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‘‘(6) EXCHANGE COMPLIANCE WITH FILING RE-
QUIREMENTS.—The term ‘coverage month’ shall not 
include, with respect to any individual covered by a 
qualified health plan enrolled in through an Ex-
change, any month for which the Exchange does not 
meet the requirements of section 155.305(f)(4) of 
title 45, Code of Federal Regulations (as published 
in the Federal Register on March 19, 2025 (90 FR 
12942)), with respect to the individual.’’. 
(b) PRE-ENROLLMENT VERIFICATION PROCESS RE-
QUIRED.—Section 36B(c)(3)(A) is amended—
(1) by striking ‘‘HEALTH
PLAN.—The term’’ 
and inserting the following: ‘‘HEALTH PLAN.— 
‘‘(i) IN GENERAL.—The term’’, and 
(2) by adding at the end the following new 
clause: 
‘‘(ii) PRE-ENROLLMENT VERIFICATION 
PROCESS REQUIRED.—Such term shall not 
include any plan enrolled in through an 
Exchange, unless such Exchange provides 
a process for pre-enrollment verification 
through which any applicant may, begin-
ning not later than August 1, verify with 
the Exchange the applicant’s eligibility for 
enrollment in such plan for plan years be-
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ginning in the subsequent year, for any ad-
vance payment of the credit allowed under 
this section, and for reduced cost-sharing 
under section 1402 of the Patient Protec-
tion and Affordable Care Act.’’. 
(c) REGULATIONS.—The Secretary of the Treasury 
and the Secretary of Health and Human Services may 
each prescribe such rules and other guidance as may be 
necessary or appropriate to carry out the amendments 
made by this section. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2027. 
SEC. 112202. DISALLOWING PREMIUM TAX CREDIT IN CASE 
OF CERTAIN COVERAGE ENROLLED IN DUR-
ING SPECIAL ENROLLMENT PERIOD. 
(a) IN GENERAL.—Section 36B(c)(3)(A), as amend-
ed by the preceding provisions of this Act, is amended by 
adding at the end the following new clause: 
‘‘(iii) EXCEPTION
IN
CASE
OF
CER-
TAIN
SPECIAL
ENROLLMENT
PERIODS.—
Such term shall not include any plan en-
rolled in during a special enrollment period 
provided for by an Exchange—
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‘‘(I) on the basis of the relation-
ship of the individual’s expected 
household income to such a percent-
age of the poverty line (or such other 
amount) as is prescribed by the Sec-
retary of Health and Human Services 
for purposes of such period, and 
‘‘(II) not in connection with the 
occurrence of an event or change in 
circumstances specified by the Sec-
retary of Health and Human Services 
for such purposes.’’. 
(b) REGULATIONS.—The Secretary of Treasury and 
the Secretary of Health and Human Services shall pre-
scribe such rules (including interim final and temporary 
regulations) and other guidance as may be necessary to 
carry out the purposes of the amendments made by this 
section. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plans enrolled in 
during calendar months beginning after the third calendar 
month ending after the date of the enactment of this Act.
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SEC. 112203. ELIMINATING LIMITATION ON RECAPTURE OF 
ADVANCE PAYMENT OF PREMIUM TAX CRED-
IT. 
(a) IN GENERAL.—Section 36B(f)(2) is amended by 
striking subparagraph (B). 
(b) CONFORMING AMENDMENTS.—
(1) Section 36B(f)(2) is amended by striking 
‘‘ADVANCE
PAYMENTS.—’’ and all that follows 
through ‘‘If the advance payments’’ and inserting 
the following: ‘‘ADVANCE
PAYMENTS.—If the ad-
vance payments’’. 
(2) Section 35(g)(12)(B)(ii) is amended by 
striking ‘‘then section 36B(f)(2)(B) shall be applied 
by substituting the amount determined under clause 
(i) for the amount determined under section 
36B(f)(2)(A)’’ and inserting ‘‘then the amount de-
termined under clause (i) shall be substituted for the 
amount determined under section 36B(f)(2)’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2025.
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SEC. 112204. IMPLEMENTING ARTIFICIAL INTELLIGENCE 
TOOLS FOR PURPOSES OF REDUCING AND 
RECOUPING IMPROPER PAYMENTS UNDER 
MEDICARE. 
(a) IN GENERAL.—Part E of title XVIII of the Social 
Security Act (42 U.S.C. 1395x et seq.), as amended by 
the preceding provisions of this Act, is amended by adding 
at the end the following new section: 
‘‘SEC. 1899D. IMPLEMENTING ARTIFICIAL INTELLIGENCE 
TOOLS FOR PURPOSES OF REDUCING AND 
RECOUPING IMPROPER PAYMENTS. 
‘‘(a) IN GENERAL.—Not later than January 1, 2027, 
the Secretary shall implement such artificial intelligence 
tools determined appropriate by the Secretary for pur-
poses of—
‘‘(1) reducing improper payments made under 
parts A and B; and 
‘‘(2) identifying any such improper payments so 
made. 
‘‘(b) CONTRACTS.—The Secretary shall seek to con-
tract with a vendor of artificial intelligence tools and with 
data scientists for purposes of implementing the artificial 
intelligence tools required under subsection (a). 
‘‘(c) RECOUPMENT.—The Secretary shall, to the ex-
tent practicable, recoup payments identified using the arti-
ficial intelligence tools implemented under subsection (a).
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‘‘(d) REPORT.—Not later than January 1, 2029, and 
not less frequently than annually thereafter, the Secretary 
shall report to Congress on the implementation of artificial 
intelligence tools under subsection (a) and the recoupment 
of improper payments under subsection (c). Such report 
shall include—
‘‘(1) a description of any opportunities for fur-
ther reducing rates of improper payments described 
in subsection (a)(1) or further increasing rates of 
recoupment of such payments; 
‘‘(2) the total dollar amount of improper pay-
ments recouped in the most recent year for which 
data is available; and 
‘‘(3) in the case that the Secretary fails to re-
duce the rate of improper payments by 50 percent 
in such most recent year as compared to the year 
prior to such most recent year, a description of the 
reasons for such failure.’’. 
(b) IMPLEMENTATION FUNDING.—
(1) FEDERAL
HOSPITAL
INSURANCE
TRUST 
FUND.—The Secretary of Health and Human Serv-
ices shall provide for the transfer from the Federal 
Hospital Insurance Trust Fund established under 
section 1817 of the Social Security Act (42 U.S.C. 
1395i) to the Centers for Medicare & Medicaid Serv-
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ices Program Management Account of $12,500,000 
for fiscal year 2025 for purposes of carrying out the 
amendment made by this section, to remain available 
until expended. 
(2) FEDERAL
SUPPLEMENTARY
MEDICAL
IN-
SURANCE TRUST FUND.—The Secretary of Health 
and Human Services shall provide for the transfer, 
from the Federal Supplementary Medical Insurance 
Trust Fund established under section 1841 of the 
Social Security Act (42 U.S.C. 1395t) to the Cen-
ters for Medicare & Medicaid Services Program 
Management Account of $12,500,000 for fiscal year 
2025 for purposes of carrying out the amendment 
made by this section, to remain available until ex-
pended. 
SEC. 112205. EARNED INCOME TAX CREDIT REFORMS. 
(a) EARNED INCOME TAX CREDIT CERTIFICATION 
PROGRAM.—
(1) ESTABLISHMENT OF PROGRAM.—
(A) IN GENERAL.—Chapter 77 is amended 
by adding at the end the following new section: 
‘‘SEC. 7531. EARNED INCOME TAX CREDIT CERTIFICATION 
PROGRAM. 
‘‘(a) IN GENERAL.—To avoid duplicative and other 
erroneous claims under section 32 with respect to a child
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of the taxpayer, for taxable years beginning after Decem-
ber 31, 2027, the Secretary shall establish a program 
under which, on the taxpayer’s application with respect 
to the child, the Secretary shall issue an EITC certificate 
for purposes of section 32 establishing such child’s status 
as a qualifying child only of the taxpayer for a taxable 
year. 
‘‘(b) APPLICATION REQUIREMENTS.—
‘‘(1) IN
GENERAL.—The Secretary shall not 
issue to a taxpayer an EITC certificate with respect 
to a child for a taxable year unless the taxpayer ap-
plies under the program with respect to the child 
and provides such information and supporting docu-
mentation as the Secretary shall by regulation pre-
scribe as necessary to establish such child as a quali-
fying child only of the taxpayer for the taxable year. 
‘‘(2) TIME AND MANNER OF APPLICATION.—
Such application shall be made, and such informa-
tion and supporting documentation shall be pro-
vided—
‘‘(A) in such manner as may be provided 
by the Secretary for purposes of this section 
(including establishing an on-line portal), and
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‘‘(B) not later than the due date for the 
return of tax for the taxable year or (if later) 
when the return is filed. 
‘‘(3) COMPETING CLAIMS.—In the case of more 
than 1 taxpayer making an application with respect 
to a child under the program for a taxable year be-
ginning during a calendar year, the Secretary shall 
not issue an EITC certificate to any such taxpayer 
with respect to such child for such a taxable year 
unless the Secretary can establish such child, based 
on information and supporting documentation pro-
vided under paragraph (1), as the qualifying child 
only of one such taxpayer for such a taxable year. 
‘‘(c) TREATMENT
OF CREDIT WITHOUT CERTIFI-
CATION UNDER PROGRAM.—For taxable years beginning 
after December 31, 2027—
‘‘(1) IN GENERAL.—In the case of a taxpayer 
who takes into account as a qualifying child under 
section 32 a child for whom an EITC certificate has 
not been issued for the taxable year to the tax-
payer—
‘‘(A) the Secretary shall not credit the por-
tion of any overpayment for such taxable year 
that is attributable to the taxpayer taking into 
account such child as a qualifying child, unless
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the taxpayer obtains, not later than the due 
date for the return for the taxable year, an 
EITC certificate with respect to such child for 
such taxable year, and 
‘‘(B) if the taxpayer fails to so obtain an 
EITC certificate, such failure shall be treated—
‘‘(i) as an omission of information re-
quired by section 32 with respect to such 
child, and 
‘‘(ii) as arising out of a mathematical 
or clerical error and assessed according to 
section 6213(b)(1). 
‘‘(2) TERMINATION OF CERTIFICATION.—In the 
case of a taxpayer who for a taxable year takes into 
account as a qualifying child under section 32 a 
child for whom an EITC certificate is terminated for 
such taxable year, such termination shall be treated 
in the same manner as a failure to obtain an EITC 
certificate under paragraph (1)(B). 
‘‘(d) TRANSITION RULES FOR TAXABLE YEARS BE-
GINNING BEFORE 2028.—
‘‘(1) IN GENERAL.—If for any taxable year be-
ginning after December 31, 2023, and before Janu-
ary 1, 2027, more than 1 taxpayer makes a claim 
for credit under section 32 taking into account the
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same child as a qualifying child, then the Secretary 
shall send notice to each such taxpayer (by certified 
or registered mail to the last known address of the 
taxpayer) detailing the resultant treatment of such 
taxpayers under paragraph (2) with respect to such 
child for any subsequent taxable years beginning be-
fore 2028. 
‘‘(2) SUBSEQUENT TAXABLE YEARS BEGINNING 
BEFORE 2028.—In the case of a child with respect 
to whom paragraph (1) applied by reason of claims 
for credit for a taxable year, for any subsequent tax-
able years beginning before January 1, 2028—
‘‘(A) subject to subparagraph (B), the Sec-
retary shall not credit the portion of any over-
payment for the taxable year that is attrib-
utable to a taxpayer taking into account such 
child as a qualifying child under section 32 
until the 15th day of October following the end 
of the taxable year, and 
‘‘(B) if more than one taxpayer makes a 
claim for such credit for the taxable year taking 
into account such child as a qualifying child, so 
taking such child into account shall be treat-
ed—
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‘‘(i) as an omission of information re-
quired by section 32 with respect to such 
child, and 
‘‘(ii) as arising out of a mathematical 
or clerical error and assessed according to 
section 6213(b)(1). 
‘‘(e) QUALIFYING CHILD.—For purposes of this sec-
tion, the term ‘qualifying child’ has the meaning given 
such term under section 32(c)(3). 
‘‘(f) REBUTTAL OF TREATMENT.—Treatment under 
subsection (c) or (d)(2)(B) as having omitted information 
required by section 32 may be rebutted by providing such 
information and supporting documentation as satisfac-
torily demonstrates the child is a qualifying child of the 
taxpayer for the taxable year. 
‘‘(g) RESTRICTIONS ON TAXPAYERS WHO IMPROP-
ERLY USE PROGRAM.—
‘‘(1) IN
GENERAL.—A taxpayer shall not be 
permitted to apply for an EITC certificate under the 
program for any taxable year in the disallowance pe-
riod. 
‘‘(2) DISALLOWANCE PERIOD.—For purposes of 
paragraph (1), the disallowance period is—
‘‘(A) the period of 10 taxable years after 
the most recent taxable year for which there
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was a penalty imposed under 6720D on the tax-
payer (but only if such penalty has been im-
posed on such taxpayer more than once, at least 
one instance of which was due to fraud under 
section 6720D(b)), 
‘‘(B) the period of 2 taxable years after 
the most recent taxable year for which there 
was a penalty imposed under 6720D on the tax-
payer (but only if such penalty has been im-
posed on such taxpayer more than once due to 
reckless or intentional disregard of rules and 
regulations (but not imposed due to fraud)), 
and 
‘‘(C) any disallowance period with respect 
to the taxpayer under section 32(k)(1). 
‘‘(h) REGULATIONS.—The Secretary shall prescribe 
such rules as may be necessary or appropriate to carry 
out the program and purposes of this section, including—
‘‘(1) a process for establishing alternating tax-
able year treatment of a child as a qualifying child 
under a custodial arrangement, 
‘‘(2) notwithstanding subsection (d)(2), a proc-
ess for—
‘‘(A) establishing the status of a child as 
a qualifying child of the taxpayer under section
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32 for taxable years to which such subsection 
applies, and 
‘‘(B) allowing credit or refunds attrib-
utable to such status, 
‘‘(3) a simplified process for re-certifying a 
child as a qualifying child only of the taxpayer for 
a taxable year, and 
‘‘(4) a process for terminating EITC certifi-
cates in the case of competing claims with respect to 
a child or in cases in which issuance of the certifi-
cate is determined by the Secretary to be erro-
neous.’’. 
(B) CONFORMING
AMENDMENT.—Section 
32 amended by adding at the end the following 
new subsection: 
‘‘(o) EITC CERTIFICATE WITH RESPECT TO QUALI-
FYING CHILDREN.—For rules relating to EITC certifi-
cates with respect to qualifying children and duplicate 
claims for the credit allowed under this section, see section 
7531.’’. 
(C) CLERICAL AMENDMENT.—The table of 
sections for chapter 77 is amended by adding at 
the end the following new item:
‘‘Sec. 7531. Earned income tax credit certification program.’’.
(2) PENALTIES FOR IMPROPER USE OF EITC 
CERTIFICATE PROGRAM.—
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(A) IN GENERAL.—Part I of subchapter B 
of chapter 68 is amended by adding at the end 
the following new section: 
‘‘SEC. 6720D. PENALTIES WITH RESPECT TO EITC CERTIFI-
CATE PROGRAM. 
‘‘(a) RECKLESS OR INTENTIONAL DISREGARD.—If—
‘‘(1) any person makes a material misstatement 
or inaccurate representation in an application under 
section 7531 for an EITC certificate, and 
‘‘(2) such misstatement or representation was 
due to reckless or intentional disregard of rules and 
regulations (but not due to fraud), 
such person shall pay a penalty of $100 for each EITC 
certificate with respect to which such misstatement or rep-
resentation was made. 
‘‘(b) FRAUD.—If a misstatement or representation 
described in subsection (a)(1) is due to fraud on the part 
of the person making such misstatement or representa-
tion, in addition to any criminal penalty, such person shall 
pay a penalty of $500 for each EITC certificate with re-
spect to which such a misstatement or representation was 
made.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for part I of subchapter B of chapter
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68 is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 6720D. Penalties with respect to EITC certificate program.’’.
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after December 31, 2024. 
(b) TASK FORCE
TO DESIGN
A PRIVATE DATA 
BOUNCING SYSTEM FOR IMPROVEMENTS TO THE EARNED 
INCOME TAX CREDIT.—Out of any money in the Treasury 
not otherwise appropriated, there is hereby appropriated 
$10,000,000 for the fiscal year ending on September 30, 
2026, for necessary expenses of the Department of the 
Treasury, to establish, within 90 days following the date 
of the enactment of this Act, a task force to provide to 
the Secretary of the Treasury a report on the following 
with respect to the administration of the earned income 
tax credit: 
(1) Recommendations for improvement of the 
integrity of such administration. 
(2) The potential use of third-party payroll and 
consumption datasets to verify income. 
(3) The integration of automated databases to 
allow horizontal verification to reduce improper pay-
ments, fraud, and abuse. 
(c) INCREASED EARNED INCOME TAX CREDIT FOR 
PURPLE HEART RECIPIENTS WHOSE SOCIAL SECURITY
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DISABILITY BENEFITS ARE TERMINATED BY REASON OF 
WORK ACTIVITY.—
(1) IN GENERAL.—Section 32, as amended by 
the preceding provisions of this Act, is amended by 
adding at the end the following new subsection: 
‘‘(p) INCREASE IN CREDIT FOR PURPLE HEART RE-
CIPIENTS WHOSE SOCIAL SECURITY DISABILITY BENE-
FITS ARE TERMINATED BY REASON OF WORK ACTIV-
ITY.—
‘‘(1) IN GENERAL.—In the case of a specified 
Purple Heart recipient, the credit otherwise deter-
mined under subsection (a) for the taxable year shall 
be increased (whether or not such specified Purple 
Heart recipient is an eligible individual) by the sum 
of the SSDI benefit substitution amounts with re-
spect to qualified benefit termination months during 
such taxable year. 
‘‘(2) SPECIFIED PURPLE HEART RECIPIENT.—
For purposes of this subsection, the term ‘specified 
Purple Heart recipient’ means any individual—
‘‘(A) who received the Purple Heart, 
‘‘(B) who received disability insurance ben-
efit payments under section 223(a) of the So-
cial Security Act, and
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such recipient under section 223(a) of the Social Se-
curity Act for the month immediately preceding the 
12-month period described in paragraph (3)(A). 
‘‘(5) CERTAIN EITC LIMITATIONS NOT APPLICA-
BLE.—Subsections (a)(2), (d), (e), (f), and (i) shall 
not apply with respect to the increase under para-
graph (1).’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to taxable years end-
ing after the date of the enactment of this Act. 
(d) SOCIAL SECURITY NUMBER DEFINED.—
(1) IN GENERAL.—Section 32(m) is amended 
by striking ‘‘issued to an individual’’ and all that fol-
lows and inserting ‘‘(as defined section 24(h)(7))’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this section shall apply to taxable years beginning 
after December 31, 2024. 
SEC. 112206. TASK FORCE ON THE TERMINATION OF DI-
RECT FILE. 
(a) TERMINATION OF DIRECT FILE.—As soon as 
practicable, and not later than 30 days after the date of 
the enactment of this Act, the Secretary of the Treasury 
shall ensure that the Internal Revenue Service Direct File 
program has been terminated.
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(b) APPROPRIATION FOR TASK FORCE TO DESIGN A 
BETTER PUBLIC-PRIVATE PARTNERSHIP BETWEEN THE 
IRS AND PRIVATE SECTOR TAX PREPARATION SERVICES 
TO PROVIDE FOR FREE TAX FILING TO REPLACE THE 
EXISTING ‘‘FREE FILE’’ PROGRAM AND ANY ‘‘DIRECT 
EFILE’’ TAX RETURN SYSTEM.—Out of any money in the 
Treasury not otherwise appropriated, there is hereby ap-
propriated for the fiscal year ending September 30, 2026, 
for necessary expenses of the Department of the Treasury 
to deliver to Congress, within 90 days following the date 
of the enactment of this Act, a report on (1) the cost of 
a new public-private partnership to provide for free tax 
filing for up to 70 percent of all taxpayers calculated by 
adjusted gross income to replace free file and any IRS-
run direct file programs; (2) taxpayer opinions and pref-
erences regarding a taxpayer-funded, government-run 
service or a free service provided by the private sector; 
(3) assessment of the feasibility of a new approach, how 
to make the options consistent and simple for taxpayers 
across all participating providers, how to provide features 
to address taxpayer needs; and (4) the cost (including op-
tions for differential coverage based on taxpayer adjusted 
gross income and return complexity) of developing and 
running a free direct efile tax return system, including
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costs to build and administer each release, $15,000,000, 
to remain available until September 30, 2026. 
SEC. 112207. INCREASE IN PENALTIES FOR UNAUTHORIZED 
DISCLOSURES OF TAXPAYER INFORMATION. 
(a) IN GENERAL.—Paragraphs (1), (2), (3), (4), and 
(5) of section 7213(a) are each amended by striking 
‘‘$5,000, or imprisonment of not more than 5 years’’ and 
inserting ‘‘$250,000, or imprisonment of not more than 
10 years’’. 
(b) DISCLOSURES
OF RETURN INFORMATION
OF 
MULTIPLE TAXPAYERS TREATED AS MULTIPLE VIOLA-
TIONS.—Section 7213(a) is amended by adding at the end 
the following new paragraph: 
‘‘(6) DISCLOSURES OF RETURN INFORMATION 
OF MULTIPLE TAXPAYERS TREATED AS MULTIPLE 
VIOLATIONS.—For purposes of this subsection, a 
separate violation occurs with respect to each tax-
payer whose return or return information is dis-
closed in violation of this subsection.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to disclosures made after the date 
of the enactment of this Act.
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SEC. 112208. RESTRICTION ON REGULATION OF CONTIN-
GENCY FEES WITH RESPECT TO TAX RE-
TURNS, ETC. 
The Secretary of the Treasury may not regulate, pro-
hibit, or restrict the use of a contingent fee in connection 
with tax returns, claims for refund, or documents in con-
nection with tax returns or claims for refund prepared on 
behalf of a taxpayer. 
Subtitle D—Increase in Debt Limit 
SEC. 113001. MODIFICATION OF LIMITATION ON THE PUB-
LIC DEBT. 
The limitation under section 3101(b) of title 31, 
United States Code, as most recently increased by section 
401(b) of Public Law 118–5 (31 U.S.C. 3101 note), is 
increased by $4,000,000,000,000. 
Passed the House of Representatives May 22 (legis-
lative day May 21), 2025. 
Attest:
Clerk.
119TH CONGRESS 
1ST SESSION 
H. R. 1
AN ACT 
To provide for reconciliation pursuant to title II of 
H. Con. Res. 14.