Obamacare Marriage Penalty Elimination Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Obamacare Marriage Penalty 
Elimination Act''.

SEC. 2. ELIMINATION OF MARRIAGE PENALTY IN HEALTH INSURANCE PREMIUM TAX 
              CREDIT.

    (a) In General.--Section 36B(d) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(4) Elimination of marriage penalty.--In the case of a 
        joint return--
                    ``(A) Credit determined separately with respect to 
                each spouse.--The credit allowed under this section 
                shall be sum of the two credits determined under this 
                section separately with respect to each spouse (as 
                provided under this subparagraph).
                    ``(B) Treatment of income of spouses.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), each spouse shall take into 
                        account the income of such spouse for purposes 
                        of this section.
                            ``(ii) Income split not to result in 
                        ineligibility for credit for either spouse.--
                        If--
                                    ``(I) the poverty line with respect 
                                to a spouse (determined after 
                                application of this paragraph but 
                                without regard to this clause) exceeds 
                                the income taken into account by such 
                                spouse for purposes of this section (as 
                                so determined), and
                                    ``(II) the income taken into 
                                account by the other spouse for 
                                purposes of this section (as so 
                                determined) exceeds the sum of the 
                                poverty line with respect to such other 
                                spouse (as so determined) plus the 
                                excess described in subclause (I),
                        the excess described in subclause (I) shall be 
                        taken into account as income of the spouse 
                        referred to in subclause (I) and not as income 
                        of the spouse referred to in subclause (II).
                    ``(C) Treatment of dependents.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), dependents of the taxpayer shall 
                        be allocated between the two spouses at the 
                        election of the taxpayer. For purposes of 
                        determining the family size involved and 
                        household income with respect to each spouse, 
                        only such spouse and the dependents allocated 
                        to such spouse under this subparagraph shall be 
                        taken into account
                            ``(ii) Limitation on taxpayer allocation.--
                        The number of dependents allocated to a spouse 
                        under clause (i) cannot exceed the number of 
                        dependents allocated to the other spouse by 
                        more than 1 dependent.
                    ``(D) Treatment of premiums.--To the extent that 
                the amount of any monthly premium is determined 
                separately with respect to either spouse or any 
                dependent of the taxpayer, such premium shall be taken 
                into account by such spouse or the spouse to which such 
                dependent is allocated under subparagraph (C). In the 
                case of any monthly premium which is not so separately 
                determined, such premium may be allocated between the 
                two spouses at the election of the taxpayer.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 3. REDUCTION IN POVERTY LINE ELIGIBILITY LIMITATION FOR HEALTH 
              INSURANCE PREMIUM TAX CREDIT.

    (a) Amendments to the Internal Revenue Code of 1986.--
            (1) In general.--Section 36B(c)(1)(A) of the Internal 
        Revenue Code of 1986 is amended by striking ``400 percent'' and 
        inserting ``the applicable percentage''.
            (2) Applicable percentage.--Section 36B(c)(1) of such Code 
        is amended by redesignating subparagraphs (B), (C), and (D) as 
        subparagraphs (C), (D), and (E), respectively, and by inserting 
        after subparagraph (A) the following new subparagraph:
                    ``(B) Applicable percentage.--The term `applicable 
                percentage' means such percentage as the Secretary, 
                after consultation with the Secretary of Health and 
                Human Services, determines will result in a combination 
                of increased Federal revenues and reduced Federal 
                outlays which is equal to the combination of reduced 
                Federal revenues and increased Federal outlays as a 
                result of the amendments made by section 2 of the 
                Obamacare Marriage Penalty Elimination Act.''.
            (3) Conforming amendments.--
                    (A) Section 36B(b)(3)(A)(i) of such Code is amended 
                by inserting ``and subsection (c)(1)(A)'' after 
                ``Except as provided in clause (ii)''.
                    (B) Section 36B(f)(2)(B)(i) of such Code is amended 
                by striking ``400 percent'' and inserting ``the 
                applicable percentage (as defined in subsection 
                (c)(1)(B))''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2015.
    (b) Amendments to the Patient Protection and Affordable Care Act.--
            (1) In general.--Section 1402(b)(2) of the Patient 
        Protection and Affordable Care Act is amended by striking ``400 
        percent'' and inserting ``the applicable percentage (as defined 
        in section 36B(c)(1)(B) of the Internal Revenue Code of 
        1986)''.
            (2) Conforming amendments.--
                    (A) Section 1402(c)(1)(A) of such Act is amended by 
                striking ``The reduction'' and inserting ``Except as 
                provided in subsection (b)(2), the reduction''.
                    (B) Section 1402(c)(1)(B)(i) of such Act is amended 
                by striking ``The Secretary'' and inserting ``Except as 
                provided in subsection (b)(2), the Secretary''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to months beginning after December 31, 2015.

Summary: Obamacare Marriage Penalty Elimination Act This bill amends the Internal Revenue Code, with respect to the tax credit for health care insurance premium assistance, to: (1) calculate the amount of such credit in the case of a joint tax return as the sum of each credit amount allowed to each spouse, thus&nbsp;preventing the tax effect known as the marriage penalty; and (2) replace the 400% poverty line eligibility limit for such credit with an applicable percentage based on a calculation of the combination of increased tax revenues and decreased outlays resulting from this Act.