WRCR Act of 2021
Bill: H.R.4665 | Sponsor: Rep. Moore, Gwen (D-WI)
Policy area: Taxation

Summary:
Worker Relief and Credit Reform Act of 2021 or the WRCR Act of 2021
This bill modifies the earned income tax credit to (1) make the credit available to certain students, (2) modify the age requirement for the credit, (3) include care-giving and learning as compensated work for purposes of the credit, (4) revise the definition of qualifying dependents eligible for the credit, (5) increase the credit for certain unmarried individuals with two or more qualifying children, and (6) require the Internal Revenue Service (IRS) to establish a program for making direct advance monthly payments of the credit to eligible taxpayers.
The bill directs the IRS to establish a program to educate taxpayers about the availability of the earned income tax credit and the advance monthly payments of such credit.

To amend the Internal Revenue Code of 1986 to expand and improve the 
                       earned income tax credit.

    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 ``Worker Relief and Credit Reform Act 
of 2021'' or as the ``WRCR Act of 2021''.

SEC. 2. EXPANSION AND IMPROVEMENT OF EARNED INCOME TAX CREDIT.

    (a) Application to Students.--
            (1) In general.--Section 32(c)(1)(A)(i) of the Internal 
        Revenue Code of 1986 is amended by inserting ``who is a 
        qualifying student or'' after ``any individual''.
            (2) Qualifying student.--Section 32(c) of such Code is 
        amended by redesignating paragraph (4) as paragraph (5) and 
        inserting after paragraph (3) the following new paragraph:
            ``(4) Qualifying student.--
                    ``(A) In general.--The term `qualifying student' 
                means, with respect to any taxable year, any individual 
                who--
                            ``(i) is an eligible student (as defined in 
                        section 25A(b)(3)) with respect to at least one 
                        academic period beginning during such taxable 
                        year,
                            ``(ii) either--
                                    ``(I) qualifies for a Federal Pell 
                                Grant with respect to such academic 
                                period, or
                                    ``(II) meets the requirements of 
                                subparagraph (B) or (C) for the taxable 
                                year, and
                            ``(iii) is not a dependent for whom a 
                        deduction is allowable under section 151 to 
                        another taxpayer for any taxable year beginning 
                        in the same calendar year as such taxable year.
                    ``(B) Independent students.--In the case of any 
                independent student, the requirements of this 
                subparagraph are met for such taxable year if the 
                household income of the taxpayer is less than 300 
                percent of the poverty line for the size of the family 
                involved for the taxable year.
                    ``(C) Other students.--
                            ``(i) In general.--In the case of any 
                        individual who is not an independent student, 
                        the requirements of this subparagraph are met 
                        for such taxable year if the aggregate 
                        household incomes of all the individual's 
                        specified supporters (and the taxpayer if not 
                        otherwise taken into account) for the taxable 
                        years of such supporters which end in or with 
                        the calendar year in which such individual's 
                        taxable year begins is less than 300 percent of 
                        the poverty line for the size of the family 
                        involved (determined on a single aggregate 
                        basis) for the taxable year.
                            ``(ii) Specified supporter.--The term 
                        `specified supporter' means, with respect to 
                        any individual described in clause (i), any 
                        taxpayer with respect to whom such individual 
                        was a dependent for any taxable year ending in 
                        the 3-year period described in subparagraph 
                        (D)(i).
                    ``(D) Independent student defined.--
                            ``(i) In general.--The term `independent 
                        student' means any individual if such 
                        individual was not a dependent of another 
                        taxpayer for any taxable year ending in the 3-
                        year period which ends on the first day of the 
                        first academic period with respect to which 
                        such individual is an eligible student (as 
                        defined in section 25A(b)(3)).
                            ``(ii) Certain academic periods 
                        disregarded.--An academic period shall be 
                        disregarded under clause (i) if such academic 
                        period ends more than 2 years before the 
                        beginning of the next academic period with 
                        respect to which the individual is an eligible 
                        student (as defined in section 25A(b)(3)).
                    ``(E) Other definitions.--
                            ``(i) Household income.--The term 
                        `household income' has the meaning given such 
                        term in section 36B(d)(2).
                            ``(ii) Poverty line.--The term `poverty 
                        line' has the meaning given such term in 
                        section 36B(d)(3)(A).
                            ``(iii) Family size.--The family size 
                        involved with respect to any taxpayer shall be 
                        determined under rules similar to the rules of 
                        section 36B(d)(1).''.
            (3) Conforming amendment.--Section 32(c)(1)(A)(ii) of such 
        Code is amended by striking ``any other individual who does not 
        have a qualifying child'' and inserting ``any individual not 
        described in clause (i)''.
    (b) Modification of Age Requirements.--Section 32(c)(1)(A)(ii)(II) 
of such Code is amended by striking ``has attained age 25 but not 
attained age 65'' and inserting ``has attained age 18''.
    (c) Care-Giving and Learning Taken Into Account as Compensated 
Work.--Section 32(a) of such Code is amended by adding at the end the 
following new paragraph:
            ``(3) Special rule for qualifying students and certain 
        individuals with one or more qualifying dependents.--For 
        purposes of paragraph (1), any individual--
                    ``(A) who is a qualifying student, or
                    ``(B) who has a qualifying dependent,
        shall be treated as having earned income for the taxable year 
        which is equal to the earned income amount with respect to such 
        individual for such taxable year.''.
    (d) Treatment of Certain Qualifying Relatives.--
            (1) In general.--Section 32(c)(3) of such Code is amended 
        by striking all that precedes subparagraph (B) and inserting 
        the following:
            ``(3) Qualifying dependent.--
                    ``(A) In general.--The term `qualifying dependent' 
                means--
                            ``(i) a qualifying child of the taxpayer, 
                        as defined in section 152(c), determined--
                                    ``(I) by substituting `12' for `19' 
                                in paragraph (3)(A)(i) thereof, and
                                    ``(II) without regard to paragraphs 
                                (1)(D) and (3)(A)(ii) thereof and 
                                section 152(e),
                            ``(ii) any individual who is physically or 
                        mentally incapable of caring for himself or 
                        herself (within the meaning of section 
                        21(b)(1)) and who--
                                    ``(I) is the taxpayer's spouse, or
                                    ``(II) is a qualifying relative of 
                                the taxpayer, as defined in section 
                                152(d), determined without regard to 
                                paragraph (1)(B) thereof and by 
                                treating an individual as a qualifying 
                                child of the taxpayer for purposes of 
                                paragraph (1)(D) thereof only if such 
                                individual is a qualifying child of the 
                                taxpayer as determined under clause (i) 
                                of this subparagraph, or
                            ``(iii) any qualifying relative of the 
                        taxpayer (as defined in section 152(d), 
                        determined without regard to paragraph (1)(B) 
                        thereof) who has attained age 65 as of the 
                        close of the calendar year in which the taxable 
                        year of the taxpayer begins.
                For purposes of determining if any individual is a 
                qualifying relative of the taxpayer under clause 
                (ii)(II) or (iii), section 152(d)(1)(C) shall be 
                applied by not taking into account any benefits 
                received by such individual pursuant to any Federal 
                program (or any State or local program financed in 
                whole or in part with Federal funds) related to 
                retirement (including social security benefits), 
                disability, health care, cash aid, child care, food 
                assistance, housing and development, social services, 
                employment and training, or energy assistance.''.
            (2) Conforming amendments.--
                    (A) Section 32(c)(1)(A)(i) of such Code is amended 
                by striking ``qualifying child'' and inserting 
                ``qualifying dependent''.
                    (B) Section 32(c)(1)(B) of such Code is amended--
                            (i) by striking ``qualifying child'' and 
                        inserting ``qualifying dependent'', and
                            (ii) by striking ``child'' in the heading 
                        and inserting ``dependent''.
                    (C) Section 32(c)(1)(F) of such Code is amended--
                            (i) by striking ``qualifying children'' and 
                        inserting ``qualifying dependents'',
                            (ii) by striking ``qualifying child'' and 
                        inserting ``qualifying dependent'', and
                            (iii) by striking ``qualifying child'' in 
                        the heading and inserting ``qualifying 
                        dependent''.
                    (D) Section 32(c)(3)(D)(i) of such Code is amended 
                by striking ``qualifying child'' both places it appears 
                and inserting ``qualifying dependent''.
    (e) Modification of Percentages and Amounts.--
            (1) 100 percent credit percentage.--Paragraph (1) and 
        paragraph (2)(A) of section 32(a) of such Code are each amended 
        by striking ``the credit percentage of''.
            (2) 20 percent phaseout percentage.--Section 32(a)(2)(B) of 
        such Code is amended by striking ``the phaseout percentage'' 
        and inserting ``20 percent''.
            (3) Modification of earned income and phaseout amounts.--
        Section 32(b) of such Code is amended to read as follows:
    ``(b) Earned Income Amount; Phaseout Amount.--For purposes of this 
section--
            ``(1) Earned income amount.--The term `earned income 
        amount' means $4,000 (twice such amount in the case of a joint 
        return).
            ``(2) Phaseout amount.--The term `phaseout amount' means 
        $30,000 ($50,000 in the case of a joint return).
            ``(3) Inflation adjustment.--In the case of any taxable 
        year beginning after 2021, the $4,000 amount in paragraph (1) 
        and each dollar amount in paragraph (2) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `2020' for `2016' in subparagraph (A)(ii) thereof.
        If any increase under the preceding sentence is not a multiple 
        of $50, such increase shall be rounded to the next lowest 
        multiple of $50.''.
            (4) Conforming amendments.--
                    (A) Section 32(i) of such Code is amended by adding 
                at the end the following new paragraph:
            ``(3) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2020, the $2,200 amount in subsection 
                (i)(1) 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 `1995' for `2016' in 
                        subparagraph (A)(ii) thereof.
                    ``(B) Rounding.--If any increase under subparagraph 
                (A) is not a multiple of $50, such increase shall be 
                rounded to the next lowest multiple of $50.''.
                    (B) Section 32 of such Code is amended by striking 
                subsection (j).
    (f) Increased Credit for Certain Unmarried Individuals With 2 or 
More Qualifying Children.--
            (1) In general.--Section 32 of such Code is amended by 
        inserting after subsection (f) the following new subsection:
    ``(g) Increased Credit for Certain Unmarried Individuals With 2 or 
More Qualifying Children.--
            ``(1) In general.--In the case of a qualified individual, 
        the amount of the credit otherwise determined under subsection 
        (a) shall be increased by the amount of the credit determined 
        under this section as such section was in effect for taxable 
        years beginning in 2018 but with the modifications described in 
        paragraph (2).
            ``(2) Modifications.--Solely for purposes of determining 
        the increase under paragraph (1)--
                    ``(A) Credit percentage.--The credit percentage 
                shall be equal to--
                            ``(i) in the case of a qualified individual 
                        with 2 qualifying children, 12.5 percent, and
                            ``(ii) in the case of a qualified 
                        individual with 3 or more qualifying children, 
                        18.75 percent.
                    ``(B) Phaseout percentage.--The phaseout percentage 
                shall be equal to 5 percent.
                    ``(C) Application of inflation adjustment.--Section 
                32(j) as in effect for taxable years beginning in 2018 
                shall be applied by taking into account the taxable 
                year for which the increase under paragraph (1) is 
                determined.
            ``(3) Qualified individual.--For purposes of this 
        subsection, the term `qualified individual' means any 
        individual who--
                    ``(A) is not married (as determined under section 
                7703), and
                    ``(B) has 2 or more qualifying children.
            ``(4) Qualifying child.--For purposes of this subsection, 
        the term `qualifying child' means a child described in 
        subsection (c)(3)(A)(i) determined without regard to subclause 
        (I) thereof.''.
    (g) Advance Payment.--
            (1) In general.--Chapter 77 of such Code is amended by 
        adding at the end the following new section:

``SEC. 7531. ADVANCE PAYMENT OF EARNED INCOME CREDIT; EARNED INCOME 
              SAVINGS ACCOUNTS.

    ``(a) In General.--Not later than the date that is 2 years after 
the date of the enactment of this section, the Secretary shall 
establish a program for making direct advance monthly payments of the 
credit allowable under section 32 to taxpayers who elect to receive 
such payments.
    ``(b) Limitation.--The aggregate monthly payments made under 
subsection (a) with respect to any taxpayer for any taxable year shall 
not exceed 75 percent of the estimated amount of the credit allowable 
under section 32 to such taxpayer for such taxable year.
    ``(c) Election.--The election under subsection (a) may be made or 
changed for subsequent periods at any time during the taxable year. In 
the case of an election made after the beginning of a taxable year, the 
monthly advance payments shall be made for months beginning after the 
date that such election becomes effective and the total amount of 
advance payments (subject to the limitation of subsection (b)) shall be 
prorated among the remaining months.
    ``(d) Method of Payment.--The program established under subsection 
(a) shall include an option for taxpayers to elect to receive payments 
under such program by prepaid debit card.
    ``(e) Reports to Taxpayers.--
            ``(1) In general.--With respect to payments made under this 
        section for any calendar year, not later than January 31 of the 
        following calendar year, the Secretary shall issue a statement 
        to each individual with respect to whom payments were made 
        under this section setting forth--
                    ``(A) the name, address, and TIN of such person,
                    ``(B) the aggregate amount of payments made under 
                this section with respect to such person for such 
                calendar year,
                    ``(C) a statement that such individual is required 
                to file a return of tax with respect to taxable years 
                which include any portion of such calendar year 
                regardless of whether such individual has income tax 
                liability with respect to such taxable years, and
                    ``(D) such other information as the Secretary may 
                provide.
            ``(2) Election to receive statement through on-line 
        portal.--A taxpayer may elect to receive the statement 
        described in paragraph (1) through the on-line portal described 
        in subsection (f).
    ``(f) Recapture of Excess Payments.--If the aggregate payments made 
to any taxpayer under subsection (a) with respect to any taxable year 
exceed the credit allowable under section 32 (determined without regard 
to subsection (h) thereof) with respect to such taxpayer for such 
taxable year, the tax imposed by chapter 1 with respect to such 
taxpayer for such taxable year shall be increased by such excess.
    ``(g) Restriction on Allowance of Advance Payment if Excess 
Payments Not Repaid.--In the case of a taxpayer who fails to pay any 
tax liability which includes an increase determined under subsection 
(f) before the date on which payment of such tax is due, no payment 
shall be made under subsection (a) to such taxpayer during the period 
beginning on such date and ending with the end of the 2-year period 
which begins on the date that such tax liability (and any interest or 
penalties in connection with such liability) has been paid in full.''.
            (2) Coordination with credit.--Section 32 of such Code, as 
        amended by subsection (f), is amended by inserting after 
        subsection (g) the following new subsection:
    ``(h) Coordination With Advance Payment of Credit.--With respect to 
any taxable year, the amount which would (but for this subsection) be 
allowed as a credit to the taxpayer under this section shall be reduced 
(but not below zero) by the aggregate payments made under section 7531 
to such taxpayer for such taxable year.''.
            (3) One-on-one consultations.--The Secretary of the 
        Treasury (or the Secretary's delegate) shall ensure that in-
        person, telephonic, and virtual one-on-one consultations 
        between taxpayers and the Internal Revenue Service are 
        available to assist taxpayers at all times during regular 
        business hours (and, in the case of in-person consultations, at 
        all taxpayer assistance centers of the Internal Revenue 
        Service) in determining--
                    (A) their eligibility for the advance payment 
                program established under section 7531,
                    (B) the amount of the monthly payment for which the 
                taxpayer is eligible under such program,
                    (C) the circumstances or changes in circumstances 
                which, based on the particular characteristics of such 
                taxpayer, are most likely to result in excess payments 
                to such taxpayer which would be subject to recapture 
                under section 7531(f), and
                    (D) such other matters as such Secretary or 
                delegate determines appropriate.
            (4) On-line portal.--The Secretary of the Treasury (or the 
        Secretary's delegate) shall establish an on-line portal which 
        allows taxpayers to--
                    (A) elect to receive advance monthly payments under 
                section 7531, including determining the estimated 
                amount described in subsection (b) of such section and 
                determining the amount of such monthly payments,
                    (B) report changes in circumstances and modify the 
                amount of future advance monthly payments under such 
                section, and
                    (C) stop future advance monthly payments under such 
                section and pay back any advance monthly payments.
            (5) Clerical amendment.--The table of sections for chapter 
        77 of such Code is amended by adding at the end the following 
        new item:

``Sec. 7531. Advance payment of earned income credit; earned income 
                            savings accounts.''.
    (h) Outreach Pilot Program.--
            (1) In general.--Not later than 1 year after the date of 
        the enactment of this Act, the Secretary of the Treasury (or 
        the Secretary's designee) shall establish a program to educate 
        taxpayers regarding the availability of the earned income tax 
        credit and the advance monthly payments of such credit. 
        Pursuant to such program--
                    (A) EITC educational letters.--The Secretary (or 
                designee) shall provide a written notice describing the 
                earned income tax credit, the qualifications for 
                receiving such credit, and the program for the advance 
                payment of such credit to each taxpayer that the 
                Secretary (or designee) determines is likely to qualify 
                for such credit.
                    (B) District office workshops.--Each district 
                office of the Internal Revenue Service shall provide 
                workshops and seminars to assist and educate taxpayers 
                regarding the earned income tax credit and the program 
                to provide advance monthly payments of such credit.
                    (C) Quarterly reminders.--The Internal Revenue 
                Service shall provide written reminders each calendar 
                quarter to taxpayers participating in the program to 
                provide advance monthly payments of the earned income 
                tax credit that the amount of such payments are 
                determined on the basis of estimates based on 
                information previously provided by the taxpayer, that 
                the taxpayer is responsible for repaying any amounts 
                received that are in excess of the actual amount of the 
                earned income tax credit, and that the taxpayer should 
                review all the facts and circumstances that may affect 
                the amount of the earned income tax credit of the 
                taxpayer which the taxpayer is receiving in advance.
            (2) Termination.--The program established under paragraph 
        (1) shall terminate at the close of the 10-year period 
        beginning on the date that such program is established by the 
        Secretary (or designee).
            (3) Report on effectiveness of program.--On the date which 
        is 5 years after the establishment of the program under 
        paragraph (1), the Secretary shall submit to Congress a report 
        evaluating the effectiveness of the program, including a 
        detailed examination of the effectiveness of each of the 
        initiatives described in subparagraphs (A), (B), and (C) of 
        paragraph (1).
    (i) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2020.
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