‘‘(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.’’.
(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.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by
this section shall apply to taxable years beginning
after December 31, 2003.
(2) SUBSECTION (b).—The amendments made
by subsection (b) shall apply to taxable years begin-
ning after December 31, 2001.
(3) SUBSECTION (c).—The amendments made
by subsection (c) shall apply to taxable years begin-
ning after December 31, 2004.
SEC. 4. MARRIAGE PENALTY RELIEF FOR EARNED INCOME
CREDIT; EARNED INCOME TO INCLUDE ONLY
AMOUNTS INCLUDIBLE IN GROSS INCOME.
(a) IN GENERAL.—Paragraph (2) of section 32(b) of
the Internal Revenue Code of 1986 (relating to percent-
ages and amounts) is amended—
(1) by striking ‘‘AMOUNTS.—The earned’’ and
inserting ‘‘AMOUNTS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the earned’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) JOINT RETURNS.—In the case of a
joint return, the earned income amount deter-
mined under subparagraph (A) shall be 110
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.
‘‘(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.—’’.
(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.
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:
Clerk.
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.