118th CONGRESS 2d Session |
To amend the Fair Labor Standards Act of 1938 and the Internal Revenue Code of 1986 to make certain modifications in relation to the minimum wage.
September 27, 2024
Ms. Lee of Pennsylvania (for herself, Ms. Lee of California, Mr. Jackson of Illinois, Ms. Tlaib, Ms. Bush, Ms. Schakowsky, Ms. McCollum, Mrs. Ramirez, and Mr. Huffman) introduced the following bill; which was referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, and Oversight and Accountability, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
To amend the Fair Labor Standards Act of 1938 and the Internal Revenue Code of 1986 to make certain modifications in relation to the minimum wage.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
(a) Short title.—This Act may be cited as the “American Stability Act”.
(b) Table of contents.—The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 101. Minimum wage increases.
Sec. 102. Tipped employees.
Sec. 103. Scheduled repeal of separate minimum wage for newly hired employees who are less than 20 years old.
Sec. 104. Publication of notice.
Sec. 105. Promoting economic self-sufficiency for individuals with disabilities.
Sec. 201. Modification of income tax brackets based on annualized stability wage.
Sec. 202. Surcharge on high income individuals, estates, and trusts.
Sec. 203. Alternative maximum tax for low-income individuals.
Sec. 301. Earned income disallowance.
Sec. 401. Effective date.
(a) In general.—Section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:
“(1) except as otherwise provided in this section, not less than—
“(A) $15.00 an hour for the first calendar year beginning after the date of enactment of the American Stability Act;
“(B) for each calendar year during the interval period (as defined in subsection (g)), a minimum wage equal to the amount determined under this paragraph for the preceding year, increased by the lesser of—
“(i) 10 percent; or
“(ii) the amount necessary for the minimum wage to equal the stability wage for such calendar year; and
“(C) for each calendar year that begins after the interval period, the stability wage for such calendar year.”.
(b) Stability wage.—Section 6 of such Act (29 U.S.C. 206) is further amended by adding at the end the following:
“(A) DETERMINATION.—The stability wage determined under this paragraph for a calendar year shall be an amount equal to the greater of—
“(i) the average hourly earnings wage determined under paragraph (2) for that calendar year;
“(ii) the cost-of-living wage determined under paragraph (3) for that calendar year; or
“(iii) the stability wage in effect for the preceding year.
“(B) ROUNDING.—If the amount determined under subparagraph (A) is not a multiple of 5 cents, such amount shall be rounded to the next higher multiple of 5 cents.
“(2) AVERAGE HOURLY EARNINGS WAGE.—The average hourly earnings wage for any calendar year shall be an amount equal to $20.00, multiplied by the ratio of—
“(A) the average hourly earnings for the year preceding such calendar year, to
“(B) the average hourly earnings for the year preceding the calendar year of the date of enactment of the American Stability Act.
“(3) COST-OF-LIVING WAGE.—The cost-of-living wage for any calendar year shall be an amount equal to $20.00, multiplied by the ratio of—
“(A) the CPI–U for the year preceding such calendar year, to
“(B) the CPI–U for the year preceding the calendar year of the date of enactment of the American Stability Act.
“(4) DEFINITIONS.—For the purposes of this paragraph and subsection (a)(1):
“(A) CPI–U.—The term ‘CPI–U’ means, when used with respect to a calendar year, the Consumer Price Index for all urban consumers, as published by the Bureau of Labor Statistics, for September of such year.
“(B) AVERAGE HOURLY EARNINGS.—The term ‘average hourly earnings’ means, when used with respect to a calendar year, the total private average hourly earnings from the data on average hourly and weekly earnings of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted, as published by the Bureau of Labor Statistics, for September of such year.
“(C) INTERVAL PERIOD.—The term ‘interval period’ means the period—
“(i) beginning on the first day of the 1st calendar year beginning after the date of enactment of the American Stability Act; and
“(ii) ending at the close of the last day of the first calendar year for which the minimum wage under subsection (a)(1) equals the stability wage determined under paragraph (1) of this subsection for such calendar year.”.
(a) Base minimum wage for tipped employees and tips retained by employees.—
(1) IN GENERAL.—Section 3(m)(2)(A) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) shall be amended to read as follows:
“(A) The wage required to be paid to a tipped employee shall be the wage set forth in section 6(a)(1). Any employee shall have the right to retain any tips received by such employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips. An employer shall inform each employee of the right and exception provided under the preceding sentence.”.
(2) EFFECTIVE DATE.—The amendment made by subsection (a) shall take effect on January 1 of the first calendar year that begins after the date of enactment of this Act.
(b) Penalties.—Section 16 of the Fair Labor Standards Act of 1938 (29 U.S.C. 216) is amended—
(1) in the third sentence of subsection (b), by inserting “or used” after “kept”; and
(2) in the second sentence of subsection (e)(2), by inserting “or used” after “kept”.
(a) In general.—Section 6(g) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(g)), as amended by subsection (a), shall be repealed.
(b) Effective date.—The repeal made by subsection (a) shall take effect on January 1 of the first calendar year that begins after the date of enactment of this Act.
Section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206), as amended by section 2(b), is further amended by adding at the end the following:
“(i) Publication of wage rates.—Not later than 60 days prior to the effective date of any increase in the required wage determined under subsection (a)(1), the Secretary shall publish in the Federal Register and on the website of the Department of Labor a notice announcing each increase in such required wage.
“(j) Transition assistance.—Upon request, the Secretary shall provide—
“(1) technical assistance and information to employers for the purposes of—
“(A) assisting such employers to comply with subsection (a), as amended by the American Stability Act; and
“(B) ensuring continuing employment opportunities for individuals with disabilities who received a special minimum wage rate under this section 14(c) (as in effect on the day before the date of enactment of the American Stability Act); and
“(2) information to individuals who were employed at a special minimum wage rate under section 14(c) (as in effect on the day before the date of enactment of the American Stability Act), which may include referrals to Federal or State entities with expertise in competitive integrated employment.”.
(a) Transition to fair wages for individuals with disabilities.—
(1) IN GENERAL.—Subparagraph (A) of section 14(c)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)(1)) shall be amended to read as follows:
“(A) at a rate that equals or exceeds, for each year, the wage set forth in section 6(a)(1).”.
(2) EFFECTIVE DATE.—The amendment made by paragraph (A) shall take effect on January 1 of the first calendar year that begins after the date of enactment of this Act.
(b) Prohibition on new special certificates.—
(1) IN GENERAL.—Section 14(c) of the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)) is amended by adding at the end the following:
“(6) Prohibition on new special certificates.—Notwithstanding paragraph (1), the Secretary shall not issue a special certificate under this subsection to an employer that was not issued a special certificate under this subsection before the date of enactment of the American Stability Act.”.
(2) SUNSET.—Section 14(c) of the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)), as amended by paragraph (2), is further amended by adding at the end the following:
“(7) Sunset.—On January 1 of the first calendar year that begins after the date of enactment of the American Stability Act, the authority to issue special certificates under paragraph (1) shall expire, and no special certificates issued under paragraph (1) shall have any legal effect .”.
(3) EFFECTIVE DATE.—The amendments made by this paragraph shall take effect on the date of enactment of this Act.
(a) In general.—Section 1 of the Internal Revenue Code of 1986 is amended by striking subsections (a), (b), (c), (d), and (e) and inserting the following new subsections:
“(a) In general.—There is hereby imposed on the taxable income of every individual, every estate, and every trust a tax determined under this section.
“(b) Amount of tax.—The tax determined under this section shall be equal to—
“(1) in the case of any taxpayer whose taxable income does not exceed the maximum bracket amount for the lowest tax bracket for the taxpayer’s filing status, the product of the percentage which constitutes such lowest tax bracket multiplied by such taxable income, and
“(2) in the case of any taxpayer whose taxable income exceeds the maximum bracket amount for such lowest tax bracket, the sum of—
“(A) the maximum tax amount for each tax bracket for the taxpayer’s filing status with respect to which the taxpayer’s taxable income exceeds the maximum bracket amount for such tax bracket, plus
“(i) the percentage which constitutes the tax bracket for the taxpayer’s filing status which is next above the highest bracket amount for which an amount is included under subparagraph (A), multiplied by
“(ii) so much of the taxable income of the taxpayer as exceeds the maximum bracket amount of such highest tax bracket.
“(c) Determination of maximum bracket amounts.—
“(1) MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES.—In the case of every married individual (as defined in section 7703) who makes a single return jointly with the individual’s spouse under section 6013, and every surviving spouse—
“(A) the maximum bracket amount for the 10 percent bracket is the product of 0.56 multiplied by the annualized stability wage for the taxable year,
“(B) the maximum bracket amount for the 12 percent bracket is the product of 2.28 multiplied by the annualized stability wage for the taxable year,
“(C) the maximum bracket amount for the 22 percent bracket is the product of 4.8 multiplied by the annualized stability wage for the taxable year,
“(D) the maximum bracket amount for the 24 percent bracket is the product of 9.2 multiplied by the annualized stability wage for the taxable year,
“(E) the maximum bracket amount for the 32 percent bracket is the product of 11.6 multiplied by the annualized stability wage for the taxable year,
“(F) the maximum bracket amount for the 35 percent bracket is the product of 17.6 multiplied by the annualized stability wage for the taxable year, and
“(G) the maximum bracket amount for the 37 percent bracket is infinite.
“(2) HEADS OF HOUSEHOLDS.—In the case of every head of household—
“(A) the maximum bracket amount for the 10 percent bracket is the product of 0.42 multiplied by the annualized stability wage for the taxable year,
“(B) the maximum bracket amount for the 12 percent bracket is the product of 1.52 multiplied by the annualized stability wage for the taxable year,
“(C) the maximum bracket amount for the 22 percent bracket is the product of 2.4 multiplied by the annualized stability wage for the taxable year,
“(D) the maximum bracket amount for the 24 percent bracket is the product of 4.6 multiplied by the annualized stability wage for the taxable year,
“(E) the maximum bracket amount for the 32 percent bracket is the product of 5.8 multiplied by the annualized stability wage for the taxable year,
“(F) the maximum bracket amount for the 35 percent bracket is the product of 14.6 multiplied by the annualized stability wage for the taxable year, and
“(G) the maximum bracket amount for the 37 percent bracket is infinite.
“(3) UNMARRIED INDIVIDUALS (OTHER THAN SURVIVING SPOUSES AND HEADS OF HOUSEHOLDS).—In the case of every individual (other than a surviving spouse or a head of household) who is not a married individual (as defined in section 7703)—
“(A) the maximum bracket amount for the 10 percent bracket is the product of 0.28 multiplied by the annualized stability wage for the taxable year,
“(B) the maximum bracket amount for the 12 percent bracket is the product of 1.14 multiplied by the annualized stability wage for the taxable year,
“(C) the maximum bracket amount for the 22 percent bracket is the product of 2.4 multiplied by the annualized stability wage for the taxable year,
“(D) the maximum bracket amount for the 24 percent bracket is the product of 4.6 multiplied by the annualized stability wage for the taxable year,
“(E) the maximum bracket amount for the 32 percent bracket is the product of 5.8 multiplied by the annualized stability wage for the taxable year,
“(F) the maximum bracket amount for the 35 percent bracket is the product of 14.6 multiplied by the annualized stability wage for the taxable year, and
“(G) the maximum bracket amount for the 37 percent bracket is infinite.
“(4) MARRIED INDIVIDUALS FILING SEPARATE RETURNS.—In the case of every married individual (as defined in section 7703) who does not make a single return jointly with the individual’s spouse under section 6013—
“(A) the maximum bracket amount for the 10 percent bracket is the product of 0.28 multiplied by the annualized stability wage for the taxable year,
“(B) the maximum bracket amount for the 12 percent bracket is the product of 1.14 multiplied by the annualized stability wage for the taxable year,
“(C) the maximum bracket amount for the 22 percent bracket is the product of 2.4 multiplied by the annualized stability wage for the taxable year,
“(D) the maximum bracket amount for the 24 percent bracket is the product of 4.6 multiplied by the annualized stability wage for the taxable year,
“(E) the maximum bracket amount for the 32 percent bracket is the product of 5.8 multiplied by the annualized stability wage for the taxable year,
“(F) the maximum bracket amount for the 35 percent bracket is the product of 8.8 multiplied by the annualized stability wage for the taxable year, and
“(G) the maximum bracket amount for the 37 percent bracket is infinite.
“(5) ESTATES AND TRUSTS.—In the case of every estate and every trust for the taxable year—
“(A) the maximum bracket amount for the 10 percent bracket is the product of 0.08 multiplied by the annualized stability wage for the taxable year,
“(B) the maximum bracket amount for the 24 percent bracket is the product of 0.27 multiplied by the annualized stability wage for the taxable year,
“(C) the maximum bracket amount for the 35 percent bracket is the product of 0.37 multiplied by the annualized stability wage for the taxable year, and
“(D) the maximum bracket amount for the 37 percent bracket is infinite.
“(d) Definitions.—For purposes of this section—
“(1) ANNUALIZED STABILITY WAGE.—The term ‘annualized stability wage’ means, with respect to any taxable year, the product of 2,080 multiplied by the stability wage (as defined in section 6 of the Fair Labor Standards Act of 1938) for the calendar year in which or with which such taxable year begins.
“(A) IN GENERAL.—The term ‘maximum tax amount’ means, with respect to any tax bracket, the product of—
“(i) the percentage which constitutes such tax bracket, multiplied by
“(I) the maximum bracket amount for such tax bracket, over
“(II) the highest maximum bracket amount for the taxpayer’s filing status which is less than the maximum bracket amount referred to in subclause (I).
“(B) SPECIAL RULE FOR LOWEST TAX BRACKET.—For purposes of determining the maximum tax amount with respect to the lowest tax bracket for a taxpayer’s filing status, the amount specified in subparagraph (A)(ii)(II) shall be treated as being zero.
“(3) FILING STATUS.—The term ‘filing status’ means, with respect to any taxpayer, the status of such taxpayer as being described in paragraph (1), (2), (3), (4), or (5) of subsection (c).
“(4) TAX BRACKETS.—The term ‘tax bracket’ means, with respect to the filing status of any taxpayer, each bracket for which a maximum bracket amount is determined for such filing status.”.
(1) Section 1(f) of such Code is amended by striking all that precedes paragraph (3) and inserting the following:
“(f) Publication of tax tables; retention of cost-of-Living adjustment for other provisions.—
“(1) PUBLICATION OF TAX TABLES.—Not later than December 15 of 2024, and each subsequent calendar year, the Secretary shall publish tax tables which state the dollar amounts in effect under subsections (b) and (c) with respect to taxable years beginning in the succeeding calendar year.”.
(2) Section 1(f)(3) of such Code is amended by striking “For purposes of this subsection” and inserting “For purposes of any provision of law which refers to this subsection”.
(3) Section 1(f) of such Code is amended by striking paragraphs (7) and (8) and inserting the following new paragraph:
“(7) Rounding.—If any increase determined under section 63(c)(4), section 68(b)(2), or section 151(d)(4) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.”.
(4) Section 1 of such Code is amended by striking subsections (i) and (j).
(c) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
(a) In general.—Part I of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 1 the following new section:
“(a) General rule.—In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to the sum of—
“(1) 3 percent of so much of the modified adjusted gross income of the taxpayer as exceeds—
“(A) the product of 25 multiplied by the annualized stability wage for the taxable year, in the case of any taxpayer not described in subparagraph (B) or (C),
“(B) the product of 12.5 multiplied by the annualized stability wage for the taxable year, in the case of a married individual filing a separate return, and
“(C) the product of 4.8 multiplied by the annualized stability wage for the taxable year, in the case of an estate or trust, plus
“(2) 5 percent of so much of the modified adjusted gross income of the taxpayer as exceeds—
“(A) the product of 365 multiplied by the annualized stability wage for the taxable year, in the case of any taxpayer not described in subparagraph (B) or (C),
“(B) the product of 182.5 multiplied by the annualized stability wage for the taxable year, in the case of a married individual filing a separate return, and
“(C) the product of 12 multiplied by the annualized stability wage for the taxable year, in the case of an estate or trust.
“(b) Modified adjusted gross income.—For purposes of this section, the term ‘modified adjusted gross income’ means adjusted gross income reduced by any deduction (not taken into account in determining adjusted gross income) allowed for investment interest (as defined in section 163(d)) or business interest (as defined in section 163(j)). In the case of an estate or trust, adjusted gross income shall be determined as provided in section 67(e), and reduced by the amount allowed as a deduction under section 642(c).
“(c) Annualized stability wage.—For purposes of this section, the term ‘annualized stability wage’ has the meaning given such term in section 1(d)(1).
“(1) NONRESIDENT ALIEN.—In the case of a nonresident alien individual (other than an individual described in section 876(a) or 877(a)), only amounts taken into account in connection with the tax imposed under section 871(b) shall be taken into account under this section.
“(2) CITIZENS AND RESIDENTS LIVING ABROAD.—Each dollar amount which is applicable to any taxpayer under subsection (a) shall be decreased (but not below zero) by the excess (if any) of—
“(A) the amounts excluded from the taxpayer’s gross income under section 911, over
“(B) the amounts of any deductions or exclusions disallowed under section 911(d)(6) with respect to the amounts described in subparagraph (A).
“(3) CHARITABLE TRUSTS.—Subsection (a) shall not apply to a trust all the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B).
“(4) NOT TREATED AS TAX IMPOSED BY THIS CHAPTER FOR CERTAIN PURPOSES.—The tax imposed under this section shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter (other than sections 27 and 901) or for purposes of section 55.
“(5) ELECTING SMALL BUSINESS TRUSTS.—For purposes of the determination of adjusted gross income, section 641(c)(1)(A) shall not apply and all portions of any electing small business trust shall be treated as a single trust.
“(e) Regulations.—The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations or other guidance to prevent the avoidance of the purposes of this section.”.
(b) Coordination with certain provisions.—
(1) INTEREST ON CERTAIN DEFERRED TAX LIABILITY.—Section 453A(c) of such Code is amended by redesignating paragraph (6) as paragraph (7) and by inserting after paragraph (5) the following new paragraph:
“(6) SURCHARGE ON HIGH INCOME INDIVIDUALS TAKEN INTO ACCOUNT IN DETERMINING MAXIMUM RATE OF TAX.—For purposes of paragraph (3)(B), the maximum rate of tax in effect under section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs (1) and (2) of section 1A(a).”.
(2) ALIEN RESIDENTS OF PUERTO RICO, GUAM, AMERICAN SAMOA, OR THE NORTHERN MARIANA ISLANDS.—Section 876(a) of such Code is amended by striking section 1 and inserting “sections 1 and 1A”.
(3) EXPATRIATION TO AVOID TAX.—Section 877(b) of such Code is amended by inserting “and section 1A” after “section 1 or 55”.
(4) LIMITATION ON FOREIGN TAX CREDIT.—
(A) Section 904(b)(3)(E)(i)(I) of such Code is amended by inserting “increased by the sum of the rates set forth in paragraphs (1) and (2) of section 1A(a)” after “(whichever applies)”.
(B) Section 904(d)(2)(F) of such Code is amended by adding at the end the following: “For purposes of the first sentence of this subparagraph, the highest rate of tax specified in section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs (1) and (2) of section 1A(a).”.
(5) ELECTION BY INDIVIDUALS TO BE SUBJECT TO TAX AT CORPORATE RATES.—Section 962(a)(1) of such Code is amended by inserting “, 1A,” after “sections 1”.
(6) INTEREST ON CERTAIN TAX DEFERRAL.—Section 1291(c)(2) of such Code is amended by adding at the end the following: “For purposes of the preceding sentence, the highest rate of tax in effect under section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs (1) and (2) of section 1A(a).”.
(7) AVERAGING OF FARM INCOME.—Section 1301(a) of such Code is amended by striking “section 1” both places it appears and inserting “sections 1 and 1A”.
(8) TITLE 11 CASES.—Section 1398(c)(2) of such Code is amended by inserting “and tax shall be imposed under section 1A by treating the estate as a married individual filing a separate return” before the period at the end.
(9) WITHHOLDING OF TAX ON FOREIGN PARTNERS’ SHARE OF EFFECTIVELY CONNECTED INCOME.—Section 1446(b)(2) of such Code is amended by adding at the end the following flush sentence:
“For purposes of subparagraph (A), the highest rate of tax in effect under section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs (1) and (2) of section 1A(a).”.
(10) RELIEF FROM JOINT AND SEVERAL LIABILITY ON JOINT RETURN.—Section 6015(d)(2)(B) of such Code is amended by inserting “, 1A,” after “section 1”.
(11) PARTNERSHIP ADJUSTMENTS.—
(A) Section 6225(b)(1) of such Code is amended by adding at the end the following flush sentence:
“For purposes of subparagraph (B), the highest rate of tax in effect under section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs (1) and (2) of section 1A(a).”.
(B) Section 6225(c)(4)(A) of such Code is amended—
(i) by striking “subsection (b)(1)(A)” and inserting “subsection (b)(1)(B)”, and
(ii) by striking “or” at the end of clause (i), by adding “or” at the end of clause (ii), and by inserting after clause (ii) the following new clause:
“(iii) is not an individual subject to one or both of the rates of tax in effect under paragraphs (1) and (2) of section 1A(a),”.
(12) REQUIRED PAYMENTS FOR ENTITIES ELECTING NOT TO HAVE REQUIRED TAXABLE YEAR.—Section 7519(b) of such Code is amended by inserting “and increased by the sum of the rates in effect under paragraphs (1) and (2) of section 1A(a)” before the period at the end.
(c) Clerical amendment.—The table of sections for part I of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 1 the following new item:
“Sec. 1A. Surcharge on high income individuals.”.
(d) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
(a) In general.—Part I of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by section 202, is amended by inserting after section 1A the following new section:
“(a) In general.—In the case of an qualified low-income individual, the tax imposed under section 1 for any taxable year shall not exceed 24.4 percent of the excess of—
“(1) the taxpayer’s modified adjusted gross income for such taxable year, over
“(2) the cost-of-living exemption for such taxable year.
“(b) Qualified low-Income individual.—For purposes of this section, the term ‘qualified low-income individual’ means, with respect to any taxable year, any individual (other than an estate or trust) if the taxpayers modified adjusted gross income for such taxable year is less than 200 percent of the cost-of-living exemption for such taxable year.
“(c) Cost-of-Living exemption.—For purposes of this section—
“(1) IN GENERAL.—The term ‘cost-of-living exemption’ means, with respect to any taxable year—
“(A) in the case of a taxpayer not described in subparagraph (B) or (C), 100 percent of annualized cost-of-living wage,
“(B) in the case of a joint return, 200 percent of the annualized cost-of-living wage, and
“(C) in the case of a head of household, 140 percent of the annualized cost-of-living wage.
“(2) ANNUALIZED COST-OF-LIVING WAGE.—The term ‘annualized cost-of-living wage’ means, with respect to any taxable year, the product of 2,080 multiplied by the cost-of-living wage (as defined in section 6 of the Fair Labor Standards Act of 1938) for the calendar year in which or with which such taxable year begins.
“(d) Modified adjusted gross income.—For purposes of this section, the term ‘modified adjusted gross income’ means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.”.
(b) Clerical amendment.—The table of sections for part I of subchapter A of chapter 1 of such Code, as amended by section 202, is amended by inserting after the item relating to section 1A the following new item:
“Sec. 1B. Alternative maximum tax for low-income individuals.”.
(c) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
(a) In general.—Notwithstanding any other provision of law, for purposes of determining the eligibility of a specified individual for benefits or assistance (or the amount or extent of benefits or assistance) under any means-tested Federal program, or under any means-tested State or local program financed in whole or in part with Federal funds—
(1) with respect to the 1-year period beginning on the effective date described in section 401, if the earned income of such individual for such 1-year period (determined without regard to this section) does not exceed the product of 2,080 multiplied by the cost-of-living wage (as defined in section 6 of the Fair Labor Standards Act of 1938) for the calendar year in which such 1-year period ends, the earned income of such individual shall not be treated as exceeding the earned income of such individual for the 1-year period ending on such effective date, and
(2) with respect to the 1-year period beginning 1 year after such effective date, if the earned income of such individual for such 1-year period (determined without regard to this section) does not exceed the product of 2,080 multiplied by the cost-of-living wage (as defined in section 6 of the Fair Labor Standards Act of 1938) for the calendar year in which such 1-year period ends, the earned income of such individual shall not be treated as exceeding the sum of—
(A) the earned income of such individual for the 1-year period ending on such effective date, plus
(B) 50 percent of the excess (if any) of—
(i) the earned income of such individual for the 1-year period beginning 1 year after such effective date, over
(ii) the earned income of such individual for the 1-year period ending on such effective date.
(b) Specified individual.—For purposes of this section, the “specified individual” means any individual if the earned income of such individual for the 1-year period ending on the effective date described in section 410 exceeds zero.
Except as otherwise specified in this Act, this Act, and the amendments made by this Act, shall take effect on the 1st day of the 3rd month that begins after the date of enactment of this Act.