I
103D CONGRESS
1ST SESSION
H. R. 2228
To amend the Internal Revenue Code of 1986 to increase the amount of
the earned income tax credit for taxpayers with school age or preschool
age children, to repeal the health insurance credit thereunder, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 20, 1993
Mr. PETRI (for himself, Mr. MURPHY, Mr. BALLENGER, Mr. PENNY, Mr.
GUNDERSON, Mr. GOODLING, and Mr. FAWELL) 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 increase
the amount of the earned income tax credit for taxpayers
with school age or preschool age children, to repeal the
health insurance credit thereunder, 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 ‘‘Family Living Wage
Act’’.
SEC. 2. INCREASE IN EARNED INCOME TAX CREDIT.
(a) GENERAL RULE.—Subsections (a) and (b) of sec-
tion 32 of the Internal Revenue Code of 1986 (relating
to earned income tax credit) are amended to read as fol-
lows:
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN GENERAL.—In the case of an eligible
individual, there shall be allowed as a credit against
the tax imposed by this subtitle for the taxable year
an amount equal to the credit percentage of so much
of the earned income for the taxable year as does
not exceed $8,000.
‘‘(2) LIMITATION.—The amount of the credit
allowable to a taxpayer under this subsection for any
taxable year shall not exceed the excess (if any) of—
‘‘(A) the credit percentage of $8,000, over
‘‘(B) the phaseout percentage of so much
of the adjusted gross income (or, if greater, the
earned income) of the taxpayer for the taxable
year as exceeds $10,000.
‘‘(b) PERCENTAGES.—For purposes of subsection
(a)—
‘‘(1) CREDIT PERCENTAGE.—
‘‘(A) IN GENERAL.—The credit percentage
is the percentage equal to the sum of—
‘‘(i) 20 percent,
‘‘(ii) 5 percent for each school age
qualifying child, plus
‘‘(iii) 10 percent for each preschool
age qualifying child.
‘‘(B) NOT MORE THAN 4 CHILDREN TAKEN
INTO
ACCOUNT.—Not more than 4 children
shall be taken into account under subparagraph
(A), and preschool age qualifying children shall
be taken into account before any other children
are taken into account.
‘‘(2) PHASEOUT PERCENTAGE.—
‘‘(A) PHASEDOWN
TO
MINIMUM
BENE-
FIT.—
‘‘(i) IN GENERAL.—The phaseout per-
centage is the percentage determined in ac-
cordance with the following table:
‘‘If the combination of
qualifying children taken
into account under
The phaseout
paragraph (1) is—
percentage is—
1 S ....................................................
2 S, or 1 P .......................................
3 S, or 1 S and 1 P .........................
4 S, or 2 S and 1 P, or 2 P .............
3 S and 1 P, or 1 S and 2 P ...........
2 S and 2 P, or 3 P .........................
1 S and 3 P ......................................
4 P ...................................................
20.
‘‘(ii) SYMBOLS USED IN TABLE.—For
purposes of clause (i)—
‘‘(I) S means school age qualify-
ing child, and
‘‘(II) P means preschool age
qualifying child.
‘‘(B) MINIMUM BENEFIT FOR TAXPAYERS
WITH INCOMES BELOW $50,000.—Except as pro-
vided in subparagraph (C), subparagraph (A)
shall not apply so as to reduce the credit al-
lowed by this section to a taxpayer to less than
the minimum benefit determined in accordance
with the following table:
‘‘If the phaseout percentage
The minimum
applicable to the taxpayer is—
benefit is—
13 ...........................................................
$200
14 ...........................................................
400
15 ...........................................................
600
16 ...........................................................
800
17 ...........................................................
1,000
18 ...........................................................
1,200
19 ...........................................................
1,400
20 ...........................................................
1,600.
‘‘(C) PHASEOUT OF MINIMUM BENEFIT.—
If the adjusted gross income (or, if greater, the
earned income) of the taxpayer for the taxable
year exceeds $50,000, the minimum benefit de-
termined under subparagraph (B) shall be re-
duced by 15 percent of such excess.
‘‘(3) SPECIAL RULES FOR INDIVIDUAL WHOSE
ONLY CHILDREN HAVE ATTAINED AGE 16.—For pur-
poses of this section, in the case of an individual
who is an eligible individual solely by reason of chil-
dren each of whom has attained age 16 as of the
close of the taxable year—
‘‘(A) the credit percentage shall be 20 per-
cent,
‘‘(B) the phaseout percentage shall be 12
percent, and
‘‘(C) subparagraphs (B) and (C) of para-
graph (2) shall not apply.’’
(b) PRESCHOOL AGE AND SCHOOL AGE QUALIFYING
CHILDREN DEFINED.—Subsection (c) of section 32 of
such Code is amended by adding at the end the following
new paragraph:
‘‘(4) PRESCHOOL AGE AND SCHOOL AGE QUALI-
FYING CHILDREN.—
‘‘(A) 
PRESCHOOL
AGE
QUALIFYING
CHILD.—The term ‘preschool age qualifying
child’ means any qualifying child who has not
attained age 6 as of the close of the taxable
year.
‘‘(B) SCHOOL AGE QUALIFYING CHILD.—
The term ‘school age qualifying child’ means
any qualifying child who has attained age 6 but
not age 16 as of the close of the taxable year.’’
(c) ADVANCE PAYMENT PROVISIONS.—
(1) Subsection (b) of section 3507 of such Code
is amended by striking ‘‘and’’ at the end of para-
graph (2), by striking the period at the end of para-
graph (3) and inserting ‘‘, and’’, and by inserting
after paragraph (3) the following new paragraph:
‘‘(4) states the number and ages of qualifying
children (as defined in section 32(c)) of the em-
ployee for the taxable year.’’
(2) Paragraph (2) of section 3507(c) of such
Code is amended—
(A) in subparagraph (B)(i), by striking
‘‘(without regard to subparagraph (D)’’ and by
striking ‘‘section 32(a)(1)’’ and inserting ‘‘sec-
tion 32(a)’’,
(B) in subparagraph (B)(ii), by striking
‘‘section 32(b)(1)(B)(ii)’’ and inserting ‘‘section
32(a)(2)’’ and by striking ‘‘section 32(a)(1)’’
and inserting ‘‘section 32(a)’’, and
(C) by adding at the end the following new
sentence:
‘‘For purposes of this paragraph, the credit percent-
age shall be determined under section 32(b) on the
basis of the number and ages of qualifying children
specified in the earned income eligibility certificate
and the determination of the amounts referred to in
subparagraph (B)(ii) shall be made on the basis of
the number and ages of qualifying children so speci-
fied.’’
(3) Clause (i) of section 3507(e)(3)(A) of such
Code is amended by inserting before ‘‘, or’’ the fol-
lowing: ‘‘(or changing the percentages applicable to
the employee under section 32(b) for the taxable
year)’’.
(d) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 32(f) of such Code
is amended—
(A) by striking ‘‘subsection (b)’’ each place
it appears in subparagraphs (A) and (B) and
inserting ‘‘subsection (a)(2)’’, and
(B) by adding at the end the following new
sentence:
‘‘Separate tables shall be prescribed for each of the
phaseout percentages specified in the table contained
in subsection (b)(2)(A)(i).’’
(2) Paragraphs (1) and (2) of section 32(i) of
such Code are amended to read as follows:
‘‘(1) IN GENERAL.—In the case of any taxable
year beginning after 1995, each amount referred to
in paragraph (2) shall be increased by an amount
equal to—
‘‘(A) such amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar
year in which the taxable year begins by sub-
stituting ‘1994’ for ‘1989’ in subparagraph (B)
thereof.
‘‘(2) AMOUNTS.—The amounts referred to in
this paragraph are—
‘‘(A) the credit percentages used for pur-
poses of subsection (a),
‘‘(B) the $10,000 amount contained in
subsection (a)(2)(B), and
‘‘(C) the $50,000 amount contained in
subsection (b)(2)(C).’’
(3) Section 213 of such Code (relating to medi-
cal, dental, etc., expenses) is amended by striking
subsection (f).
(4) Paragraph (3) of section 162(l) of such
Code is amended to read as follows:
‘‘(3) COORDINATION
WITH
MEDICAL
DEDUC-
TION.—Any amount paid by a taxpayer for insur-
ance to which paragraph (1) applies shall not be
taken into account in computing the amount allow-
able to the taxpayer as a deduction under section
213(a).’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993; except that the amendments made
by subsection (c) shall take effect on January 1, 1994.
SEC. 3. DEPENDENT CARE CREDIT LIMITED TO HANDI-
CAPPED DEPENDENTS AND SPOUSES.
(a) IN GENERAL.—Paragraph (1) of section 21(b) of
the Internal Revenue Code of 1986 (defining qualifying
individual and employment-related expenses) is amended
by striking subparagraph (A), by redesignating subpara-
graphs (B) and (C) as subparagraphs (A) and (B), respec-
tively, and by adding at the end the following new sen-
tence:
‘‘In the case of an individual described in subpara-
graph (A) who has not attained age 16 as of the
close of the taxable year, such individual may be
treated as a qualifying individual for purposes of
this section only if the taxpayer elects not to treat
such individual as a qualifying child under section
32 for such year.’’
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (B) of section 21(b)(2) of
such Code is amended by striking ‘‘care of—’’ and
all that follows and inserting ‘‘care of a qualifying
individual who regularly spends at least 8 hours
each day in the taxpayer’s household.’’
(2) Paragraph (2) of section 21(d) of such Code
is amended by striking ‘‘subsection (b)(1)(C)’’ and
inserting ‘‘subsection (b)(1)(B)’’.
(3) Paragraph (5) of section 21(e) of such Code
is amended—
(A) by striking ‘‘is under the age of 13 or’’
in subparagraph (B), and
(B) by striking ‘‘subparagraph (A) or (B)
of subsection (b)(1) (whichever is appropriate)’’
and inserting ‘‘subsection (b)(1)(A)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
SEC. 4. ELIMINATION OF PROPOSED CHANGES IN TREAT-
MENT OF EARNED INCOME CREDIT IN DE-
TERMINING CERTAIN WELFARE BENEFITS.
Paragraphs (1) and (2)(A) of section 402(c) of the
Family Support Act of 1988 are repealed.
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