To amend the Internal Revenue Code of 1986 to treat certain scholarships and fellowship grants as earned income for purposes of the kiddie tax.

Bill: 116-hr-2806
Sponsor: full_name: Rep. Horsford, Steven [D-NV-4]
Introduced: 2019-05-16
Policy area: Taxation
Subjects: Disability and paralysis

Income tax rates

Student aid and college costs

Tax treatment of families
Latest action: action_date: 2019-05-16
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2019-05-16
action_desc: Introduced in House
text: <p>This bill treats certain scholarship or fellowship grants 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 grants from such tax. The bill applies to taxable years beginning after December 31, 2017.</p>

tv_txt: I 116th CONGRESS 1st Session H. R. 2806 IN THE HOUSE OF REPRESENTATIVES May 16, 2019 Mr. Horsford 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 scholarships and fellowship grants as earned income for purposes of the kiddie tax.

1. Certain scholarships and fellowship grants 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 scholarships or fellowship grants Any scholarship or fellowship grant which is received by such child if— (I) such child is a candidate for a degree at an educational organization described in section 170(b)(1)(A)(ii), and (II) such scholarship or grant supports such candidacy. . (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.