I
106TH CONGRESS
1ST SESSION
H. R. 1819
To amend the Internal Revenue Code of 1986 to allow individuals who
are not eligible to participate in employer-subsidized health plans a
refundable credit for their health insurance costs.
IN THE HOUSE OF REPRESENTATIVES
MAY 14, 1999
Mr. MCDERMOTT (for himself, Mr. ROGAN, Mr. STARK, Mr. GRAHAM, Mr.
MATSUI, Mr. LEWIS of Georgia, Mr. NEAL of Massachusetts, Mrs. THUR-
MAN, Mrs. EMERSON, Ms. KILPATRICK, Mr. FROST, Mr. INSLEE, Mr.
SHOWS, Mr. MCHUGH, and Ms. PELOSI) 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 allow indi-
viduals who are not eligible to participate in employer-
subsidized health plans a refundable credit for their
health insurance costs.
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 ‘‘Working Uninsured
Tax Equity Act of 1999’’.
SEC. 2. REFUNDABLE CREDIT FOR HEALTH INSURANCE
COSTS.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable personal credits) is amended
by redesignating section 35 as section 36 and by inserting
after section 34 the following new section:
‘‘SEC. 35. HEALTH INSURANCE COSTS.
‘‘(a) IN GENERAL.—In the case of an individual,
there shall be allowed as a credit against the tax imposed
by this subtitle an amount equal to 30 percent of the
amount paid during the taxable year for insurance which
constitutes medical care for the taxpayer, his spouse, and
dependents.
‘‘(b) LIMITATIONS.—
‘‘(1) LIMITATION
BASED
ON
EARNED
IN-
COME.—The payments taken into account under
subsection (a) for any taxable year shall not exceed
the sum of—
‘‘(A) the taxpayer’s wages, salaries, tips,
and other employee compensation includible in
gross income, plus
‘‘(B) the taxpayer’s earned income (as de-
fined in section 401(c)(2)).
‘‘(2) LIMITATION
BASED
ON
OTHER
COV-
ERAGE.—Subsection (a) shall not apply to—
‘‘(A) any taxpayer for any calendar month
for which the taxpayer is eligible to participate
in any subsidized health plan maintained by
any employer of the taxpayer or of the spouse
of the taxpayer, or
‘‘(B) amounts paid for coverage under—
‘‘(i) part B of title XVIII of the Social
Security Act, or
‘‘(ii) a Medicare supplemental policy
(within the meaning of section 1882(g)(1)
of the Social Security Act (42 U.S.C.
1395ss(g)(1))) or similar supplemental
coverage provided under a group health
plan.
The rule of the last sentence of section 162(l)(2)(B)
shall apply for purposes of subparagraph (A).
‘‘(c) LIMITATION BASED ON ADJUSTED GROSS IN-
COME.—
‘‘(1) IN GENERAL.—No credit shall be allowed
under subsection (a) for any taxable year for which
the taxpayer’s adjusted gross income exceeds the ap-
plicable dollar amount by $10,000 or more.
‘‘(2) PHASEOUT.—If the taxpayer’s adjusted
gross income for the taxable year exceeds the appli-
cable dollar amount by less than $10,000, the credit
which would (but for this subsection and subsection
(d)) be allowed under subsection (a) shall be reduced
(but not below zero) by an amount which bears the
same ratio to such credit as such excess bears to
$10,000. Any reduction under the preceding sen-
tence which is not a multiple of $10 shall be round-
ed to the next lowest $10.
‘‘(3) APPLICABLE DOLLAR AMOUNT.—The term
‘applicable dollar amount’ means—
‘‘(A) in the case of a taxpayer filing a joint
return, $50,000,
‘‘(B) in the case of any other taxpayer
(other than a married individual filing a sepa-
rate return), $30,000, and
‘‘(C) in the case of a married individual fil-
ing a separate return, zero.
‘‘(4) SPECIAL RULE FOR MARRIED INDIVIDUALS
FILING SEPARATELY AND LIVING APART.—A hus-
band and wife who—
‘‘(A) file separate returns for any taxable
year, and
‘‘(B) live apart at all times during such
taxable year,
shall not be treated as married individuals for pur-
poses of this paragraph.
‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—
‘‘(1) IN GENERAL.—The credit allowed by sub-
section (a) for the taxable year (determined after the
application of subsections (b) and (c)) shall not ex-
ceed the sum of—
‘‘(A) the tax imposed by this chapter for
the taxable year (reduced by the credits allow-
able against such tax other than the credits al-
lowable under this subpart), and
‘‘(B) the taxpayer’s social security taxes
for such taxable year.
‘‘(2) SOCIAL SECURITY TAXES.—For purposes
of paragraph (1)—
‘‘(A) IN GENERAL.—The term ‘social secu-
rity taxes’ means, with respect to any taxpayer
for any taxable year—
‘‘(i) the amount of the taxes imposed
by sections 3101, 3111, 3201(a), and
3221(a) on amounts received by the tax-
payer during the calendar year in which
the taxable year begins,
‘‘(ii) the taxes imposed by section
1401 on the self-employment income of the
taxpayer for the taxable year, and
‘‘(iii) the taxes imposed by section
3211(a)(1) on amounts received by the
taxpayer during the calendar year in which
the taxable year begins.
‘‘(B) COORDINATION
WITH
SPECIAL
RE-
FUND OF SOCIAL SECURITY TAXES.—The term
‘social security taxes’ shall not include any
taxes to the extent the taxpayer is entitled to
a special refund of such taxes under section
6413(c).
‘‘(C) SPECIAL RULE.—Any amounts paid
pursuant to an agreement under section 3121(l)
(relating to agreements entered into by Amer-
ican employers with respect to foreign affiliates)
which are equivalent to the taxes referred to in
subparagraph (A)(i) shall be treated as taxes
referred to in such subparagraph.
‘‘(e) COORDINATION WITH OTHER PROVISIONS.—
‘‘(1) DEDUCTION FOR MEDICAL EXPENSES.—
The amount taken into account in computing the
credit under subsection (a) shall not be taken into
account in computing the amount allowable to the
taxpayer as a deduction under section 213(a).
‘‘(2) SELF-EMPLOYED
INDIVIDUALS
ALLOWED
EITHER DEDUCTION OR CREDIT FOR HEALTH IN-
SURANCE.—No credit shall be allowed under this
section to a taxpayer for a taxable year if any
amount is allowed as a deduction to such taxpayer
for such year under section 162(l).
‘‘(f) EXPENSES MUST BE SUBSTANTIATED.—A pay-
ment for insurance to which subsection (a) applies may
be taken into account under this section only if the tax-
payer substantiates such payment in such form as the Sec-
retary may prescribe.
‘‘(g) SECTION NOT TO APPLY TO LONG-TERM CARE
INSURANCE.—This section shall not apply to insurance
which constitutes medical care by reason of section
213(d)(1)(C).’’
(b) CLERICAL AMENDMENT.—The table of sections
for subpart C of part IV of subchapter A of chapter 1
of such Code is amended by striking the last item and
inserting the following new items:
‘‘Sec. 35. Health insurance costs.
‘‘Sec. 36. Overpayments of tax.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
Æ