Title VII, SEC. 7131. RECAPTURE OF CERTAIN HEALTH CARE SUBSIDIES RECEIVED BY HIGH-INCOME INDIVIDUALS. (a) In General. Subchapter A of chapter 1 is amended by adding at the end thereof the following new part: ``PART VIII CERTAIN HEALTH CARE SUBSIDIES RECEIVED BY HIGH-INCOME INDIVIDUALS ``Sec. 59B. Recapture of certain health care subsidies. ``SEC. 59B. RECAPTURE OF CERTAIN HEALTH CARE SUBSIDIES. ``(a) Imposition of Recapture Amount. In the case of an individual, if the modified adjusted gross income of the taxpayer for the taxable year exceeds the threshold amount, such taxpayer shall pay (in addition to any other amount imposed by this subtitle) a recapture amount for such taxable year equal to the sum of ``(1) the aggregate of the Medicare part B recapture amounts (if any) for months during such year that a premium is paid under part B of title XVIII of the Social Security Act for the coverage of the individual under such part, and ``(2) the aggregate reductions (if any) in the individual's liability for periods after December 31, 1999, under section 6111 of the Health Security Act (relating to repayment of alliance credit by certain families) pursuant to section 6114 of such Act (relating to special treatment of certain retirees and qualified spouses and children) for months during such year. ``(b) Medicare Part B Premium Recapture Amount for Month. For purposes of this section, the Medicare part B premium recapture amount for any month is the amount equal to the excess of ``(1) 150 percent of the monthly actuarial rate for enrollees age 65 and over determined for that calendar year under section 1839(b) of the Social Security Act, over ``(2) the total monthly premium under section 1839 of the Social Security Act (determined without regard to subsections (b) and (f) of section 1839 of such Act). ``(c) Phasein of Recapture Amount. If the modified adjusted gross income of the taxpayer for any taxable year exceeds the threshold amount by less than $10,000, the recapture amount imposed by this section for such taxable year shall be an amount which bears the same ratio to the recapture amount which would (but for this subsection) be imposed by this section for such taxable year as such excess bears to $10,000. ``(d) Other Definitions and Special Rules. For purposes of this section ``(1) Threshold amount. The term `threshold amount' means ``(A) except as otherwise provided in this paragraph, $90,000, ``(B) $115,000 in the case of a joint return, and ``(C) zero in the case of a taxpayer who ``(i) is married (as determined under section 7703) but does not file a joint return for such year, and ``(ii) does not live apart from his spouse at all times during the taxable year. ``(2) Modified adjusted gross income. The term `modified adjusted gross income' means adjusted gross income ``(A) determined without regard to sections 135, 911, 931, and 933, and ``(B) increased by the amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax. ``(3) Joint returns. In the case of a joint return ``(A) the recapture amount under subsection (a) shall be the sum of the recapture amounts determined separately for each spouse, and ``(B) subsections (a) and (c) shall be applied by taking into account the combined modified adjusted gross income of the spouses. ``(4) Coordination with other provisions. ``(A) Treated as tax for subtitle f. For purposes of subtitle F, the recapture amount imposed by this section shall be treated as if it were a tax imposed by section 1. ``(B) Not treated as tax for certain purposes. The recapture amount imposed by this section shall not be treated as a tax imposed by this chapter for purposes of determining ``(i) the amount of any credit allowable under this chapter, or ``(ii) the amount of the minimum tax under section 55.'' (b) Transfers to Supplemental Medical Insurance Trust Fund. (1) In general. There are hereby appropriated to the Supplemental Medical Insurance Trust Fund amounts equivalent to the aggregate increase in liabilities under chapter 1 of the Internal Revenue Code of 1986 which is attributable to the application of section 59B(a)(1) of such Code, as added by this section. (2) Transfers. The amounts appropriated by paragraph (1) to the Supplemental Medical Insurance Trust Fund shall be transferred from time to time (but not less frequently than quarterly) from the general fund of the Treasury on the basis of estimates made by the Secretary of the Treasury of the amounts referred to in paragraph (1). Any quarterly payment shall be made on the first day of such quarter and shall take into account the recapture amounts referred to in such section 59B(a)(1) for such quarter. Proper adjustments shall be made in the amounts subsequently transferred to the extent prior estimates were in excess of or less than the amounts required to be transferred. (c) Reporting Requirements. (1)(A) Paragraph (1) of section 6050F(a) (relating to returns relating to social security benefits) is amended by striking ``and'' at the end of subparagraph (B) and by inserting after subparagraph (C) the following new subparagraph: ``(D) the number of months during the calendar year for which a premium was paid under part B of title XVIII of the Social Security Act for the coverage of such individual under such part, and''. (B) Paragraph (2) of section 6050F(b) is amended to read as follows: ``(2) the information required to be shown on such return with respect to such individual.'' (C) Subparagraph (A) of section 6050F(c)(1) is amended by inserting before the comma ``and in the case of the information specified in subsection (a)(1)(D)''. (D) The heading for section 6050F is amended by inserting `` G2and medicare part b coverage'' before the period. (E) The item relating to section 6050F in the table of sections for subpart B of part III of subchapter A of chapter 61 is amended by inserting ``and Medicare part B coverage'' before the period. (2)(A) Subpart B of part III of subchapter A of chapter 61 (relating to information concerning transactions with other persons) is amended by adding at the end thereof the following new section: ``SEC. 6050Q. RETURNS RELATING TO CERTAIN RETIREE HEALTH CARE SUBSIDIES. ``(a) In General. Every alliance (as defined in section 1301 of the Health Security Act) that reduces an individual's liability under section 6111 of such Act (relating to repayment of alliance credit by certain families) pursuant to section 6114 of such Act (relating to special treatment of certain retirees and qualified spouses and children) shall make a return (according to the forms and regulations prescribed by the Secretary) setting forth ``(1) the aggregate amount of such reductions by such alliance with respect to any individual during such calendar year, and ``(2) the name and address of such individual. ``(b) Statements To Be Furnished to Individuals With Respect to Whom Information Is Required To Be Reported. Every alliance required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing ``(1) the name and address of such alliance, and ``(2) the information required to be shown on the return with respect to such individual. The written statement required under the preceding sentence shall be furnished to the individual as soon as practicable after the close of the calendar year for which the return under subsection (a) was made.'' (B) Subparagraph (B) of section 6724(d)(1) is amended by inserting after clause (viii) the following new clause (and by redesignating the following clauses accordingly): ``(ix) section 6050Q (relating to returns relating to certain retiree health care subsidies),''. (C) Paragraph (2) of section 6724(d) is amended by redesignating subparagraphs (Q) through (T) as subparagraphs (R) through (U), respectively, and by inserting after subparagraph (P) the following new subparagraph: ``(Q) section 6050Q(b) (relating to returns relating to certain retiree health care subsidies),''. (D) The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by adding at the end thereof the following new item: ``Sec. 6050Q. Returns relating to certain retiree health care subsidies.'' ``(d) Waiver of Estimated Tax Penalties for 1996. No addition to tax shall be imposed under section 6654 of the Internal Revenue Code of 1986 (relating to failure to pay estimated income tax) for any period before ``(1) April 16, 1997, with respect to any underpayment to the extent that such underpayment resulted from section 59B(a)(1) of the Internal Revenue Code of 1986, as added by this section, and ``(2) April 16, 2001, with respect to any underpayment to the extent that such underpayment resulted from section 59B(a)(2) of such Code, as added by this section. ``(e) Clerical Amendment. The table of parts for subchapter A of chapter 1 is amended by adding at the end thereof the following new item: ``Part VIII. Certain health care subsidies received by high-income individuals.'' ``(f) Effective Date. The amendments made by this section shall apply to periods after December 31, 1995, in taxable years ending after such date.