), as amended by paragraph 
(1)(B), by adding at the end the following: 
‘‘(6) QUALIFIED IMPROVEMENT PROPERTY.—