OAMCEMCGITCET. sm! [file 1 of 5] SLO. AMENDMENT NO. Calendar No. Purpose: To provide a perfecting amendment. IN THE SENATE OF THE UNITED STATES—115th Cong, Ist Sess. H.R.1 To provide for reconcili of the concurrent year 2018. ion pursnant to titles IT and V solution on the budget for fiseal Referred to the Committee on and ordered to be printed Ordered to lie on the table and to be printed intended tobe proposed by to the amendment (No.____) proposed by ke all after the first word and insert the following:ONOTNOTTITSS4.xnt file 2 of 51 SLU 1 TITLE I 2. SEC. 11000. SHORT TITLE, ETC. 3 (a) Snort TITLE.—This title may be cited as the 4 “Tax Cuts and Jobs Act” 5 (b) AMENDMENT OF 1986 CopE.—Exeept as other- wise expressly provided, whenever in this title an amend- ment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference Cw a shall be considered to be made to a ction or other provi- 10 sion of the Internal Revenue Code of 1986. 11 Subtitle A—Individual Tax Reform 12 PART I—TAX RATE REFORM 13. SEC. 11001. MODIFICATION OF RATES. 14 (a) IN GENERAL.—Section 1 is amended by adding 15 at the end the following new subsection: 16 “Gj) Mopirications POR TAXABLE YEARS 2018 17 TuRoven 2025. — 18 “(1) IX GENERAE.—In the case of a taxable 19 year beginning after December 31, 2017, and before 20 © January 1, 2026— 21 “(A) subsection (i) shall not apply, 22 “(B) this section (other than subsection 23 (i)) shall be applied as provided in paragraphs 24 (2) through (7). 25 (2) RATE TABLEONOTNOTTITRS4 xm file 2 of 5] SLC. 3 1 “(A) MARRIED INDIVIDUALS FILING JOINT 2 RETURNS AND SURVIVING SPOUSES.—The fol- 3 lowing table shall be applied in liew of the table 4 contained in subsection (a): “tf taxable income is ‘The tax is: Not over $19,050 107 of taxable income (Over $19,050 but not over 877,400 of the exes over Over $7,400 bt nt ovr $140,000 ts 229% of the excess over ‘Over $140,000 Int not over $820,000... $22,679, plus 249% of the exeess ‘over $140,000. ‘Over $820,000 but not over $400,000 .... $85,879, plus 329% of the excess cover $820,000. ‘Over $400,000 but not over $1,000,000... $91,479, plus 35 cover $400,000, Over $1,000,000 $301,479, plus 38.5% of the exoess ‘er $1,000,000. 1% of the exeess 5 “(B) HEADS OF HOUSEHOLDS.—The fol- 6 lowing table shall be applied in lieu of the table 7 contained in subseetion (bh) “If taxable income i ‘The tax is: Nat over $13,600 10 of taxable income ‘Over $13,600 bat not over $51,800 $1,360, plus 125¢ of the exeess over 813,600, ‘Over $51,800 but not over $70,000 $5,944, plus 22% of the exeess ove $51,800, Over $70,000 bat not over $160,000 $9,948, plus 2476 of the exeess over 70,000, Over $160,000 bt not wer $200,000 ... $31,548, ps 32% oF the exeess over $160,000. ‘Over $200,000 bt not over $500,000... $14,348, plus 359% of the excess ‘over $200,000. Over $500,000 $149,348, plus 38.59% of the excess 0,000. 8 “(C) UNMARRIED INDIVIDUALS OTHER 9 THAN SURVIVING SPOUSES AND HEADS OF 10 HOUSEHOLDS.—The following table shall be ap-OAOTMOTIITAS4.xml [file 2 of 5) SLE auew 4 plied in tien of the table contained in subsection (o: “If taxable income is: The tax is: Not over $0 106 of taxable income ‘Over $9,525 hat not aver 838,700 ius 1246 of the excess Over $38,700 but not over $70,000 nn. $4198.50, ps B25 of the excess over $38,700 Over $70,000 but not over $160,000... $11,999.50, pus 2456 of the excess over $70,000 Over $160,000 but not over $200,000 .... $3,999.50, ps 2256 of the excens avr $160,000 Over $200,000 but not over $500,000... $45,739.50, ps 3596 of the excess over $200,000 ‘Over 500,000 $150,739.50, pls 38.59 of the exe cess over $500,000, “(D) MARRIED INDIVIDUALS FILING SEPA- RATE RETURNS. —The following table shall be applied in lieu of the table contained in sub- section (4) “If taxable income is: The tax is: Not ovr $9 10% of taxable income (Over 89,525 but not over 828,700 $952.50, pls 12% of the excess over $9 Over $98,700 bat not over $70,000 ann $4458.50, plus 22% of the excess over $38,700 Over $70,000 but not over $160,000 .... $11,299.50, ps 247 of the exes aver $70,000 ‘Over $160,000 but not over $200,000 39.50, ple 327 of the excess cer $160,000. ‘ver $20,000 tnt not over $500,000 ... $45,730.50, pins 359 of the excns ‘over $200,000. ver $500,000 $150,739.50, plus 38.5% of the ex cess over $500,000, “(B) ESTATES AND ‘TRUSTS—The fol- lowing table shall be applied in liew of the table contained in subsection (e):OAOTMOTTITHG4 sul [fle 2 of 5] SLC Sear aH ae wH ll 13, 14 15 16 17 18 19 20 5 “If taxable income ‘The tax is: Not over $2,550 10% of taxable ineome Over $2,550 but not over $9,150 $255, plus 249 of the exeess over $2,550. Over $9,150 but not over $12,500 $1,889, plus 359% of the exoess over Over $12,500 0, plus 38.5% of the ex: eas over $12,500, “(P) REFERENCES TO RATE TABI Any reference in this title to a rate of tax under subsection (c) shall be treated as a reference to the corresponding rate bracket under subpara- graph (C) of this paragraph, except that the reference in section 3402(q)(1) to the third low- est rate of tax applicable under subsection (c) shall be treated as a reference to the fourth lowest rate of tax under subparagraph (C) “(3) ADJUSTMENTS.— “(A) No ADJUSTMENT IN 2018—The ta- bles contained in paragraph (2) shall apply without adjustment for taxable years beginning after December 31, 2017, and before January 1, 2019, “(B) SUBSEQUENT YEARS —For taxable years beginning after December 31, 2018, the Secretary. shall prescribe tables. which shall apply in liew of the tables contained in para- graph (2) in the same manner as under para-OMOTMOTTITAS. xml [fle 2 of 5] SLC Cea AnA wD 10 i = 13 14 15 16 7 18 19 20 21 22 a 24 6 graphs (1) and (2) of subsection (f), except that in prescribing such tables— “(i) subsection (f)(3) shall be applied by substituting ‘calendar year 2017" for ‘ealendar year 2016" in subparagraph (A)(ii) thereof, “Gi)_ subsection (f)(7)(B) shall apply to any unmarried individual other than a surviving spouse or head of household, and (iii) subsection (f)(8) shall not apply. “(4) SPECIAL RULES FOR CERTAIN CHILDREN WITH UD PARNED INCOMB- “(A) IN GENERAL—In the case of a child to whom subsection (g) applies for the taxable year, the rules of subparagraphs (B) and (C) shall apply in lica of the rule under s (e)(1). “(B) MODIFICATIONS TO APPLICABLE RATE BRACKETS —In determining the amount ion for the taxable of tax imposed by this se ye on a child described in subparagraph (A), the income tax table otherwise applicable under this subsection to the child shall be applied with the following modONOPMOTTITSS4 01 Sear annawn u 13 14 15 16 17 18 19 20 21 2 23 4 25 file 2 of 5} She 7 “(i) 24-PERCENT — BRACKET.—The maximum taxable income which is taxed at a rate below 24 percent shall not be more than the earned taxable income of such child. “(i) 35-PERCENT — BRACKET—The maximum taxable income which is taxed at a rate below 35 percent shall not be more than the sum of— “(1) the earned taxable income of such child, plus “(I) the minimum. taxable come for the 35-percent bracket in the table under paragraph (2)(E) (as ad- justed under paragraph (3)) for the taxable year. “(iii) 38.5-PERCENT BRACKET—The maximum taxable income which is taxed at a rate below 38.5 percent shall not be more than the sum of— “(1) the earned taxable income of h child, plus “(I) the minimum taxable in- come for the 38.5-pereent bracket in the table under paragraph (2)(E) (asONOTMOPTI78S4.xm! [fle 2 of 5] SLO. Cm ra aAnerun 10 i 12 13 14 15 16 17 18 19 20 21 2 23 24 25 8 adjusted under paragraph (3)) for the taxable year. “(C) COORDINATION WITH CAPITAL GAINS RATES. For purposes of applying nm 1(h) (after the modifications under paragraph (5))— “(i) the maximum zero rate amount. shall not be more than the sum of— “(1) the earned taxable income of such child, plus “(I1) the amount in effect under paragraph (5)(B)(i)(IV) for the tax- able year, and “(i) the maximum 15-pereent rate amount shall not be more than the sum of “(I) the earned taxable income of such child, plus “(ID the amount in effect under paragraph (5)(B)(ii)(IV) for the tax- able year. “(D) EARNED TAXABLE INCOME.—For purposes of this paragraph, the term ‘earned taxable income’ means, with respect to any child for any taxable year, the taxable income of such child reduced (but not below zero) by:ONOTMOTTITAF4 xm! [file 2 of 5} SLE Cor ana wn 10 u 12 1B 14 15 16 17 18 19 20 21 22 23 24 the net unearned income (as defined in section (y)(4)) of such child. “(5) APPLICATION OF CURRENT INCOME TAX BRACKETS TO CAPITAL GAINS BRACKETS.— “(A) IN GENERAL—Section 1(h)(1) shall be applied— “(i) by substituting ‘below the max- imum zero rate amount’ for ‘which would (without regard to this paragraph) be taxed at a rate below 25 percent’ in. sub- paragraph (B)(i), and “(ii) by substituting ‘below the max- imum 15-pereent. rate amount’ for ‘which would (without, regard to this paragraph) be taxed at a rate below 39.6 percent’ in subparagraph (C)(i)(1). “(B) MAXIMUM AMOUNTS DEFINED.—For purposes of applying section 1(h) with the modifications described in subparagraph (A)— “@) 0 Maximum = ZERO RATE AMOUNT.—The — maximum — zero rate amount shall be— “(D) in the ¢ of a joint return or surviving spouse, $77,200,OAOTTOTTITSI4 sul [file 2 of 5] SLE Cor aAHneon 10 u 12 13 14 15 16 7 18 19 20 21 22 23 24 25 10 “(I1) in the ease of an individual who is a head of household (as de- fined in section 2(b)), $51,700, “(IH) in the case of any other ine dividual (other than an estate or trust), an amount equal to % of the amount in effect for the taxable ) under subelause (1), and “(LV) in the case of an estate or trust, $2,600, “Gi) MAXIMUM 15-PBRCENT RATE AMOUNT.—The maximum 15-percent rate amount shall be— “(Din the case of a joint return or surviving spouse, $479,000 (4 such amount in the case of a married individual filing a separate return), “(ID) in the ease of an individual who is the head of a houschold (as de- fined in section 2(b)), $452,400, “(ITD in the ease of any other in- dividual (other than an estate or trust), $425,800, and “(IV) in the case of an estate or trust, $12,700.OAOTTOTTITAR.xml [fle 2 of 5] SLE Cords H eon 10 i 12 13 14 15 16 7 18 19 20 21 2 23 24 25 uM “(©) INPLaTION apsestMENT—In_ the case of any taxable year beginning after 2018, each of the dollar amounts in clauses (i) and (ii) of subparagraph (B) shall be inereased by an amount equal to— “(j) such dollar amount, multiplied by ment de- “Gi) the cost-of-living adj termined under subsection (f)(3) for the calendar year in which the taxable year be- gins, determined by substituting ‘calendar year 2017" foi ‘alendar year 2016" in sub- paragraph (A)(ii) thereof, (6) SECTION 15 NOT TO APPLY. ion 15 shall not apply to any change in a rate of tax by rea- son of this subsection.”. (b) Due DiuiceNce Tax PREPARER REQUIREMENT Wirn Respect 70 Heap oF HovseHoLD FILING Sra- n is amended to read —Subseetion (g) of section 66! as follows “(g) Patnvre To Be DILIGENT IN DETERMININ Eu HIBILITY FOR CERTAIN TAX BENBFITS.—Any person votur who is a tax return preparer with respect to any or claim for refund who fails to comply with due diligence requirements imposed by the Seerctary by regulations with respect to determining—ONOTMOTTITAS4 xml [fle 2 of 5] SLC 12 u “(1) eligibility to file as a head of houschold (as 2 defined in section 2(b)) on the return, or 3 “(2) eligibility for, or the amount of, the credit 4 allowable by section 24, 25A(a)(1), or 32, 5 shall pay a penalty of $500 for each such failure.” 6 (ec) EFFECTIVE DaTE.—The amendments made by 7 this section shall apply to taxable years beginning after 8 December 31, 2017. 9 SEC. 11002. INFLATION ADJUSTMENTS BASED ON CHAINED 10 cPL ll (a) IN GENERAL.—Subscetion (f) of section 1 is 12. amended by striking paragraph (3) and by inserting after 13. paragraph (2) the following new paragraph: 14 (3) Cosr-or-Livixe apsustMEN’.—For pur 15 ss of this subsection — 16 “(A) IN GENERAL—The cost-of-living ad- 17 justment for any calendar year is the percent- 18 age (if any) by whieh— 19 “()) the C-CPI-U for the preceding 20 calendar year, exceeds 21 “Gi) the CPI for calendar year 2016, 22 multiplied by the amount determined 2B under subparagraph (B).OMOTMOTTITSAA snl [fi en Scwmrxaanue ry ve) 14 15 16 17 18 19 20 21 22 23 24 = SL 13 “(B) AMOUNT DETERMINED.—The amount determined under this clause is the amount obtained by dividing— “(i) the C-CPI-U for ¢ alendar year 2016, by “Gi) the CPI for calendar year 2016. “(C) SPECIAL RULE FOR ADJUSTMENTS WITH A BASE YEAR APTER 2016.—For purposes of any provision of this title which provides tor vear after 2016 for ‘2016 the substitution of a in subparagraph (A)(ii), subparagraph (A) shall be applied by substituting ‘the C-CPI-U for cal- endar year 2016” for ‘the CPI for calendar 20167 and all that follows in clause (ii) there- of” (b) C-CPI-U—Subsection (f) of section 1 is amended by striking paragraph (7), by redesignating paragraph (6) as paragraph (7), and by inserting after paragraph (5) the following new paragraph: “(6) C-CPI-U.—For purposes of this sub- seetion— “(A) IN GENERAL.—The term ‘C-CPI-U’ means the Chained Consumer Price Index for All Urban Consumers (as published by the Bu- reau of Labor Statisties of the Department ofO\OTMOTTITSS4.xm file 2 of 5) SLO. See ino. 2 1 u 12 13 14 15 16 17 14 Labor). The values of the Chained Consumer Price Index for All Urban Consumers taken into account for purposes of determining the cost-of-living adjustment for any calendar ear under this subsection shall be the latest values so published as of the date on which such Bu- ea publishes the initial value of the Chained Consumer Price Index for All Urban Con- sumers for the month of August for the pre- ceding calendar year. “(B) DETERMINATION FOR CALENDAR YEAR—The C-CPI-U for any calendar year is the average of the C-CPI-U as of the close of the 12-month period ending on August 31 of such ealendar year.” (c) APPLICATION TO PERMANENT TAX TABLES. Section 1(f)(2)(A) is amended by inserting “, determined 18 by substituting ‘1992” for 2016" in paragraph (3)(A)(ii)” 19 20 21 ee! ee 24 25 CODE OF 1986 PROVISIONS. (d) Avvlicarion TO Orner INTERNAL REVENUE (1) The following seetions are each amended by striking “for ‘calendar year 1992" in. subparagraph (B)” and inserting “for ‘calendar year 2016” in sub- paragraph (A)(ii)": (A) Section 2(B) Paragraphs (1)(A)(ii) and (2)(A)(ii) of ACh). sect (C) Seetion 25B(b)(3)(B). (D) Subsection (b)(2)(B)(ii)(I, and clauses (i) and (ii) of subsection (j)(1)(B), of section 3 (B) Section 36B(f)(2)(B)(i)(ID). (F) Section 41(e)(5)(C)(i). (G) Subs (h)(3)(H)()(11) of section 42. ons (e)(3)(D)(ii),— and (IH) S m 45R(d)(3)(B) (ii). (a)(4)(A) ii). (J) Seetion 62(d)(3)(B) (K) Section 63(¢)(4)(B) (I) Seetion 5 (L) Seetion 125(i)(2)(B). (M) Section 135(b)(2)(B) (ii). (N) Section 137(f)(2). (O) Section 146(d)(2)(B). (P) Section 147(¢)(2)() (ii). (Q) Section 151(d)(4)(B). (R) Seetion 179(b)(6)(A) (ii). (S) Subsections — (b)(5)(C)(I)(IT)_— and (g)(8)(B) of section 219. (T) Seetion 220(2)(2). (U) Seetion 221(f)(1)(B).OAOTMOTTITAI.sul [fle 2 16 (V) Scetion 223(2)(1)(B). (W) Section 408A(¢)(3)(D)Gi). (X) Section 430(e)(7)(D)(vii) (UD). (Y) Section 512(d)(2)(B). (Z) Section 513(h)(2)(C)(ii). (AA) Scetion 831(b)(2)(D) (ii). (BB) Section 877A(a)(3)(B)()(I) (CC) Section 2010(e)(3)(B) ii) (DD) Section 2032A(a)(3)(B). 03(b)(2)(B). ion 4261(0)(4)(A)(ii) (EE) Section 2 (FF) Se (GG) Section 5000A(c)(3)(D) (ii). (IIH) S on 6323(i)(4)(B) (ID) Section 6334(z)(1)(B). (JJ) Seetion 6601(j)(3)(B) (KK) Section 6651(i)(1). (LL) Section 6652(¢)(7)(A). (MM) Section 6695()(1). (NN) Section 6698(¢)(1). (00) Section 66: (e)(1). (na). (QQ) Section 6722(6)(1). (PP) Seetion (RR) Section 73: (F)(2). (SS) Seetion 7430(¢)(1). (TT) Section 9831(d)(2)(D)(ii) (ID.OAOTMOTTITHS 400! [fle 2 of 5] SLC Cera He wn 10 ll 12 13 14 15 16 17 18 19 20 21 ee! ee 17 (2) Sections 41(e)(5)(C)(ii) and 68(b)(2)(B) are each amended— (A) by striking 1(£)(3)(B)” and inserting *1((8)(A)Gi)”, and (B) by striking “19 and inserting “2016” (3) Section 42(h)(6)(G) is amended— (A) by striking “for ‘calendar year 1987"” in clause (i)(II) and inserting “for ‘calendar year 2016” in subparagraph (A)(ii) thereof”, and (B) by striking “if the CPT for any cal endar year” and all that follows in clause (ii) and iserting “if the C-CPI-U for any calendar year (as defined in section 1(f)(6)) ds the C-CPI-U for the preceding calendar year by more than 5 percent, the C-CPI-U for the base calendar year shall be increased such that sueh excess shall never be taken into account under clause (i). In the case of a base calendar year before 2017, the C-CPI-U for sueh ear shall be determined by multiplying the CPI for such year by the amount determined under section 1(£(3)(B).”.