In the Senate of the United States, 
December 2 (legislative day, December 1), 2017. 
Resolved, That the bill from the House of Representa-
tives (H.R. 1) entitled ‘‘An Act to provide for reconciliation 
pursuant to titles II and V of the concurrent resolution on 
the budget for fiscal year 2018.’’, do pass with the following 
AMENDMENT: 
Strike all after the first word and insert the fol-
lowing: 
TITLE 
TITLE I 
SEC. 11000. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This title may be cited as the 
‘‘Tax Cuts and Jobs Act’’. 
(b) 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 re-
peal of, a section or other provision, the reference shall be
† HR 1 EAS 
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 Janu-
ary 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 (7). 
‘‘(2) RATE TABLES.— 
‘‘(A) MARRIED INDIVIDUALS FILING JOINT 
RETURNS
AND
SURVIVING
SPOUSES.—The fol-
lowing 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 $140,000 ...........
$8,907, plus 22% of the excess over 
$77,400. 
Over $140,000 but not over $320,000 .........
$22,679, plus 24% of the excess over 
$140,000.
† HR 1 EAS 
‘‘If taxable income is: 
The tax is: 
Over $320,000 but not over $400,000 .........
$65,879, plus 32% of the excess over 
$320,000. 
Over $400,000 but not over $1,000,000 ......
$91,479, plus 35% of the excess over 
$400,000. 
Over $1,000,000 ............................................
$301,479, plus 38.5% of the excess 
over $1,000,000. 
‘‘(B) HEADS
OF
HOUSEHOLDS.—The fol-
lowing 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 $70,000 .............
$5,944, plus 22% of the excess over 
$51,800. 
Over $70,000 but not over $160,000 ...........
$9,948, plus 24% of the excess over 
$70,000. 
Over $160,000 but not over $200,000 .........
$31,548, plus 32% of the excess over 
$160,000. 
Over $200,000 but not over $500,000 .........
$44,348, plus 35% of the excess over 
$200,000. 
Over $500,000 ...............................................
$149,348, plus 38.5% of the excess 
over $500,000. 
‘‘(C) 
UNMARRIED
INDIVIDUALS
OTHER 
THAN
SURVIVING
SPOUSES
AND
HEADS
OF 
HOUSEHOLDS.—The following table shall be ap-
plied 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 $70,000 .............
$4,453.50, plus 22% of the excess 
over $38,700. 
Over $70,000 but not over $160,000 ...........
$11,339.50, plus 24% of the excess 
over $70,000. 
Over $160,000 but not over $200,000 .........
$32,939.50, plus 32% of the excess 
over $160,000.
† HR 1 EAS 
‘‘If taxable income is: 
The tax is: 
Over $200,000 but not over $500,000 .........
$45,739.50, plus 35% of the excess 
over $200,000. 
Over $500,000 ...............................................
$150,739.50, plus 38.5% of the ex-
cess over $500,000. 
‘‘(D) MARRIED INDIVIDUALS FILING SEPA-
RATE
RETURNS.—The following table shall be 
applied in lieu of the table contained in sub-
section (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 $70,000 .............
$4,453.50, plus 22% of the excess 
over $38,700. 
Over $70,000 but not over $160,000 ...........
$11,339.50, plus 24% of the excess 
over $70,000. 
Over $160,000 but not over $200,000 .........
$32,939.50, plus 32% of the excess 
over $160,000. 
Over $200,000 but not over $500,000 .........
$45,739.50, plus 35% of the excess 
over $200,000. 
Over $500,000 ...............................................
$150,739.50, plus 38.5% of the ex-
cess over $500,000. 
‘‘(E) ESTATES AND TRUSTS.—The following 
table shall be applied in lieu of the table con-
tained 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 38.5% of the excess 
over $12,500. 
‘‘(F) REFERENCES TO RATE TABLES.—Any 
reference in this title to a rate of tax under sub-
† HR 1 EAS 
section (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 treat-
ed as a reference to the fourth lowest rate of tax 
under subparagraph (C). 
‘‘(3) ADJUSTMENTS.— 
‘‘(A) NO ADJUSTMENT IN 2018.—The tables 
contained in paragraph (2) shall apply without 
adjustment for taxable years beginning after De-
cember 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), except that in pre-
scribing such tables— 
‘‘(i) subsection (f)(3) shall be applied 
by substituting ‘calendar year 2017’ for 
‘calendar year 2016’ in subparagraph 
(A)(ii) thereof,
† HR 1 EAS 
‘‘(ii) subsection (f)(7)(B) shall apply to 
any unmarried individual other than a sur-
viving 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 in-
come tax table otherwise applicable under this 
subsection to the child shall be applied with the 
following modifications: 
‘‘(i) 24-PERCENT BRACKET.—The max-
imum taxable income which is taxed at a 
rate below 24 percent shall not be more than 
the earned taxable income of such child. 
‘‘(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—
† HR 1 EAS 
‘‘(I) the earned taxable income of 
such child, plus 
‘‘(II) the minimum taxable in-
come for the 35-percent bracket in the 
table under paragraph (2)(E) (as ad-
justed under paragraph (3)) for the 
taxable year. 
‘‘(iii) 38.5-PERCENT
BRACKET.—The 
maximum taxable income which is taxed at 
a rate below 38.5 percent shall not be more 
than the sum of— 
‘‘(I) the earned taxable income of 
such child, plus 
‘‘(II) the minimum taxable in-
come for the 38.5-percent bracket in the 
table under paragraph (2)(E) (as ad-
justed 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))— 
‘‘(i) the maximum zero rate amount 
shall not be more than the sum of— 
‘‘(I) the earned taxable income of 
such child, plus
† HR 1 EAS 
‘‘(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 tax-
able year. 
‘‘(D) EARNED TAXABLE INCOME.—For pur-
poses of this paragraph, the term ‘earned taxable 
income’ means, with respect to any child for any 
taxable year, the taxable income of such child re-
duced (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 max-
imum zero rate amount’ for ‘which would 
(without regard to this paragraph) be taxed
† HR 1 EAS 
at a rate below 25 percent’ in subparagraph 
(B)(i), and 
‘‘(ii) by substituting ‘below the max-
imum 15-percent rate amount’ for ‘which 
would (without regard to this paragraph) be 
taxed at a rate below 39.6 percent’ in sub-
paragraph (C)(ii)(I). 
‘‘(B) MAXIMUM
AMOUNTS
DEFINED.—For 
purposes of applying section 1(h) with the modi-
fications 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 in-
dividual (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.
† HR 1 EAS 
‘‘(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 indi-
vidual filing a separate return), 
‘‘(II) in the case of an individual 
who is the head of a household (as de-
fined in section 2(b)), $452,400, 
‘‘(III) in the case of any other in-
dividual (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 taxable year beginning after 2018, each of 
the dollar amounts in clauses (i) and (ii) of sub-
paragraph (B) shall be increased by an amount 
equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under subsection (f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar
† HR 1 EAS 
year 2017’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
‘‘(6) SECTION
NOT
TO
APPLY.—Section 15 
shall not apply to any change in a rate of tax by rea-
son of this subsection.’’. 
(b) DUE DILIGENCE TAX PREPARER REQUIREMENT 
WITH RESPECT TO HEAD OF HOUSEHOLD FILING STA-
TUS.—Subsection (g) of section 6695 is amended to read 
as follows: 
‘‘(g) FAILURE TO BE DILIGENT IN DETERMINING ELI-
GIBILITY 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 require-
ments imposed by the Secretary by regulations 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.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017.
† HR 1 EAS 
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 pur-
poses of this subsection— 
‘‘(A) IN GENERAL.—The cost-of-living ad-
justment 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 ob-
tained 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
† HR 1 EAS 
be applied by substituting ‘the C–CPI–U for cal-
endar 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 sub-
section— 
‘‘(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 adjust-
ment 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 Consumer 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
† HR 1 EAS 
12-month period ending on August 31 of such 
calendar year.’’. 
(c) APPLICATION TO PERMANENT TAX TABLES.—Sec-
tion 1(f)(2)(A) is amended by inserting ‘‘, determined by 
substituting ‘1992’ for ‘2016’ in paragraph (3)(A)(ii)’’. 
(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 sub-
paragraph (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 section 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).
340 
† HR 1 EAS 
corporation in which the dividend was received, 
and 
‘‘(B) the United States shareholder shall in-
clude in gross income an amount equal to the 
shareholder’s pro rata share (determined in the 
same manner as under section 951(a)(2)) of the 
subpart F income described in subparagraph 
(A). 
‘‘(3) DENIAL OF FOREIGN TAX CREDIT, ETC.— 
The rules of subsection (d) shall apply to any hybrid 
dividend received by, or any amount included under 
paragraph (2) in the gross income of, a United States 
shareholder. 
‘‘(4) HYBRID DIVIDEND.—The term ‘hybrid divi-
dend’ means an amount received from a controlled 
foreign corporation— 
‘‘(A) for which a deduction would be al-
lowed under subsection (a) but for this sub-
section, and 
‘‘(B) for which the controlled foreign cor-
poration received a deduction (or other tax ben-
efit) from taxes imposed by any foreign country. 
‘‘(f) SPECIAL RULE FOR PURGING DISTRIBUTIONS OF 
PASSIVE FOREIGN INVESTMENT COMPANIES.—Any amount 
which is treated as a dividend under section 1291(d)(2)(B)