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[DOCID: f:h508ih.txt]






107th CONGRESS
  1st Session
                                H. R. 508

   To amend the Internal Revenue Code of 1986 to allow individuals a 
            refundable credit based on their earned income.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 7, 2001

  Mr. LaFalce (for himself, Mr. Gutierrez, Mr. Sandlin, Mr. Gonzalez, 
  Mrs. Jones of Ohio, and Mr. Capuano) 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 allow individuals a 
            refundable credit based on their earned income.

    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 ``Worker's Income Tax Credit Act of 
2001''.

SEC. 2. REFUNDABLE CREDIT FOR INDIVIDUALS BASED ON EARNED INCOME.

    (a) General Rule.--Subpart C of part IV of subchapter A of chapter 
1 of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. WORKER CREDIT.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for the taxable year the amount equal to 6.2 percent of the sum of--
            ``(1) the individual's wages, salaries, tips, and other 
        employee compensation includible in gross income, plus
            ``(2) the individual's earned income (as defined in section 
        401(c)(2)).
    ``(b) Limitation.--The amount allowed as a credit under subsection 
(a) to an individual for any taxable year shall not exceed $350.''
    (b) Conforming Amendments.--
            (1) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``or from section 35 of such Code,'' after 
        ``1978,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the last item and inserting the 
        following new items:

                              ``Sec. 35. Worker credit.
                              ``Sec. 36. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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