Sen. Hawley Announces Amendment Fix for Phase 3 Legislation To Provide Direct Relief to All Individuals & Families From Middle Class Down

Friday, March 20, 2020

Today U.S. Senator Josh Hawley (R-Mo.) introduced an amendment to the Senate’s phase three coronavirus economic package to ensure that low-income families, including those without federal tax liabilities, are not excluded from receiving the direct relief they need during the coronavirus pandemic. Senator Hawley’s amendment would guarantee that low-income individuals and families get the full benefit. In the current draft of the legislation, the direct cash assistance for families penalizes lower income families. The bill “phases in” benefits only after recipients reach a minimum income threshold. Low-income Americans should not receive less relief than middle-income Americans.

Senator Hawley introduced a proposal earlier this week to deliver direct relief to working families on a need-basis, and has since expressed his concern that the proposed payments to working Americans in bill three do not go far enough.

Official text of his amendment as filed today can be found here:

Strike subsection (a) of Section 2101 and replace with 

     (a) In General.—Subchapter B of chapter 65 of subtitle F of the Internal Revenue Code of 1986 is amended by inserting after section 6427 the following new section:

“SEC. 6428. 2020 RECOVERY REBATES FOR INDIVIDUALS.

     “(a) In General.—In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2020 an amount equal to $1,200 ($2,400 in the case of a joint return).

     “(b) Special Rules.—

          “(1) Child benefit.—In the case of a taxpayer described in paragraph (2), the amount determined under subsection (a) shall be increased by the product of $500 multiplied by the number of qualifying children (within the meaning of section 24(c)) of the taxpayer.

          “(2) Taxpayer described.—A taxpayer is described in this paragraph if the taxpayer—

               “(A) is a resident of the United States of America, and

              “(B) has a valid Social Security number or Individual Taxpayer Identification Number.

     “(c) Treatment of Credit.—The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1.

     “(d) Limitation Based on Adjusted Gross Income.—The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer’s adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return).

     “(e) Eligible Individual.—The term ‘eligible individual’ means any individual other than—

          “(1) any nonresident alien individual,

          “(2) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, and

          “(3) an estate or trust.

     “(f) Coordination With Advance Refunds of Credit.—

          “(1) In general.—The amount of credit which would (but for this paragraph) be allowable under this section shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer under subsection (g). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).

          “(2) Joint returns.—In the case of a refund or credit made or allowed under subsection (g) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return.

     “(g) Advance Refunds and Credits.—

          “(1) In general.—Subject to paragraph (5), each individual who was an eligible individual for such individual’s first taxable year beginning in 2018 shall be treated as having made a payment against the tax imposed by chapter 1 for such first taxable year in an amount equal to the advance refund amount for such taxable year.

          “(2) Advance refund amount.—For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such first taxable year if this section (other than subsection (f) and this subsection) had applied to such taxable year.

          “(3) Timing of payments.—The Secretary shall, subject to the provisions of this title, refund or credit any overpayment attributable to this section as rapidly as possible. No refund or credit shall be made or allowed under this subsection after December 31, 2020.

          “(4) No interest.—No interest shall be allowed on any overpayment attributable to this section.

          “(5) Alternate taxable year.—In the case of an individual who, at the time of any determination made pursuant to paragraph (3), has not filed a tax return for the year described in paragraph (1), the Secretary may apply such paragraph by substituting ‘2019’ for ‘2018’.

     “(h) Identification Number Requirement.—

          “(1) In general.—No credit shall be allowed under subsection (a) to an eligible individual who does not include on the return of tax for the taxable year—

               “(A) such individual’s valid identification number,

               “(B) in the case of a joint return, the valid identification number of such individual’s spouse, and

               “(C) in the case of any qualifying child taken into account under subsection (b)(1)(B), the valid identification number of such qualifying child.

          “(2) Valid identification number.—

               “(A) In general.—For purposes of paragraph (1), the term ‘valid identification number’ means a social security number (as such term is defined in section 24(h)(7)).

               “(B) Adoption taxpayer identification number.—For purposes of paragraph (1)(C), in the case of a qualifying child who is adopted, the term ‘valid identification number’ shall include the adoption taxpayer identification number of such child.

     “(i) Regulations.—The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section.”.

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