I 
116TH CONGRESS 
1ST SESSION H. R. 1431 
To amend the Internal Revenue Code of 1986 to modify the earned income 
tax credit to account for the amount by which economic growth has 
outpaced income growth, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 28, 2019 
Mr. KHANNA (for himself, Mrs. WATSON COLEMAN, Ms. NORTON, Ms. SCHA-
KOWSKY, Mr. POCAN, Ms. ROYBAL-ALLARD, Ms. JAYAPAL, Mr. COHEN, 
Mr. NADLER, Mr. WELCH, Ms. CLARKE of New York, Mr. SERRANO, Mr. 
CICILLINE, Ms. TLAIB, Mr. RYAN, Mrs. DINGELL, Mr. GRIJALVA, Ms. 
LEE of California, Mr. HASTINGS, Mr. GONZALEZ of Texas, Mr. 
ESPAILLAT, Mr. LEVIN of Michigan, Mr. EVANS, Ms. PRESSLEY, and Mr. 
SCOTT of Virginia) introduced the following bill; which was referred to 
the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to modify 
the earned income tax credit to account for the amount 
by which economic growth has outpaced income growth, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Cost-of-Living Refund 
Act of 2019’’. 
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SEC. 2. MODIFICATION OF EARNED INCOME TAX CREDIT. 
(a) IN GENERAL.— 
(1) INCREASE IN CREDIT PERCENTAGE.—The 
table in section 32(b)(1) of the Internal Revenue 
Code of 1986 is amended— 
(A) by striking ‘‘7.65’’ in the second col-
umn (relating to credit percentage) and insert-
ing ‘‘30’’; 
(B) by striking ‘‘7.65’’ in the third column 
(relating to phaseout percentage) and inserting 
‘‘15.98’’; 
(C) 
by 
striking 
‘‘34’’ 
and 
inserting 
‘‘65.28’’; 
(D) by striking ‘‘40’’ and inserting 
‘‘76.80’’; and 
(E) by striking ‘‘45’’ and inserting 
‘‘86.40’’. 
(2) EARNED INCOME AMOUNT AND PHASEOUT 
AMOUNT.— 
(A) IN
GENERAL.—Subparagraph (A) of 
section 32(b)(2) of such Code is amended by 
striking ‘‘Subject to subparagraph (B), the 
earned income amount and the phaseout 
amount’’ and inserting ‘‘Subject to subpara-
graph (B)— 
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‘‘(i) PHASEOUT AMOUNT.—The phase-
out amount is $18,340. 
‘‘(ii) EARNED INCOME AMOUNT.—The 
earned income amount’’. 
(B) CREDIT
PHASE-IN
ENDS.—Section 
32(b)(2)(A)(ii) of such Code, as amended by 
subparagraph (A), is further amended by strik-
ing the table and inserting the following: 
‘‘In the case of an 
The earned income 
eligible individual with: 
amount is: 
1 qualifying child ......................................................................... $10,000
2 or more qualifying children ...................................................... $14,040
No qualifying children ................................................................. $10,000.’’. 
(b) ELIGIBILITY AGE.—Subclause (II) of section 
32(c)(1)(A)(ii) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘25’’ and inserting ‘‘21’’. 
(c) CONFORMING AND TECHNICAL AMENDMENT.— 
Paragraph (1) of section 32(j) of the Internal Revenue 
Code of 1986 is amended to read as follows: 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after 2019, each of the dollar 
amounts in subsections (b)(2) and (i)(1) shall be in-
creased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
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mined by substituting in subparagraph (A)(ii) 
thereof— 
‘‘(i) in the case of amounts in sub-
section (b)(2)(A), by substituting ‘calendar 
year 2018’ for ‘calendar year 2016’, and 
‘‘(ii) in the case of amounts in sub-
section (i)(1), by substituting ‘calendar 
year 1995’ for ‘calendar year 2016’.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2018. 
SEC. 3. EXPANSION OF EARNED INCOME TAX CREDIT. 
(a) INCLUSION OF INDIVIDUALS WITH QUALIFYING 
DEPENDENTS.— 
(1) IN GENERAL.—Section 32(c)(1) of the In-
ternal Revenue Code of 1986 is amended— 
(A) in subparagraph (A), by striking 
‘‘qualifying child’’ each place such term appears 
and inserting ‘‘qualifying dependent’’, and 
(B) by striking subparagraphs (B) and (F) 
and by redesignating subparagraphs (C), (D), 
and (E) as subparagraphs (B), (C), and (D), 
respectively. 
(2) QUALIFYING DEPENDENT DEFINED.—Sec-
tion 32(c) of such Code is amended by redesignating 
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paragraphs (3) and (4) as paragraphs (4) and (5), 
respectively, and by inserting after paragraph (2) 
the following: 
‘‘(3) QUALIFYING DEPENDENT.— 
‘‘(A) IN GENERAL.—The term ‘qualifying 
dependent’ means, with respect to a taxable 
year— 
‘‘(i) a qualifying child, 
‘‘(ii) a dependent for whom a deduc-
tion is allowable under section 151 who— 
‘‘(I) has attained the age of 65 
before the close of the taxable year, or 
‘‘(II) is an individual described in 
section 21(b)(1)(B), or 
‘‘(iii) an individual described in sec-
tion 21(b)(1)(C). 
‘‘(B) IDENTIFICATION
REQUIREMENTS.— 
No credit shall be allowed under this section 
with respect to a qualifying dependent unless 
the taxpayer includes the name, age, and TIN 
of the individual on the return of tax for the 
taxable year. 
‘‘(C) PLACE OF ABODE.—The term ‘quali-
fying dependent’ shall not include an individual 
unless such individual has a principal place of 
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abode in the United States for more than one- 
half of such taxable year.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) The tables in paragraphs (1) and (2) 
of section 32(b) of such Code are each amend-
ed— 
(i) by striking ‘‘qualifying child’’ each 
place it appears and inserting ‘‘qualifying 
dependent’’, and 
(ii) by striking ‘‘qualifying children’’ 
each place it appears and inserting ‘‘quali-
fying dependents’’. 
(B) Section 32(c)(4) of such Code, as re-
designated by this Act, is amended by striking 
subparagraphs (C) and (D). 
(C) Section 32(m) of such Code is amend-
ed by striking ‘‘subsections (c)(1)(E) and 
(c)(3)(D)’’ and inserting ‘‘subsections (c)(1)(D) 
and (c)(3)(B)’’. 
(b) INCLUSION OF QUALIFYING STUDENTS.— 
(1) IN GENERAL.—Section 32(c)(1)(A) of such 
Code is amended by striking ‘‘or’’ at the end of 
clause (i), by striking the period at the end of clause 
(ii)(III) and inserting ‘‘, or’’, and by inserting after 
clause (ii)(III) the following new clause: 
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‘‘(iii) any individual who is a quali-
fying student.’’. 
(2) QUALIFYING STUDENT DEFINED.—Section 
32(c)(1) of such Code, as amended by subsection 
(a), is further amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(E) QUALIFYING STUDENT.— 
‘‘(i) IN GENERAL.—The term ‘quali-
fying student’ means, with respect to a 
taxable year, an individual who is an eligi-
ble 
student 
(as 
defined 
in 
section 
25A(b)(3)) with respect to an institution of 
higher education (as defined in section 101 
of the Higher Education Act of 1965) 
who— 
‘‘(I)(aa) has qualified for a Fed-
eral Pell Grant with respect to the 
academic year beginning in such tax-
able year, or 
‘‘(bb) whose modified adjusted 
gross income (as defined in section 
24(b)(1)) is less than 250 percent of 
the poverty line (defined in section 
529A(b)(7)(B)) as for the size of the 
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family involved for the taxable year, 
and 
‘‘(II) is not a dependent for 
whom a deduction is allowable under 
section 151 to another taxpayer for 
any taxable year beginning in the 
same calendar year as such taxable 
year. 
‘‘(ii) FAMILY SIZE.—For purposes of 
this subparagraph, in determining the pov-
erty line applicable to the taxpayer, the 
family size with respect to such taxpayer 
shall be equal to the number of individuals 
for whom such taxpayer is allowed a de-
duction under section 151 for the taxable 
year.’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
32(c)(1)(A)(ii) of such Code is amended by inserting 
‘‘(other than a qualifying student)’’ after ‘‘any other 
individual’’. 
(c) MINIMUM CREDIT FOR STUDENTS AND FOR INDI-
VIDUALS WITH CERTAIN QUALIFYING DEPENDENTS.— 
Section 32(a) of such Code is amended by adding at the 
end the following new paragraph: 
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‘‘(3) MINIMUM
CREDIT
FOR
STUDENTS
AND 
FOR INDIVIDUALS WITH CERTAIN QUALIFYING DE-
PENDENTS.— 
‘‘(A) IN GENERAL.—In the case of an eligi-
ble individual who is a qualifying student or 
who has a specified dependent for the taxable 
year, the amount determined under paragraph 
(1) (before the application of paragraph (2)) 
and the amount determined under paragraph 
(2)(A) shall not be less than $1,200. 
‘‘(B) SPECIFIED
DEPENDENT.—For pur-
poses of this paragraph, the term ‘specified de-
pendent’ means any qualifying dependent (other 
than a qualifying child who has attained the 
age of 7 before the close of the taxable year).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 4. ADVANCE PAYMENT OF EARNED INCOME CREDIT. 
(a) IN GENERAL.—Chapter 25 of subtitle C of the 
Internal Revenue Code of 1986 is amended by inserting 
after section 3506 the following new section: 
‘‘SEC. 3507. ADVANCE PAYMENT OF EARNED INCOME CRED-
IT. 
‘‘(a) ADVANCE PAYMENT.— 
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‘‘(1) IN GENERAL.—An employer making pay-
ment of wages to an employee with respect to whom 
an eligibility certificate is in effect shall, at the time 
of paying such wages for the payroll period elected 
by the employee under paragraph (2), make an addi-
tional lump sum payment to such employee equal to 
the earned income advance amount (except as pro-
vided in subsection (b)(1)(C)(ii)) of such employee. 
‘‘(2) PAYMENTS AVAILABLE AFTER 6 MONTHS 
OF
EMPLOYMENT
DURING
CALENDAR
YEAR.—For 
purposes of paragraph (1), an employee with respect 
to whom an eligibility certificate is in effect for the 
calendar year may elect to receive the earned income 
advance amount at the same time as wages for any 
payroll period which begins after the employee has 
been paid wages by the employer for a period of not 
less than 6 months during such calendar year. 
‘‘(b) ELIGIBILITY CERTIFICATE.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, an eligibility certificate is a statement sub-
mitted by an employee to the employer which— 
‘‘(A) certifies that the employee is eligible 
to receive the credit provided by section 32 for 
the taxable year, 
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‘‘(B) certifies that the employee does not 
have an eligibility certificate in effect for the 
calendar year with respect to the payment of 
wages by another employer, and 
‘‘(C) certifies that— 
‘‘(i) an eligibility certificate has not 
been in effect for the spouse of the em-
ployee on any date during the calendar 
year, or 
‘‘(ii) such a certificate is in effect for 
the spouse of the employee, and the em-
ployee is eligible to receive only 1⁄2 the 
earned income advance amount otherwise 
determined with respect to the employee. 
‘‘(2) 
EMPLOYER
NOT
RESPONSIBLE
FOR 
VERIFICATION.—For purposes of this section, an 
employer shall not— 
‘‘(A) be required to verify any certification 
made by an employee in the statement de-
scribed in paragraph (1), or 
‘‘(B) be held liable for any false claims or 
statements made by an employee in regards to 
such statement. 
‘‘(c) EARNED INCOME ADVANCE AMOUNT.— 
‘‘(1) DETERMINATION OF AMOUNT.— 
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‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘earned income advance 
amount’ means, with respect to any payroll pe-
riod, the amount of the credit provided under 
section 32 as determined— 
‘‘(i) on the basis of the wages of the 
employee from the employer during such 
calendar year through such payroll period, 
and 
‘‘(ii) in accordance with tables issued 
by the Secretary. 
‘‘(B) LIMITATION.—For each calendar 
year, except as provided in subparagraph (C), 
the earned income advance amount shall not ex-
ceed $500. 
‘‘(C) ADJUSTMENT FOR INFLATION.— 
‘‘(i) IN GENERAL.—In the case of any 
taxable year beginning after 2021, the 
$500 amount in subparagraph (B) shall be 
increased by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for the calendar year in which the tax-
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able year begins determined by sub-
stituting ‘calendar year 2020’ for ‘cal-
endar year 2016’ in subparagraph 
(A)(ii) thereof. 
‘‘(ii) ROUNDING.—If any increase de-
termined under paragraph (1) is not a 
multiple of $10, such increase shall be 
rounded to the nearest multiple of $10. 
‘‘(2) ARMED FORCES.—In the case of an em-
ployee who is a member of the Armed Forces of the 
United States, the earned income advance amount 
shall be determined by taking into account the total 
wages of such employee, as determined for purposes 
of section 32. 
‘‘(3) ADVANCE
AMOUNT
TABLES.—For pur-
poses of paragraph (1)(A)(ii), the tables issued by 
the Secretary shall be similar in form to the tables 
issued under section 3402 and, to the extent fea-
sible, coordinated with such tables. 
‘‘(d) PAYMENTS TO BE TREATED AS PAYMENTS OF 
WITHHOLDING AND FICA TAXES.— 
‘‘(1) IN GENERAL.—Payments made by an em-
ployer under subsection (a) to an employee— 
‘‘(A) shall not be treated as payment of 
compensation, and 
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‘‘(B) shall be treated as made out of— 
‘‘(i) amounts required to be deducted 
and withheld for the payroll period under 
section 3401, 
‘‘(ii) amounts required to be deducted 
for the payroll period under section 3102, 
and 
‘‘(iii) amounts of the taxes imposed 
for the payroll period under section 3111, 
as if the employer had paid to the Secretary, on 
the day on which the wages are paid to the em-
ployee, an amount equal to such payments. 
‘‘(2) ADVANCE
PAYMENTS
EXCEED
TAXES 
DUE.—In the case of any employer, if for any pay-
roll period the aggregate amount of earned income 
advance payments exceeds the sum of the amounts 
referred to in paragraph (1)(B), the employer shall 
pay only so much of such earned income advance 
payment as does not exceed such sum, and shall not 
make any further advance payments to the employee 
for the calendar year. 
‘‘(3) 
FAILURE
TO
MAKE
ADVANCE
PAY-
MENTS.—Failure to make any payment of an earned 
income advance amount as required under this sec-
tion shall be treated as the failure at such time to 
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