Sec. 11001. Modification of rates

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Section 1 is amended by adding at the end the following new subsection: In the case of a taxable year beginning after December 31, 2017, and before January 1, 2026— subsection

(i)shall not apply, and this section (other than subsection (i)) shall be applied as provided in paragraphs

(2)through (7). The following table shall be applied in lieu of the table contained in subsection (a): If taxable income is: The tax is: Not over $19,050 10% of taxable income. Over $19,050 but not over $77,400 $1,905, plus 12% of the excess over $19,050. Over $77,400 but not over $140,000 $8,907, plus 22% of the excess over $77,400. Over $140,000 but not over $320,000 $22,679, plus 24% of the excess over $140,000. Over $320,000 but not over $400,000 $65,879, plus 32% of the excess over $320,000. Over $400,000 but not over $1,000,000 $91,479, plus 35% of the excess over $400,000. Over $1,000,000 $301,479, plus 38.5% of the excess over $1,000,000. The following table shall be applied in lieu of the table contained in subsection (b): If taxable income is: The tax is: Not over $13,600 10% of taxable income. Over $13,600 but not over $51,800 $1,360, plus 12% of the excess over $13,600. Over $51,800 but not over $70,000 $5,944, plus 22% of the excess over $51,800. Over $70,000 but not over $160,000 $9,948, plus 24% of the excess over $70,000. Over $160,000 but not over $200,000 $31,548, plus 32% of the excess over $160,000. Over $200,000 but not over $500,000 $44,348, plus 35% of the excess over $200,000. Over $500,000 $149,348, plus 38.5% of the excess over $500,000. The following table shall be applied in lieu of the table contained in subsection (c): If taxable income is: The tax is: Not over $9,525 10% of taxable income. Over $9,525 but not over $38,700 $952.50, plus 12% of the excess over $9,525. Over $38,700 but not over $70,000 $4,453.50, plus 22% of the excess over $38,700. Over $70,000 but not over $160,000 $11,339.50, plus 24% of the excess over $70,000. Over $160,000 but not over $200,000 $32,939.50, plus 32% of the excess over $160,000. Over $200,000 but not over $500,000 $45,739.50, plus 35% of the excess over $200,000. Over $500,000 $150,739.50, plus 38.5% of the excess over $500,000. The following table shall be applied in lieu of the table contained in subsection (d): If taxable income is: The tax is: Not over $9,525 10% of taxable income. Over $9,525 but not over $38,700 $952.50, plus 12% of the excess over $9,525. Over $38,700 but not over $70,000 $4,453.50, plus 22% of the excess over $38,700. Over $70,000 but not over $160,000 $11,339.50, plus 24% of the excess over $70,000. Over $160,000 but not over $200,000 $32,939.50, plus 32% of the excess over $160,000. Over $200,000 but not over $500,000 $45,739.50, plus 35% of the excess over $200,000. Over $500,000 $150,739.50, plus 38.5% of the excess over $500,000. The following table shall be applied in lieu of the table contained in subsection (e): If taxable income is: The tax is: Not over $2,550 10% of taxable income. Over $2,550 but not over $9,150 $255, plus 24% of the excess over $2,550. Over $9,150 but not over $12,500 $1,839, plus 35% of the excess over $9,150. Over $12,500 $3,011.50, plus 38.5% of the excess over $12,500. Any reference in this title to a rate of tax under subsection

(c)shall be treated as a reference to the corresponding rate bracket under subparagraph

(C)of this paragraph, except that the reference in section 3402(q)(1) to the third lowest rate of tax applicable under subsection

(c)shall be treated as a reference to the fourth lowest rate of tax under subparagraph (C). The tables contained in paragraph

(2)shall apply without adjustment for taxable years beginning after December 31, 2017, and before January 1, 2019. For taxable years beginning after December 31, 2018, the Secretary shall prescribe tables which shall apply in lieu of the tables contained in paragraph

(2)in the same manner as under paragraphs

(1)and

(2)of subsection (f), except that in prescribing such tables— subsection (f)(3) shall be applied by substituting calendar year 2017 for calendar year 2016 in subparagraph (A)(ii) thereof, subsection (f)(7)(B) shall apply to any unmarried individual other than a surviving spouse or head of household, and subsection (f)(8) shall not apply. In the case of a child to whom subsection

(g)applies for the taxable year, the rules of subparagraphs

(B)and

(C)shall apply in lieu of the rule under subsection (g)(1). In determining the amount of tax imposed by this section for the taxable year on a child described in subparagraph (A), the income tax table otherwise applicable under this subsection to the child shall be applied with the following modifications: The maximum taxable income which is taxed at a rate below 24 percent shall not be more than the earned taxable income of such child. The maximum taxable income which is taxed at a rate below 35 percent shall not be more than the sum of— the earned taxable income of such child, plus the minimum taxable income for the 35-percent bracket in the table under paragraph (2)(E) (as adjusted under paragraph (3)) for the taxable year. The maximum taxable income which is taxed at a rate below 38.5 percent shall not be more than the sum of— the earned taxable income of such child, plus the minimum taxable income for the 38.5-percent bracket in the table under paragraph (2)(E) (as adjusted under paragraph (3)) for the taxable year. For purposes of applying section 1(h) (after the modifications under paragraph (5))— the maximum zero rate amount shall not be more than the sum of— the earned taxable income of such child, plus the amount in effect under paragraph (5)(B)(i)(IV) for the taxable year, and the maximum 15-percent rate amount shall not be more than the sum of— the earned taxable income of such child, plus the amount in effect under paragraph (5)(B)(ii)(IV) for the taxable year. For purposes of this paragraph, the term earned taxable income means, with respect to any child for any taxable year, the taxable income of such child reduced (but not below zero) by the net unearned income (as defined in subsection (g)(4)) of such child. Section 1(h)(1) shall be applied— by substituting below the maximum zero rate amount for which would (without regard to this paragraph) be taxed at a rate below 25 percent in subparagraph (B)(i), and by substituting below the maximum 15-percent rate amount for which would (without regard to this paragraph) be taxed at a rate below 39.6 percent in subparagraph (C)(ii)(I). For purposes of applying section 1(h) with the modifications described in subparagraph (A)— The maximum zero rate amount shall be— in the case of a joint return or surviving spouse, $77,200, in the case of an individual who is a head of household (as defined in section 2(b)), $51,700, in the case of any other individual (other than an estate or trust), an amount equal to ½ of the amount in effect for the taxable year under subclause (I), and in the case of an estate or trust, $2,600. The maximum 15-percent rate amount shall be— in the case of a joint return or surviving spouse, $479,000 ( ½ such amount in the case of a married individual filing a separate return), in the case of an individual who is the head of a household (as defined in section 2(b)), $452,400, in the case of any other individual (other than an estate or trust), $425,800, and in the case of an estate or trust, $12,700. In the case of any taxable year beginning after 2018, each of the dollar amounts in clauses

(i)and

(ii)of subparagraph

(B)shall be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under subsection (f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2017 for calendar year 2016 in subparagraph (A)(ii) thereof. Section 15 shall not apply to any change in a rate of tax by reason of this subsection. . Subsection

(g)of section 6695 is amended to read as follows: Any person who is a tax return preparer with respect to any return or claim for refund who fails to comply with due diligence requirements imposed by the Secretary by regulations with respect to determining— eligibility to file as a head of household (as defined in section 2(b)) on the return, or eligibility for, or the amount of, the credit allowable by section 24, 25A(a)(1), or 32, shall pay a penalty of $500 for each such failure. . The amendments made by this section shall apply to taxable years beginning after December 31, 2017.