H.R. 6057 - Tax Simplification for Americans Abroad Act

117TH CONGRESS
1ST SESSION

H.R. 6057

To create a short form tax return to simplify the return process for certain taxpayers living abroad, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

Mr. BEYER introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To create a short form tax return to simplify the return process for certain taxpayers living abroad, and for other purposes.

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 Simplification for Americans Abroad Act".

SEC. 2. SHORT FORM FOR CERTAIN TAXPAYERS LIVING ABROAD.

(a) IN GENERAL. — The Secretary of the Treasury (or the Secretary's delegate) shall make available a form for use by specified individuals to file the return of tax imposed by chapter 1 of the Internal Revenue Code of 1986.

Such form shall replace Forms 1040, 2555, 1116, 5471, 3520, 708, and other forms for disclosing income, deductions and offsets, and shall be as similar to Form 1040-EZ as it existed in 2017, except that the form shall allow an individual to, with respect to a taxable year —

(1) demonstrate that such individual is a nonresident for purposes of the substantial presence test under section 7701(b)(3) of such Code,

(2) declare foreign income described in section 911,

(3) characterize income based on source, including —

(A) wages,

(B) contract income,

(C) foreign government benefits,

(D) pension and other retirement income,

(E) scholarships and fellowship grants,

(F) interest, and

(G) dividends, and

(H) capital gains,

(4) claim the standard deduction and, if applicable, the child tax credit and earned income tax credit,

(5) declare foreign taxes paid, and

(6) declare United States source income from retirement, pension and social security benefits to be treated as resourced from treaty income where tax has been paid upon distribution.

(b) SPECIFIED INDIVIDUAL. —

(1) IN GENERAL. — For purposes of this section, the term "specified individual" means, with respect to a taxable year, an individual —

(A) who qualifies as a non-resident citizen under the substantial presence test of section 7701(b)(3), or is the spouse of non-resident citizen, and

(B) who declares —

(i) an income less than $400,000, and

(ii) a tax liability of $0.

(2) INFLATION ADJUSTMENT. —

(A) IN GENERAL. — In the case of any taxable year beginning after 2023, the $400,000 amount in paragraph (1)(B)(i) shall be increased by an amount equal to —

(i) such dollar amount, multiplied by

(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting "2022" for "2016" in subparagraph (A)(ii) thereof.

(c) EFFECTIVE DATE. — The form required by subsection (a) shall be made available for taxable years beginning one year after the date of the enactment of this Act.

SEC. 3. EXPANSION OF INCOME ALLOWED AS FOREIGN EARNED INCOME.

(a) IN GENERAL. — Section 911 of the Internal Revenue Code of 1986 is amended —

(1) in subsection (b)(1)(B), by striking clause (i) and by redesignating clauses (ii) through (iv) as clause (i) through (iii), respectively,

(2) in subsection (b)(1)(A), by striking "attributable to services performed by such individual" and inserting "attributable to services performed by such individual or benefits received by such individual", and

(3) in subsection (d)(2), by striking "wages, salaries, or professional fees" and inserting "wages, salaries, professional fees, pensions, scholarships, fellowship grants, interest and dividends, capital gains, distributions from retirement funds, or payments received by the taxpayer with respect to disability, unemployment, family medical leave, or childcare".

(b) EFFECTIVE DATE. — The amendments made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act.