Title: Tax Fairness for Disabled Workers Act
Policy area: Taxation

Summary:
Tax Fairness for Disabled Workers Act
This bill amends the Internal Revenue Code to prohibit certain lump-sum payments of Social Security Disability Insurance (SSDI) benefits from being included as income to determine if a taxpayer meets the income requirements for the premium assistance tax credit. The bill applies to lump-sum SSDI payments that are: (1) received during the taxable year, and (2) attributable to prior taxable years.
(The premium assistance tax credit is provided to eligible individuals and families to subsidize the purchase of health insurance plans on an exchange established under the Patient Protection and Affordable Care Act.)

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3326 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3326

To amend the Internal Revenue Code of 1986 to ensure proper allocation 
       of lump-sum payments of disability insurance benefits for 
 determinations of modified adjusted gross income under the refundable 
         tax credit for coverage under a qualified health plan.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 1, 2018

  Mr. King (for himself and Mr. Rubio) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to ensure proper allocation 
       of lump-sum payments of disability insurance benefits for 
 determinations of modified adjusted gross income under the refundable 
         tax credit for coverage under a qualified health plan.

    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 Fairness for Disabled Workers 
Act''.

SEC. 2. ALLOCATION OF LUMP-SUM PAYMENTS OF SOCIAL SECURITY BENEFITS FOR 
              DETERMINATIONS OF MODIFIED ADJUSTED GROSS INCOME UNDER 
              THE REFUNDABLE TAX CREDIT FOR COVERAGE UNDER A QUALIFIED 
              HEALTH PLAN.

    (a) In General.--Section 36B(d)(2) of the Internal Revenue Code of 
1986 is amended by inserting at the end the following new subparagraph:
                    ``(C) Exclusion of certain amounts received as 
                lump-sum payment.--For purposes of subparagraph (B), 
                such amount shall not include any portion of a lump-sum 
                payment of disability insurance benefits under section 
                223 of the Social Security Act (42 U.S.C. 423) which 
                is--
                            ``(i) received during the taxable year, and
                            ``(ii) attributable to prior taxable 
                        years.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2018.
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