Estes offers bipartisan bill to update tax on unearned income of U.S. children, youth

Rep. Ron Estes

U.S. Rep. Ron Estes (R-KS) is the lead original cosponsor of a bipartisan bill to modify the taxation of unearned income for certain U.S. children and youth.

Rep. Estes on Oct. 17 introduced the Tax Fairness for Youth Act of 2019, H.R. 4728, with bill sponsor U.S. Rep. Gwen Moore (D-WI) and nine other cosponsors, including U.S. Reps. Tom Cole (R-OK) and Ken Calvert (R-CA).

“The Tax Fairness for Youth Act makes common-sense reforms to our tax code to support some of the most vulnerable members of our society,” Rep. Estes said.

If enacted, H.R. 4728 would protect the recipients of military survivor benefits, first responder survivor benefits, tribal distributions, scholarships and fellowship grants, Alaska permanent fund dividends, and Social Security benefits from higher taxes resulting from the Tax Cuts and Jobs Act of 2017, according to a bill summary provided by Rep. Estes’ office.

“This legislation builds on progress to improve provisions of the Tax Cuts and Jobs Act by ensuring unearned income of children like benefits and scholarships are not taxed at unfair rates, providing young people and students more opportunities to save money and pursue education,” said Rep. Estes.

Prior to the Tax Cuts and Jobs Act of 2017, the unearned income of children and youth was subject to the parental tax rate if it was higher than the child’s tax rate, according to the congressman’s summary.

The law modified these tax rules by increasing the tax rates on the unearned income of children and youth, negatively impacting certain populations, including children of U.S. military Gold Star families and Native Americans who receive military and U.S. Department of Veteran Affairs’ survivor benefit plan payments or tribal payments, according to the summary.

H.R. 4728 has been referred for consideration to the U.S. House Ways and Means Committee, on which Rep. Estes is a member.

“I look forward to working with my colleagues on the Ways and Means Committee to advance this bipartisan bill in Congress,” the lawmaker said.