Overview
Title
To amend the Internal Revenue Code of 1986 to provide an income tax credit for fertility treatments.
ELI5 AI
H. R. 1878 is a bill that helps people pay for fertility treatments by giving them money back on their taxes. If they spend money on special treatments to help have a baby, they can get some of that money back, like $20,000 for each person or $40,000 for a couple who files taxes together.
Summary AI
H. R. 1878 is a bill that aims to amend the Internal Revenue Code of 1986 to offer an income tax credit for fertility treatments. Individuals who qualify can receive a credit for expenses incurred from assisted reproductive technology, up to $20,000 per year, or up to $40,000 for married couples filing jointly. The credit amount may decrease if a taxpayer's adjusted gross income exceeds certain thresholds. The bill also outlines rules to prevent double benefits where expenses have been reimbursed by insurance or claimed under other credits.
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AnalysisAI
Summary of the Bill
The proposed bill, titled the "IVF Access and Affordability Act," aims to provide a financial incentive through the U.S. tax code to individuals undergoing fertility treatments. Specifically, it introduces a tax credit for expenses related to assisted reproductive technology (ART), such as in vitro fertilization (IVF). An individual taxpayer can claim a credit of up to $20,000 annually, with joint filers or surviving spouses eligible for a higher limit of $40,000. The credit is subject to income limitations, reducing as adjusted gross income (AGI) exceeds specified thresholds. Additionally, any unused credits can be carried forward for up to five years.
Significant Issues
One of the key issues lies in the disparity of the credit limits between single filers and joint filers. While joint filers can claim double the amount of single filers, this structure could exacerbate inequalities between different taxpayer groups. Another concern involves the complexity of the income limitation calculation, which might be challenging for taxpayers to comprehend, potentially leading to errors in application. There's also a stipulation requiring married couples to file joint returns to access the credit, which might pose an inconvenience for some. Furthermore, the bill references another act for the definition of ART, which could create understanding barriers for those unfamiliar with the legislation. Lastly, the bill sets a five-year limit for carrying forward unused credits, which might be restrictive for those with fluctuating incomes.
Impact on the General Public
For the general public, this bill represents a significant shift toward recognizing and supporting the financial burdens associated with fertility treatments. By providing a substantial tax credit, it could make such treatments more accessible and financially feasible for many individuals and families. However, the bill's complexity, particularly around income calculations and joint filing requirements, might confuse and inhibit taxpayers from fully benefiting from the credit.
Impact on Specific Stakeholders
For those undergoing fertility treatments, particularly in higher-income brackets, the bill offers a substantial financial benefit. It may enable more families to pursue ART in hopes of having children. However, lower-income individuals, who often are most impacted by the costs of such medical treatments, might find the income limitation reduces the benefit they receive, potentially creating a disparity based on income.
Married couples who, for various reasons, prefer or need to file separately might find the requirement to file jointly to claim the credit restrictive or disadvantageous. This could impact their financial planning and obligation.
Clinics and healthcare providers specializing in reproductive treatments could see increased demand due to the proposed tax benefits, potentially broadening their client base.
Overall, the bill addresses an important aspect of family planning and healthcare financing, potentially offering significant support to many families while also raising questions about fairness and complexity in application.
Financial Assessment
The proposed bill, H. R. 1878, aims to introduce an income tax credit to support people with expenses related to fertility treatments. This bill specifically targets expenses incurred from assisted reproductive technology, with a notable emphasis on monetary limits and qualifications for receiving the credit.
Financial Provisions of the Bill
The bill allows eligible individuals to claim a tax credit that equals the expenses paid for assisted reproductive technology during a taxable year. A crucial financial aspect is that the credit is capped at $20,000 per individual. For couples filing a joint tax return, this limit is extended to $40,000. These amounts are established as the maximum financial relief available through the tax credit, directly impacting the financial decisions of those considering fertility treatments.
Addressing Identified Issues
Unequal Benefits and Filing Jointly:
The disparity between the benefit for individuals and couples who file jointly is a significant concern. While individual taxpayers can claim a maximum of $20,000, couples filing jointly can claim up to $40,000. This may imply unequal financial benefits depending on the taxpayer's marital status and filing decisions, potentially leading to disparities in financial relief. Politically and financially, this could create discussions around taxpayer equality, as single individuals or those who cannot file jointly for various reasons might feel disadvantaged.
Income Limitation Complexity:
The bill introduces an income-related adjustment wherein the credit amount decreases for taxpayers whose adjusted gross income exceeds $200,000. Specifically, for these taxpayers, the credit is reduced by an amount proportional to the extent their income goes beyond this threshold. For joint filers, this limit is set to $400,000. This calculation could be complicated for taxpayers to interpret and implement, raising legal and financial challenges for those unfamiliar with tax codes.
Requirement to File Joint Returns:
A requirement for married couples to file joint returns to claim the tax credit may affect financial decision-making. While beneficial for some, it may result in less favorable tax positions for others, especially where filing separately could otherwise be more financially advantageous. This condition could become a politically and financially controversial aspect, potentially limiting the benefit's accessibility and creating a perceived lack of flexibility.
Additional Financial Considerations
Carryforward of Unused Credits:
Section 23A also contains a provision for the carryforward of unused tax credits for up to five years. While this allows some flexibility in aligning tax liabilities with financial benefits, it could prove insufficient for individuals experiencing fluctuating annual incomes. These taxpayers may find it challenging to fully leverage the credit within the prescribed timeframe, potentially diminishing the credit's long-term financial value.
Overall, the IVF Access and Affordability Act seeks to provide substantial financial support through tax credits for fertility treatments. However, it also introduces complexities and potential disparities that warrant careful consideration and might stimulate both political debate and financial planning discussions.
Issues
The dollar limitation on the credit (Section 23A) may result in unequal benefits for individuals compared to those filing jointly, potentially leading to disparities between taxpayers. This may be significant for both political and financial reasons, as it impacts taxpayer equality.
The income limitation calculation (Section 23A) is complex and may be difficult for taxpayers to understand and apply. This complexity may lead to misunderstandings and errors, posing legal and financial challenges for taxpayers unfamiliar with specific tax codes.
The requirement for married couples to file joint returns to claim the credit (Section 23A) could limit flexibility and result in a disadvantageous tax position for some couples, which may be politically and financially controversial.
The definition of 'assisted reproductive technology' references another act (Fertility Clinic Success Rate and Certification Act of 1992) for clarity (Section 23A). This reliance on external legislation could create confusion, impacting the legal and practical understanding of eligible expenses.
The carryforward limitation of unused credits to five years (Section 23A) may not be sufficient for individuals with fluctuating tax liabilities, potentially limiting the long-term financial benefits of the credit, which could raise concerns from a financial planning perspective.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill provides its short title, stating that it may be referred to as the "IVF Access and Affordability Act".
2. Credit for fertility treatments Read Opens in new tab
Summary AI
The document introduces a tax credit for eligible individuals to cover costs related to fertility treatments using assisted reproductive technology. The credit has a cap of $20,000 per year, with a larger cap of $40,000 for joint filings, and includes income-based reductions for those earning over certain thresholds.
Money References
- “(b) Limitations.— “(1) DOLLAR LIMITATION.— “(A) IN GENERAL.—The amount of the credit under subsection (a) for any taxable year shall not exceed $20,000.
- with respect to a taxable year in which both individuals, or the individual and the spouse of such individual, incur assisted reproductive technology expenses, subparagraph (A) shall be applied by substituting ‘$40,000’ for ‘$20,000’.
- “(2) INCOME LIMITATION.— “(A) IN GENERAL.—The amount otherwise allowable as a credit under subsection (a) for any taxable year shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so allowable as— “(i) the amount (if any) by which the taxpayer’s adjusted gross income exceeds $200,000, bears to “(ii) $100,000.
- “(B) SPECIAL RULE.—In the case of a joint return or a surviving spouse (as defined in section 2(a)), subparagraph (A) shall be applied by substituting ‘$400,000’ for ‘$200,000’ and ‘$200,000’ for ‘$100,000’.
23A. Credit for fertility treatments Read Opens in new tab
Summary AI
In this section, individuals who qualify can get a tax credit for expenses related to fertility treatments, with a limit of $20,000 per year, or $40,000 for joint filers or surviving spouses. However, the credit decreases if their income exceeds certain thresholds, cannot be combined with other deductions or credits, and is not available if the expenses are covered by insurance. Any unused credit can be carried forward for up to five years.
Money References
- (a) Allowance of credit.—In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the assisted reproductive technology expenses paid or incurred during the taxable year. (b) Limitations.— (1) DOLLAR LIMITATION.— (A) IN GENERAL.—The amount of the credit under subsection (a) for any taxable year shall not exceed $20,000. (B) SPECIAL RULE.—In the case of two individuals filing a joint return or an individual filing as a surviving spouse (as defined in section 2(a)) with respect to a taxable year in which both individuals, or the individual and the spouse of such individual, incur assisted reproductive technology expenses, subparagraph (A) shall be applied by substituting “$40,000” for “$20,000”.
- (2) INCOME LIMITATION.— (A) IN GENERAL.—The amount otherwise allowable as a credit under subsection (a) for any taxable year shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so allowable as— (i) the amount (if any) by which the taxpayer’s adjusted gross income exceeds $200,000, bears to (ii) $100,000.
- (B) SPECIAL RULE.—In the case of a joint return or a surviving spouse (as defined in section 2(a)), subparagraph (A) shall be applied by substituting “$400,000” for “$200,000” and “$200,000” for “$100,000”.