Title: To amend the Internal Revenue Code of 1986 to treat certain first responder survivors benefits as earned income for purposes of the kiddie tax.
Policy area: Taxation

Summary:
This bill treats certain first responder survivors benefits received by children as earned income of the child for the purposes of the kiddie tax (the tax on the unearned income of children). This has the effect of exempting the benefits from such tax. The bill applies to taxable years beginning after December 31, 2017.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2840 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 2840

   To amend the Internal Revenue Code of 1986 to treat certain first 
   responder survivors benefits as earned income for purposes of the 
                              kiddie tax.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 20, 2019

  Mr. Beyer 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 treat certain first 
   responder survivors benefits as earned income for purposes of the 
                              kiddie tax.

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

SECTION 1. CERTAIN FIRST RESPONDER SURVIVORS BENEFITS TREATED AS EARNED 
              INCOME FOR KIDDIE TAX.

    (a) In General.--Section 1(g)(4)(C) of the Internal Revenue Code of 
1986 is amended to read as follows:
                    ``(C) Treatment of certain amounts as earned 
                income.--For purposes of this subsection, each of 
                following amounts shall be treated as earned income of 
                the child referred to in paragraph (1) to the extent 
                included in the gross income of such child:
                            ``(i) Distributions from qualified 
                        disability trusts.--Any amount included in the 
                        gross income of such child under section 652 or 
                        662 by reason of being a beneficiary of a 
                        qualified disability trust (as defined in 
                        section 642(b)(2)(C)(ii)).
                            ``(ii) Certain first responder survivors 
                        benefits.--Any payment made by Federal, State, 
                        or local government to such child if such 
                        payment is made by reason of the death of the 
                        parent of such child during such parent's 
                        service as a law enforcement officer, 
                        firefighter, paramedic, or emergency medical 
                        technician.''.
    (b) Application to Alternative Minimum Tax.--Section 59(j)(1)(A) of 
such Code is amended by inserting ``and including amounts treated as 
earned income under section 1(g)(4)(C)'' after ``section 911(d)(2)''.
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2017.
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