,,ii #aafth ,,congress #ast ,session ,s4 #d ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #c1 #bjai,ms4 ,harris introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to establish a refundable tax credit to increase the take-home pay of ,american workers and enhance their financial stability1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,,lift 7,livable ,incomes for ,families ,today7 the ,middle ,class ,act4 #b4 ,establishment of middle class tax credit 7a7 ,in general ,subpart ,c of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #cf the following new section3 #cf;,a4 ,middle class tax credit 7a7 ,allowance of credit 7#a7 ,in general ,in the case of an eligible individual1 for any taxable year beginning after ,december #ca1 #bjah1 there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to so much of the taxpayer's earned income for the preceding taxable year as does not exceed #c1jjj4 7#b7 ,phaseout of credit ,the amount of the credit allowable to the taxpayer under paragraph 7#a7 for the taxable year shall be reduced 7but not below zero7 by an amount which bears the same ratio to the amount of the credit determined under such paragraph as-- 7,a7 the amount 7not less than zero7 equal to the adjusted gross income 7or1 if greater1 the earned income7 of the taxpayer for the preceding taxable year minus #cj1jjj1 bears to 7,b7 #bj1jjj4 7#c7 ,joint returns 7,a7 ,in general ,for purposes of determining the amount of the credit allowed under this section for any taxable year1 if a joint return was filed for the preceding taxable year by an eligible individual and such individual's spouse1 each of the dollar amounts under paragraphs 7#a7 and 7#b7 shall be doubled4 7,b7 ,married individuals ,for purposes of determining the amount of the credit allowed under this section for any taxable year1 if an individual was married during the preceding taxable year 7within the meaning of section #ggjc71 this section shall apply only if a joint return was filed for the preceding taxable year under section #fjac4 7#d7 ,head of household ,for purposes of determining the amount of the credit allowed under this section for any taxable year1 if a taxpayer filed a return as a head of household for the preceding taxable year1 the reduction of the credit allowable to the taxpayer under paragraph 7#a7 shall be determined under paragraph 7#b7 by substituting #fj1jjj for #cj1jjj in subparagraph 7,a7 thereof4 7#e7 ,inflation adjustments 7,a7 ,in general ,in the case of any taxable year after #bjai1 each of the dollar amounts under paragraphs 7#a71 7#b71 and 7#d7 shall be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjah for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,b7 ,rounding ,if any increase determined under subparagraph 7,a7 is not a multiple of #ej1 such increase shall be rounded to the nearest multiple of #ej4 7b7 ,definitions ,for purposes of determining the credit allowed under this section for any taxable year-- 7#a7 ,eligible individual 7,a7 ,in general ,the term eligible individual means an individual-- 7i7 who attained #ah years of age before the close of the preceding taxable year1 7ii7 whose principal place of abode was in the ,united ,states for more than one-half of the preceding taxable year1 7iii7 who was not a dependent for whom a deduction is allowable under section #aea to another taxpayer for any taxable year beginning in the same calendar year as the preceding taxable year1 and 7iv7 who did not claim the benefits of section #iaa for the preceding taxable year4 7,b7 ,limitation on eligibility of nonresident aliens ,the term eligible individual shall not include any individual who is a nonresident alien individual for any portion of the preceding taxable year1 unless such individual is treated for such taxable year as a resident of the ,united ,states for purposes of this chapter by reason of an election under subsection 7g7 or 7h7 of section #fjac4 7,c7 ,identification number requirement ,no credit shall be allowed under this section to an eligible individual who does not include on the return of tax for the taxable year-- 7i7 such individual's taxpayer identification number1 and 7ii7 if the individual was married during the preceding taxable year 7within the meaning of section #ggjc71 the taxpayer identification number of such individual's spouse4 7,d7 ,treatment of military personnel stationed outside of the ,united ,states ,for purposes of subparagraph 7,a77ii71 the principal place of abode of a member of the ,armed ,forces of the ,united ,states shall be treated as in the ,united ,states during any period during which such member is stationed outside the ,united ,states while serving on extended active duty with the ,armed ,forces of the ,united ,states4 ,for purposes of the preceding sentence1 the term extended active duty means any period of active duty pursuant to a call or order to such duty for a period in excess of #ij days or for an indefinite period4 7#b7 ,earned income ,the term earned income has the same meaning given such term under section #cb7;c77#b71 except that such term shall include any amounts received by the taxpayer as a ,federal ,pell ,grant under section #dja of the ,higher ,education ,act of #aife4 7c7 ,taxable year must be full taxable year ,except in the case of a taxable year closed by reason of the death of the taxpayer1 no credit shall be allowable under this section in the case of a taxable year covering a period of less than #ab months4 7d7 ,restrictions on taxpayer who improperly claimed credit in prior year ,rules similar to subsection 7k7 of section #cb shall apply for purposes of this section4 7e7 ,amount of credit ,to be determined under tables 7#a7 ,in general ,the amount of the credit allowed by this section shall be determined under tables prescribed by the ,secretary4 7#b7 ,requirements for tables ,the tables prescribed under paragraph 7#a7 shall reflect the provisions of subsection 7a7 and shall have income brackets of not greater than #ej each-- 7,a7 for earned income between #j and the amount of earned income at which the credit is phased out under subsection 7a77#b71 and 7,b7 for adjusted gross income between the dollar amount at which the phaseout begins under subsection 7a77#b7 and the amount of adjusted gross income at which the credit is phased out under such subsection4 7f7 ,reconciliation of credit and advance payments ,the amount of the credit allowed under this section for any taxable year shall be reduced 7but not below zero7 by the aggregate amount of any advance payments of such credit under section #gebg;,a for such taxable year4 4 7b7 ,advance payment of middle class tax credit 7#a7 ,in general ,chapter #gg of the ,internal ,revenue ,code of #aihf is amended by inserting after section #gebg the following new section3 #gebg;,a4 ,advance payment of middle class tax credit 7a7 ,in general ,not later than #f months after the date of the enactment of the ,,lift 7,livable ,incomes for ,families ,today7 the ,middle ,class ,act1 the ,secretary shall establish a program for making advance payments of the credit allowed under section #cf;,a on a monthly basis 7determined without regard to subsection 7f7 of such section7 to any taxpayer who-- 7#a7 the ,secretary has determined will be allowed such credit for the taxable year1 and 7#b7 has made an election under subsection 7c74 7b7 ,amount of advance payment 7#a7 ,in general ,for purposes of subsection 7a71 the amount of the monthly advance payment of the credit provided to a taxpayer during the applicable period shall be equal to the lesser of-- 7,a7 an amount equal to-- 7i7 the amount of the credit which the ,secretary has determined will be allowed to such taxpayer under section #cf;,a for the taxable year ending in such applicable period1 divided by 7ii7 #ab1 or 7,b7 such other amount as is elected by the taxpayer4 7#b7 ,applicable period ,for purposes of this section1 the term applicable period means the #ab-month period from the month of ,july of the taxable year through the month of ,june of the subsequent taxable year4 7c7 ,election of advance payment ,a taxpayer may elect to receive an advance payment of the credit allowed under section #cf;,a for any taxable year by including such election on a timely filed return for the preceding taxable year4 7d7 ,internal ,revenue ,service notification ,the ,internal ,revenue ,service shall take such steps as may be appropriate to ensure that taxpayers who are eligible to receive the credit under section #cf;,a are aware of the availability of the advance payment of such credit under this section4 7e7 ,authority ,the ,secretary may prescribe such regulations or other guidance as may be appropriate or necessary for the purposes of carrying out this section4 4 7c7 ,income disregard ,any credit or refund allowed or made to any individual by reason of section #cf;,a of the ,internal ,revenue ,code of #aihf 7as added by this section7 shall not be taken into account as income and shall not be taken into account as resources for purposes of determining the eligibility of such individual or any other individual for benefits or assistance1 or the amount or extent of benefits or assistance1 under any ,federal program or under any ,state or local program financed in whole or in part with ,federal funds4 7d7 ,conforming amendments 7#a7 ,section #fbaa7;b77#d77;,a7 of the ,internal ,revenue ,code of #aihf is amended by inserting #cf;,a1 after #cf14 7#b7 ,section #fbac7;g77#b7 of such ,code is amended-- 7,a7 in subparagraph 7,f71 by inserting or section #cf;,a after credit72 7,b7 in subparagraph 7,g71 by inserting or #cf;,a after section #cb2 7,c7 by striking subparagraph 7,k7 and inserting the following3 7,k7 an omission of information required by section #cb7k77#b7 or #cf7;e7 or an entry on the return claiming-- 7i7 the credit under section #cb for a taxable year for which the credit is disallowed under subsection 7k77#a7 thereof1 or 7ii7 the credit under section #cf;,a for a taxable year for which the credit is disallowed under subsection 7d7 thereof1 2 and 7,d7 in subparagraph 7,l71 by striking or #cb and inserting #cb1 or #cf;,a4 7#c7 ,the table of sections for subpart ,c of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #cf the following new item3 ,sec4 #cf;,a4 ,middle class tax credit4 4 7#d7 ,the table of sections for chapter #gg of such ,code is amended by inserting after the item relating to section #gebg the following3 ,sec4 #gebg;,a4 ,advance payment of middle class tax credit4 4 7e7 ,effective date ,the amendments made by this section shall apply to earned income received after ,december #ca1 #bjag4 #c4 ,return preparation programs for low-income taxpayers 7a7 ,in general ,chapter #gg of the ,internal ,revenue ,code of #aihf is amended by inserting after section #gebf the following new section3 #gebf;,a4 ,return preparation programs for low-income taxpayers 7a7 ,volunteer ,income ,tax ,assistance ,matching ,grant ,program 7#a7 ,establishment of ,program ,the ,secretary1 through the ,internal ,revenue ,service1 shall establish a ,community ,volunteer ,income ,tax ,assistance ,matching ,grant ,program 7hereinafter in this section referred to as the ,,vita grant program74 ,except as otherwise provided in this section1 the ,,vita grant program shall be administered in a manner which is substantially similar to the ,community ,volunteer ,income ,tax ,assistance matching grants demonstration program established under title ,i of division ,d of the ,consolidated ,appropriations ,act1 #bjjh4 7#b7 ,matching grants 7,a7 ,in general ,the ,secretary may1 subject to the availability of appropriated funds1 make available grants under the ,,vita grant program to provide matching funds for the development1 expansion1 or continuation of qualified return preparation programs assisting low-income taxpayers and members of underserved populations4 7,b7 ,application 7i7 ,in general ,subject to clause 7ii71 in order to be eligible for a grant under this section1 a qualified return preparation program shall submit an application to the ,secretary at such time1 in such manner1 and containing such information as the ,secretary may reasonably require4 7ii7 ,accuracy review ,in the case of any qualified return preparation program which was awarded a grant under this section and was subsequently subject to a field site visit by the ,internal ,revenue ,service 7including through the ,stakeholder ,partnerships1 ,education1 and ,communication office7 in which it was determined that the average accuracy rate for preparation of tax returns through such program was less than #ij percent1 such program shall not be eligible for any additional grants under this section unless such program provides1 as part of their application1 sufficient documentation regarding the corrective measures established by such program to address the deficiencies identified following the field site visit4 7,c7 ,priority ,in awarding grants under this section1 the ,secretary shall give priority to applications-- 7i7 demonstrating assistance to low-income taxpayers1 with emphasis on outreach to and services for such taxpayers1 7ii7 demonstrating taxpayer outreach and educational activities relating to eligibility and availability of income supports available through the ,internal ,revenue ,code of #aihf1 such as the earned income tax credit1 and 7iii7 demonstrating specific outreach and focus on one or more underserved populations4 7,d7 ,duration of grants ,upon application of a qualified return preparation program1 the ,secretary is authorized to award a multi-year grant not to exceed #c years4 7#c7 ,aggregate limitation ,unless otherwise provided by specific appropriation1 the ,secretary shall not allocate more than #cj1jjj1jjj per fiscal year 7exclusive of costs of administering the program7 to carry out the purposes of this section4 7b7 ,use of funds 7#a7 ,in general ,qualified return preparation programs receiving a grant under this section may use the grant for-- 7,a7 ordinary and necessary costs associated with program operation in accordance with ,cost ,principles ,circulars as set forth by the ,office of ,management and ,budget1 including-- 7i7 for wages or salaries of persons coordinating the activities of the program1 7ii7 to develop training materials1 conduct training1 and perform quality reviews of the returns for which assistance has been provided under the program1 and 7iii7 for equipment purchases and vehicle-related expenses associated with remote or rural tax preparation services1 7,b7 outreach and educational activities described in subsection 7a77#b77;,c77ii71 and 7,c7 services related to financial education and capability1 asset development1 and the establishment of savings accounts in connection with tax return preparation4 7#b7 ,use of grants for overhead expenses prohibited ,no grant made under this section may be used for overhead expenses that are not directly related to any qualified return preparation program4 7c7 ,promotion and referral 7#a7 ,promotion ,the ,secretary shall promote the benefits of1 and encourage the use of1 tax preparation through qualified return preparation programs through the use of mass communications1 referrals1 and other means4 7#b7 ,internal revenue service referrals ,the ,secretary may refer taxpayers to qualified return preparation programs receiving funding under this section4 7#c7 ,,vita grantee referral ,qualified return preparation programs receiving a grant under this section are encouraged to refer1 as appropriate1 to local or regional ,low ,income ,taxpayer ,clinics individuals who are eligible to receive services at such clinics4 7d7 ,definitions ,for purposes of this section-- 7#a7 ,qualified return preparation program ,the term qualified return preparation program means any program-- 7,a7 which provides assistance to individuals1 not less than #ij percent of whom are low-income taxpayers1 in preparing and filing ,federal income tax returns1 7,b7 which is administered by a qualified entity1 7,c7 in which all of the volunteers who assist in the preparation of ,federal income tax returns meet the training requirements prescribed by the ,secretary1 and 7,d7 which uses a quality review process which reviews #ajj percent of all returns4 7#b7 ,qualified entity 7,a7 ,in general ,the term qualified entity means any entity which-- 7i7 is an eligible organization 7as described in subparagraph 7,b771 7ii7 is in compliance with ,federal tax filing and payment requirements1 7iii7 is not debarred or suspended from ,federal contracts1 grants1 or cooperative agreements1 and 7iv7 agrees to provide documentation to substantiate any matching funds provided under the ,,vita grant program4 7,b7 ,eligible organization 7i7 ,in general ,subject to clause 7ii71 the term eligible organization means-- 7,i7 an institution of higher education which is described in section #ajb 7other than subsection 7a77#a77;,c7 thereof7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhh71 as in effect on the date of the enactment of this section1 and which has not been disqualified from participating in a program under title ,,iv of such ,act1 7,,ii7 an organization described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code1 7,,iii7 a local government agency1 including-- 7aa7 a county or municipal government agency1 and 7bb7 an ,indian tribe1 as defined in section #d7ac7 of the ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif 7#be ,u4,s4,c4 #dajc7ac771 including any tribally designated housing entity 7as defined in section #d7bb7 of such ,act 7#be ,u4,s4,c4 #dajc7bb7771 tribal subsidiary1 subdivision1 or other wholly owned tribal entity1 or 7,,iv7 a local1 ,state1 regional1 or national coalition 7with one lead organization which meets the eligibility requirements of subclause 7,i71 7,,ii71 or 7,,iii7 acting as the applicant organization74 7ii7 ,alternative eligible organization ,if no eligible organization described in clause 7i7 is available to assist the targeted population or community1 the term eligible organization shall include-- 7,i7 a ,state government agency1 and 7,,ii7 a ,cooperative ,extension ,service office4 7#c7 ,low-income taxpayers ,the term low-income taxpayer means a taxpayer who has income for the taxable year which does not exceed an amount equal to the completed phaseout amount under section #cb7;b7 for a married couple filing a joint return with three or more qualifying children1 as determined in a revenue procedure or other published guidance4 7#d7 ,underserved population ,the term underserved population includes populations of persons with disabilities1 persons with limited ,english proficiency1 ,native ,americans1 individuals living in rural areas1 members of the ,armed ,forces and their spouses1 and the elderly4 4 7b7 ,clerical amendment ,the table of sections for chapter #gg of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #gebf the following new item3 #gebf;,a4 ,return preparation programs for low-income taxpayers4 4 #d4 ,sense of the ,senate ,it is the sense of the ,senate that the costs of carrying out this ,act and the amendments made by this ,act should be fully offset through-- 7#a7 the repeal of ,public ,law #aae-ig1 with the exception of any provisions or amendments under such ,public ,law that provide relief to taxpayers with less than #ajj1jjj in annual income2 and 7#b7 a fee1 in such amount as is determined appropriate by the ,secretary of the ,treasury for purposes of offsetting the costs of carrying out this ,act and the amendments made by this ,act1 to be assessed on any financial institution that has total consolidated assets of more than #ej1jjj1jjj1jjj4