Tax Simplification for Americans Abroad Act
Bill: H.R.6057 | Sponsor: Rep. Beyer, Donald S., Jr. (D-VA)
Policy area: Taxation

Summary:
Tax Simplification for Americans Abroad Act
This bill directs the Internal Revenue Service to make available a new tax form for certain individual taxpayers living abroad. The form shall allow such individuals to demonstrate nonresidence, and declare foreign income, foreign taxes paid, and U.S. source income from retirement, pension and social security benefits.
The bill also expands the types of income allowed as foreign earned income for purposes of the foreign earned income tax exclusion.

To create a short form tax return to simplify the return process for 
        certain taxpayers living abroad, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Simplification for Americans 
Abroad Act''.

SEC. 2. SHORT FORM FOR CERTAIN TAXPAYERS LIVING ABROAD.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall make available a form for use by specified individuals 
to file the return of tax imposed by chapter 1 of the Internal Revenue 
Code of 1986. Such form shall replace Forms 1040, 2555, 1116, 5471, 
3520, 708, and other forms for disclosing income, deductions and 
offsets, and shall be as similar to Form 1040-EZ as it existed in 2017, 
except that the form shall allow an individual to, with respect to a 
taxable year--
            (1) demonstrate that such individual is a non-resident for 
        purposes of the substantial presence test under section 
        7701(b)(3) of such Code,
            (2) declare foreign income described in section 911,
            (3) characterize income based on source, including--
                    (A) wages,
                    (B) contract income,
                    (C) foreign government benefits,
                    (D) pension and other retirement income,
                    (E) scholarships and fellowship grants,
                    (F) interest,
                    (G) dividends, and
                    (H) capital gains,
            (4) claim the standard deduction and, if applicable, the 
        child tax credit and earned income tax credit,
            (5) declare foreign taxes paid, and
            (6) declare United States source income from retirement, 
        pension and social security benefits to be treated as resourced 
        from treaty income where tax has been paid upon distribution.
    (b) Specified Individual.--
            (1) In general.--For purposes of this section, the term 
        ``specified individual'' means, with respect to a taxable year, 
        an individual--
                    (A) who qualifies as a non-resident citizen under 
                the substantial presence test of section 7701(b)(3), or 
                is the spouse of non-resident citizen, and
                    (B) who declares--
                            (i) an income less than $400,000, and
                            (ii) a tax liability of $0.
            (2) Inflation adjustment.--
                    (A) In general.--In the case of any taxable year 
                beginning after 2023, the $400,000 amount in paragraph 
                (1)(B)(i) shall be increased by an amount equal to--
                            (i) such dollar amount, multiplied by
                            (ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting ``2022'' for 
                        ``2016'' in subparagraph (A)(ii) thereof.
    (c) Effective Date.--The form required by subsection (a) shall be 
made available for taxable years beginning one year after the date of 
the enactment of this Act.

SEC. 3. EXPANSION OF INCOME ALLOWED AS FOREIGN EARNED INCOME.

    (a) In General.--Section 911 of the Internal Revenue Code of 1986 
is amended--
            (1) in subsection (b)(1)(B), by striking clause (i) and by 
        redesignating clauses (ii) through (iv) as clause (i) through 
        (iii), respectively,
            (2) in subsection (b)(1)(A), by striking ``attributable to 
        services performed by such individual'' and inserting 
        ``attributable to services performed by such individual or 
        benefits received by such individual'', and
            (3) in subsection (d)(2), by striking ``wages, salaries, or 
        professional fees'' and inserting ``wages, salaries, 
        professional fees, pensions, scholarships, fellowship grants, 
        interest and dividends, capital gains, distributions from 
        retirement funds, or payments received by the taxpayer with 
        respect to disability, unemployment, family medical leave, or 
        childcare''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>