Title: Tax Equity and Prosperity for Puerto Rican Families Act of 2017
Policy area: Taxation

Summary:
Tax Equity and Prosperity for Puerto Rican Families Act of 2017
This bill amends the Internal Revenue Code to make citizens of Puerto Rico eligible for the federal earned income tax credit and allow them to claim the refundable portion of the child tax credit on the same basis as U.S. taxpayers. In making the earned income tax credit applicable to Puerto Rican citizens, the bill modifies credit requirements to allow taxpayers in Puerto Rico to claim the credit at age 21 (rather than age 25) and to allow a credit percentage of 40, without regard to the number of qualifying children claimed by the taxpayer.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4060 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 4060

To amend the Internal Revenue Code of 1986 to make residents of Puerto 
   Rico eligible for the earned income tax credit and to provide for 
 equitable treatment for residents of Puerto Rico with respect to the 
              refundable portion of the child tax credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 12, 2017

Mr. Pascrell (for himself, Mr. Crowley, Mr. Larson of Connecticut, Mr. 
 Serrano, Ms. Jackson Lee, Ms. Velazquez, Ms. Sanchez, Mr. Gonzalez of 
  Texas, Mr. Blumenauer, Mr. Pallone, Ms. DeLauro, Mr. Higgins of New 
   York, and Mr. Gutierrez) 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 make residents of Puerto 
   Rico eligible for the earned income tax credit and to provide for 
 equitable treatment for residents of Puerto Rico with respect to the 
              refundable portion of the child 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 ``Tax Equity and Prosperity for Puerto 
Rican Families Act of 2017''.

SEC. 2. PUERTO RICO RESIDENTS ELIGIBLE FOR EARNED INCOME TAX CREDIT.

    (a) In General.--Section 32 of the Internal Revenue Code of 1986 
(relating to earned income) is amended by adding at the end the 
following new subsection:
    ``(n) Residents of Puerto Rico.--
            ``(1) In general.--In the case of residents of Puerto 
        Rico--
                    ``(A) the United States shall be treated as 
                including Puerto Rico for purposes of subsections 
                (c)(1)(A)(ii)(I) and (c)(3)(C),
                    ``(B) subsection (c)(1)(D) shall not apply to 
                nonresident alien individuals who are residents of 
                Puerto Rico,
                    ``(C) adjusted gross income and gross income shall 
                be computed without regard to section 933 for purposes 
                of subsections (a)(2)(B) and (c)(2)(A)(i),
                    ``(D) subsection (c)(1)(A)(ii)(II) shall be applied 
                by substituting `age 21' for `age 25', and
                    ``(E) notwithstanding subsection (b)--
                            ``(i) the credit percentage is 40,
                            ``(ii) the phaseout percentage is 21.06,
                            ``(iii) the earned income amount is $8,890, 
                        and
                            ``(iv) the phaseout amount is $11,610 
                        (increased by $3,000 in the case of a joint 
                        return).
            ``(2) Inflation adjustment.--Subsection (j) shall apply to 
        the dollar amounts in subparagraph (D), determined by treating 
        the $8,890 and $11,610 amounts as though such amounts were 
        contained in subsection (b)(2)(A) and by treating the $3,000 
        amount as though such amount were contained in subsection 
        (b)(2)(B)(iii).''.
    (b) Child Tax Credit Not Reduced.--Subclause (II) of section 
24(d)(1)(B)(ii) of such Code (relating to child tax credit) is amended 
by inserting before the period ``(determined without regard to section 
32(n) in the case of residents of Puerto Rico)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

SEC. 3. EQUITABLE TREATMENT FOR RESIDENTS OF PUERTO RICO WITH RESPECT 
              TO THE REFUNDABLE PORTION OF THE CHILD TAX CREDIT.

    (a) In General.--Section 24(d)(1) of the Internal Revenue Code of 
1986 is amended by inserting ``or section 933'' after ``section 112''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2016.
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