I 
117TH CONGRESS 
1ST SESSION 
H. R. 174 
To amend the Internal Revenue Code of 1986 to extend the earned income 
tax credit to all taxpayers with dependents and to qualifying students, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 4, 2021 
Mrs. WATSON COLEMAN (for herself and Ms. MOORE of Wisconsin) 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 extend 
the earned income tax credit to all taxpayers with de-
pendents and to qualifying students, and for other pur-
poses. 
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 ‘‘EITC Modernization 
Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
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(1) The Federal earned income tax credit is a 
refundable tax credit for lower- and middle-income 
working individuals and families whose earnings are 
below an income threshold. 
(2) Since its establishment in 1975, the credit 
has increased family income, reduced child poverty, 
and promoted employment by supplementing the 
earnings of low-wage workers, including military 
families. 
(3) The credit has a positive impact on the edu-
cation and health of children living in poverty. 
(4) The credit has a positive economic impact 
on local economies and businesses because it puts 
more money in the hands of low- and middle-income 
working people who spend the money on immediate 
needs, such as groceries, school supplies, car repairs, 
rent, and health care. 
(5) The widening gap between the incomes of 
the wealthiest Americans and those of middle- and 
lower-income Americans is alarming. 
(6) There is an urgent need to address that 
gap, including through measures like this legislation 
and by raising the Federal minimum wage which to-
gether increase the wages of working Americans, 
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widen the path to income stability, and narrow in-
come inequality. 
SEC. 3. MODIFICATIONS OF THE 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 
paragraphs (3) and (4) as paragraphs (5) and (6), 
and by inserting after paragraph (2) the following 
new paragraphs: 
‘‘(3) QUALIFYING DEPENDENT.— 
‘‘(A) IN GENERAL.—The term ‘qualifying 
dependent’ means, with respect to a taxable 
year— 
‘‘(i) a qualifying child, 
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‘‘(ii) an aged dependent, or 
‘‘(iii) a qualifying individual described 
in subparagraph (B) or (C) of section 
21(b)(1). 
‘‘(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 
abode in the United States for more than one- 
half of such taxable year. 
‘‘(4) AGED DEPENDENT.—The term ‘aged de-
pendent’ means a dependent for whom a deduction 
is allowable under section 151 who has attained the 
age of 65 before the close of the taxable year.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) The tables in paragraphs (1) and (2) 
of section 32(b) of such Code are each amend-
ed— 
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(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)(5) 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 ‘‘(c)(3)(D)’’ and inserting 
‘‘(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: 
‘‘(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: 
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‘‘(E) QUALIFYING
STUDENT.—The term 
‘qualifying student’ means, with respect to a 
taxable year, an individual who is an eligible 
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) is not a dependent for whom a 
deduction is allowable under section 151 to 
another taxpayer for any taxable year be-
ginning in the same calendar year as such 
taxable year, and 
‘‘(ii) either— 
‘‘(I) is qualified for a Federal 
Pell Grant with respect to the aca-
demic year beginning in such taxable 
year, or 
‘‘(II) has modified adjusted gross 
income of less than 250 percent of the 
poverty line for the size of the family 
involved for the taxable year. 
‘‘(F) DEFINITIONS.—For purposes of this 
subparagraph: 
‘‘(i) MODIFIED ADJUSTED GROSS IN-
COME.—The term ‘modified adjusted gross 
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income’ means the adjusted gross income 
of the taxpayer for the taxable year in-
creased by any amount excluded from 
gross income under section 911, 931, or 
933. 
‘‘(ii) POVERTY LINE.— 
‘‘(I) IN
GENERAL.—The term 
‘poverty line’ has the meaning given 
such term in section 673(2) of the 
Community Services Block Grant Act 
(42 U.S.C. 9902(2)), including any 
revision required by such section. 
‘‘(II) FAMILY
SIZE.—For pur-
poses of determining the poverty line 
applicable to the taxpayer, the family 
size with respect to any taxpayer shall 
be equal to the number of individuals 
for whom the taxpayer is allowed a 
deduction under section 151 (relating 
to allowance of deduction for personal 
exemptions) 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’’. 
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(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: 
‘‘(3) MINIMUM
CREDIT
FOR
STUDENTS
AND 
FOR INDIVIDUALS WITH CERTAIN QUALIFYING DE-
PENDENTS.— 
‘‘(A) IN GENERAL.—In the case of a quali-
fying student, or an eligible individual who has 
a specified dependent for the taxable year, the 
amount determined under paragraph (1) (be-
fore 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) MONTHLY PAYMENT.—Section 32 of such Code, 
as amended by this Act, is further amended by adding 
at the end the following new subsection: 
‘‘(n) MONTHLY PAYMENT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
who is entitled to a refund relating to an overpay-
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ment of tax imposed by this subtitle that exceeds 
$240 (but only to the extent such refund does not 
exceed the credit allowed under this section) such in-
dividual may elect to have the Secretary, in lieu of 
such refund, make a payment equal to— 
‘‘(A) 2⁄13 of such refund (with interest) 
during the earlier of the first practicable month 
or the second month that begins after the date 
the return was filed, and 
‘‘(B) 1⁄13 of such refund (with interest) 
during each of the 11 months subsequent to the 
month determined under subparagraph (A). 
‘‘(2) METHOD OF PAYMENT.—A payment made 
under this subsection shall be made by direct deposit 
or by general-use prepaid card, or by such other 
method (other than by check) as the Secretary may 
prescribe and the taxpayer may elect. 
‘‘(3) ONE-TIME INCREASE.—The first time an 
individual receives a payment under this subsection, 
paragraph (1)(A) shall be applied by substituting 
‘4⁄13’ for ‘2⁄13’.’’. 
(e) SPECIAL RULE
FOR NEW LOW-INCOME PAR-
ENTS.—Section 32 of such Code, as amended by this Act, 
is further amended by adding at the end the following new 
subsection: 
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