II
Calendar No. 68
107TH CONGRESS
1ST SESSION
H. R. 6
IN THE SENATE OF THE UNITED STATES
MARCH 29, 2001
Received
JUNE 6, 2001
Read the first time
JUNE 7, 2001
Read the second time and placed on the calendar
AN ACT
To amend the Internal Revenue Code of 1986 to reduce
the marriage penalty by providing for adjustments to
the standard deduction, the 15-percent rate bracket, and
the earned income credit, to increase the child credit,
and for other purposes.
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Marriage Penalty and Family Tax Relief Act of 2001’’.
(b) SECTION 15 NOT TO APPLY.—No amendment
made by this Act shall be treated as a change in a rate
of tax for purposes of section 15 of the Internal Revenue
Code of 1986.
SEC. 2. ELIMINATION OF MARRIAGE PENALTY IN STAND-
ARD DEDUCTION.
(a) IN GENERAL.—Paragraph (2) of section 63(c) of
the Internal Revenue Code of 1986 (relating to standard
deduction) is amended—
(1) by striking ‘‘$5,000’’ in subparagraph (A)
and inserting ‘‘200 percent of the dollar amount in
effect under subparagraph (C) for the taxable year’’;
(2) by adding ‘‘or’’ at the end of subparagraph
(B);
(3) by striking ‘‘in the case of’’ and all that fol-
lows in subparagraph (C) and inserting ‘‘in any
other case.’’; and
(4) by striking subparagraph (D).
(b) TECHNICAL AMENDMENTS.—
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(1) Subparagraph (B) of section 1(f)(6) of such
Code is amended by striking ‘‘(other than with’’ and
all that follows through ‘‘shall be applied’’ and in-
serting ‘‘(other than with respect to sections
63(c)(4) and 151(d)(4)(A)) shall be applied’’.
(2) Paragraph (4) of section 63(c) of such Code
is amended by adding at the end the following flush
sentence:
‘‘The preceding sentence shall not apply to the
amount referred to in paragraph (2)(A).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
SEC. 3. PHASEOUT OF MARRIAGE PENALTY IN 15-PERCENT
BRACKET.
(a) IN GENERAL.—Subsection (f) of section 1 of the
Internal Revenue Code of 1986 (relating to adjustments
in tax tables so that inflation will not result in tax in-
creases) is amended by adding at the end the following
new paragraph:
‘‘(8) PHASEOUT OF MARRIAGE PENALTY IN 15-
PERCENT BRACKET.—
‘‘(A) IN GENERAL.—With respect to tax-
able years beginning after December 31, 2003,
in prescribing the tables under paragraph (1)—
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‘‘(i) the maximum taxable income in
the lowest rate bracket in the table con-
tained in subsection (a) (and the minimum
taxable income in the next higher taxable
income bracket in such table) shall be the
applicable percentage of the maximum tax-
able income in the lowest rate bracket in
the table contained in subsection (c) (after
any other adjustment under this sub-
section), and
‘‘(ii) the comparable taxable income
amounts in the table contained in sub-
section (d) shall be 1⁄2 of the amounts de-
termined under clause (i).
‘‘(B) 
APPLICABLE
PERCENTAGE.—For
purposes of subparagraph (A), the applicable
percentage shall be determined in accordance
with the following table:
‘‘For taxable years beginning
The applicable
in calendar year—
percentage is—
2004 .............................................................................
172
2005 .............................................................................
178
2006 .............................................................................
183
2007 .............................................................................
189
2008 .............................................................................
195
2009 and thereafter .....................................................
200.
‘‘(C) ROUNDING.—If any amount deter-
mined under subparagraph (A)(i) is not a mul-
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tiple of $50, such amount shall be rounded to
the next lowest multiple of $50.’’.
(b) REPEAL OF REDUCTION OF REFUNDABLE TAX
CREDITS.—
(1) Subsection (d) of section 24 of such Code
is amended by striking paragraph (2) and redesig-
nating paragraph (3) as paragraph (2).
(2) Section 32 of such Code is amended by
striking subsection (h).
(c) INCREASE IN ALTERNATIVE MINIMUM TAX EX-
EMPTION AMOUNT FOR JOINT RETURNS.—
(1) IN GENERAL.—Subsection (d) of section 55
of such Code is amended by adding at the end the
following new paragraph:
‘‘(4) ADJUSTMENT
OF
EXEMPTION
AMOUNT
FOR JOINT RETURNS.—
‘‘(A) IN GENERAL.—The dollar amount ap-
plicable under paragraph (1)(A) for 2008 and
each even-numbered calendar year thereafter—
‘‘(i) shall be $500 greater than the
dollar amount applicable under paragraph
(1)(A) for the prior even-numbered cal-
endar year, and
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‘‘(ii) shall apply to taxable years be-
ginning in such even-numbered calendar
year and in the succeeding calendar year.
In no event shall the dollar amount applicable
under paragraph (1)(A) exceed twice the dollar
amount applicable under paragraph (1)(B).
‘‘(B) EXEMPTION AMOUNTS FOR 2005, 2006,
AND 2007.—The dollar amount applicable under
paragraph (1)(A) shall be—
‘‘(i) $46,000 for taxable years begin-
ning in 2005, and
‘‘(ii) $46,500 for taxable years begin-
ning in 2006 or 2007.’’.
(2) CONFORMING AMENDMENTS.—
(A) Paragraph (1) of section 55(d) of such
Code is amended by striking ‘‘and’’ at the end
of subparagraph (B), by striking subparagraph
(C), and by inserting after subparagraph (B)
the following new subparagraphs:
‘‘(C) 50 percent of the dollar amount ap-
plicable under paragraph (1)(A) in the case of
a married individual who files a separate re-
turn, and
‘‘(D) $22,500 in the case of an estate or
trust.’’.
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(B) Subparagraph (C) of section 55(d)(3)
of such Code is amended by striking ‘‘para-
graph (1)(C)’’ and inserting ‘‘subparagraph (C)
or (D) of paragraph (1)’’.
(C) The last sentence of section 55(d)(3)
of such Code is amended—
(i) by striking ‘‘paragraph (1)(C)(i)’’
and inserting ‘‘paragraph (1)(C)’’; and
(ii) by striking ‘‘$165,000 or (ii)
$22,500’’ and inserting ‘‘the minimum
amount of such income (as so determined)
for which the exemption amount under
paragraph (1)(C) is zero, or (ii) such ex-
emption amount (determined without re-
gard to this paragraph)’’.
(d) TECHNICAL AMENDMENTS.—
(1) Subparagraph (A) of section 1(f)(2) of such
Code is amended by inserting ‘‘except as provided in
paragraph (8),’’ before ‘‘by increasing’’.
(2) The heading for subsection (f) of section 1
of such Code is amended by inserting ‘‘PHASEOUT
OF MARRIAGE PENALTY IN 15-PERCENT BRACKET;’’
before ‘‘ADJUSTMENTS’’.
(e) EFFECTIVE DATES.—
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percent of the otherwise applicable amount. If
any amount determined under the preceding
sentence is not a multiple of $10, such amount
shall be rounded to the nearest multiple of
$10.’’.
(b) EARNED INCOME TO INCLUDE ONLY AMOUNTS
INCLUDIBLE IN GROSS INCOME.—Clause (i) of section
32(c)(2)(A) of such Code (defining earned income) is
amended by inserting ‘‘, but only if such amounts are in-
cludible in gross income for the taxable year’’ after ‘‘other
employee compensation’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
SEC. 5. MODIFICATIONS TO CHILD TAX CREDIT.
(a) INCREASE IN PER CHILD AMOUNT.—Subsection
(a) of section 24 of the Internal Revenue Code of 1986
(relating to child tax credit) is amended to read as follows:
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN GENERAL.—There shall be allowed as a
credit against the tax imposed by this chapter for
the taxable year with respect to each qualifying child
of the taxpayer an amount equal to the per child
amount.
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‘‘(2) PER
CHILD
AMOUNT.—For purposes of
paragraph (1), the per child amount shall be deter-
mined as follows:
‘‘In the case of any taxable
year beginning in—
The per child amount is—
2001 and 2002 .........................................................................
$
600
2003 .........................................................................................
700
2004 .........................................................................................
800
2005 .........................................................................................
900
2006 or thereafter ....................................................................
1,000.’’.
(b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
IMUM TAX.—
(1) IN GENERAL.—Subsection (b) of section 24
of such Code is amended by adding at the end the
following new paragraph:
‘‘(3) LIMITATION
BASED
ON
AMOUNT
OF
TAX.—The credit allowed under subsection (a) for
any taxable year shall not exceed the excess of—
‘‘(A) the sum of the regular tax liability
(as defined in section 26(b)) plus the tax im-
posed by section 55, over
‘‘(B) the sum of the credits allowable
under this subpart (other than this section) and
section 27 for the taxable year.’’.
(2) CONFORMING AMENDMENTS.—
(A) The heading for section 24(b) of such
Code is amended to read as follows: ‘‘LIMITA-
TIONS.—’’.
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(B) The heading for section 24(b)(1) of
such Code is amended to read as follows: ‘‘LIM-
ITATION
BASED
ON
ADJUSTED
GROSS
IN-
COME.—’’.
(C) Section 24(d) of such Code is
amended—
(i) by striking ‘‘section 26(a)’’ each
place it appears and inserting ‘‘subsection
(b)(3)’’, and
(ii) in paragraph (1)(B) by striking
‘‘aggregate amount of credits allowed by
this subpart’’ and inserting ‘‘amount of
credit allowed by this section’’.
(D) Paragraph (1) of section 26(a) of such
Code is amended by inserting ‘‘(other than sec-
tion 24)’’ after ‘‘this subpart’’.
(E) Subsection (c) of section 23 of such
Code is amended by striking ‘‘and section
1400C’’ and inserting ‘‘and sections 24 and
1400C’’.
(F) Subparagraph (C) of section 25(e)(1)
of such Code is amended by inserting ‘‘, 24,’’
after ‘‘sections 23’’.
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(G) Section 904(h) of such Code is amend-
ed by inserting ‘‘(other than section 24)’’ after
‘‘chapter’’.
(H) Subsection (d) of section 1400C of
such Code is amended by inserting ‘‘and section
24’’ after ‘‘this section’’.
(c) ADDITIONAL CREDIT FOR FAMILIES WITH 3 OR
MORE CHILDREN AVAILABLE TO ALL FAMILIES.—Sub-
section (d) of section 24 of such Code is amended—
(1) in paragraph (1) by striking ‘‘In the case of
a taxpayer with three or more qualifying children for
any taxable year, the’’ and inserting ‘‘The’’, and
(2) in the subsection heading by striking
‘‘WITH 3 OR MORE CHILDREN’’ and inserting ‘‘PAY-
ING SOCIAL SECURITY TAXES’’.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to taxable years beginning after Decem-
ber 31, 2000.
(2) SUBSECTION (b).—The amendments made
by subsection (b) shall apply to taxable years begin-
ning after December 31, 2001.
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SEC. 6. PROTECTION OF SOCIAL SECURITY AND MEDICARE.
The amounts transferred to any trust fund under the
Social Security Act shall be determined as if this Act had
not been enacted.
Passed the House of Representatives March 29,
2001.
Attest:
JEFF TRANDAHL,
Clerk.
Calendar No. 68
107TH CONGRESS
1ST SESSION
H. R. 6
AN ACT
To amend the Internal Revenue Code of 1986 to
reduce the marriage penalty by providing for ad-
justments to the standard deduction, the 15-per-
cent rate bracket, and the earned income credit,
to increase the child credit, and for other pur-
poses.
JUNE 7, 2001
Read the second time and placed on the calendar