Tax Equity for Children and the Working Poor Act of 2006

Tax Equity for Children and the Working Poor Act of 2006 - Repeals provisions of the Working Families Tax Relief Act of 2004 and the Gulf Opportunity Zone Act of 2005 relating the the uniform definition of child.

Amends the Internal Revenue Code to revise eligibility rules for dependent children for purposes of the tax exemption for dependents, the child tax credit, and the earned income tax credit.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5123 Introduced in House (IH)]







109th CONGRESS
  2d Session
                                H. R. 5123

  To amend the Internal Revenue Code of 1986 to simplify and provide 
greater uniformity for child-related tax benefits and to eliminate the 
 potential for abuse created by the uniform definition of child in the 
                Working Families Tax Relief Act of 2004.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 6, 2006

    Mr. Doggett (for himself, Mr. Rangel, Mr. Stark, Mr. Levin, Mr. 
   McDermott, Mr. Lewis of Georgia, Mr. McNulty, Mr. Jefferson, Mr. 
 Becerra, Mr. Pomeroy, Mrs. Jones of Ohio, Mr. Thompson of California, 
  Mr. Larson of Connecticut, Mr. Emanuel, Mr. Allen, Mr. Conyers, Mr. 
Grijalva, Mr. Hinchey, Ms. Eddie Bernice Johnson of Texas, Mr. Sherman, 
Ms. Slaughter, and Ms. Solis) 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 simplify and provide 
greater uniformity for child-related tax benefits and to eliminate the 
 potential for abuse created by the uniform definition of child in the 
                Working Families Tax Relief Act of 2004.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Equity for Children and the 
Working Poor Act of 2006''.

SEC. 2. REPEAL OF UNIFORM DEFINITION OF CHILD.

    (a) In General.--Title II of the Working Families Tax Relief Act of 
2004 (relating to uniform definition of child), and the amendments made 
by such title, and section 404 of the Gulf Opportunity Zone Act of 
2005, and the amendments made by such section, are hereby repealed.
    (b) Administration of Internal Revenue Code of 1986.--The Internal 
Revenue Code of 1986 shall be applied and administered as if the 
provisions, and amendments, specified in subsection (a) had never been 
enacted.
    (c) Conforming Amendment.--Section 1361(c)(1)(C) of such Code is 
amended by striking ``any eligible foster child of an individual 
(within the meaning of section 152(f)(1)(C))'' and inserting ``any 
foster child (as defined in section 152(b)(2)) of an individual''.
    (d) Effective Date.--This section shall apply to taxable years 
beginning after December 31, 2006.

SEC. 3. SIMPLIFICATION OF AND UNIFORM RULES FOR CHILD-RELATED TAX 
              BENEFITS.

    (a) Waiver of Income Test for All Young Dependents.--Subparagraph 
(B) of section 151(c)(1) of the Internal Revenue Code of 1986 (relating 
to general rule for additional exemption for dependents), as amended by 
section 2 of this Act, is amended by striking ``who is a child of the 
taxpayer and''.
    (b) Child Credit.--Paragraph (1) of section 24(c) of such Code 
(defining qualifying child), as amended by section 2 of this Act, is 
amended to read as follows:
            ``(1) Qualifying child.--The term `qualifying child' means 
        any individual if--
                    ``(A) the taxpayer is allowed a deduction under 
                section 151 with respect to such individual for the 
                taxable year, and
                    ``(B) such individual has not attained the age of 
                17 as of the close of the calendar year in which the 
                taxable year of the taxpayer begins.''.
    (c) Earned Income Credit.--Clause (i) of section 32(c)(3)(B) of 
such Code (relating to general rule defining relationship test), as 
amended by section 2 of this Act, is amended by adding at the end the 
following flush sentence: ``An individual shall be treated as bearing a 
relationship to the taxpayer described in the preceding sentence if the 
taxpayer is entitled to a deduction under section 151(c) for such 
individual.''.
    (d) Conforming Amendments.--
            (1) Section 151(c) of such Code, as amended by section 2 of 
        this Act, is amended by striking paragraph (3).
            (2) Section 152(b)(2) of such Code, as amended by section 2 
        of this Act, is amended--
                    (A) by striking ``(if such child satisfies the 
                requirements of subsection (a)(9) with respect to such 
                individual)'', and
                    (B) by adding at the end the following new 
                sentence: ``For purposes of the preceding sentence, the 
                term `foster child' means an individual who is placed 
                with the taxpayer by an authorized placement agency or 
                by judgment, decree, or other order of any court of 
                competent jurisdiction.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.
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