American Family Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 928 To amend the Internal Revenue Code of 1986 to make the child tax credit fully refundable, establish an increased child tax credit for young chil- dren, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 8, 2021 Ms. DELAURO (for herself, Ms. DELBENE, Mr. TORRES of New York, Mr. SMITH of Washington, Ms. SCHAKOWSKY, Ms. BONAMICI, Mr. CARSON, Mr. HORSFORD, Mrs. BEATTY, Mrs. DEMINGS, Mr. LOWENTHAL, Mr. MICHAEL F. DOYLE of Pennsylvania, Ms. LEE of California, Mrs. LURIA, Mr. GALLEGO, Mrs. CAROLYN B. MALONEY of New York, Mr. HASTINGS, Ms. NORTON, Ms. SCANLON, Mr. PANETTA, Mr. EVANS, Mr. CONNOLLY, Mr. MALINOWSKI, Ms. DEAN, Mr. LIEU, Mr. GARCI´A of Illinois, Mr. SAR- BANES, Mr. DEFAZIO, Mr. KILMER, Mr. MCGOVERN, Ms. WASSERMAN SCHULTZ, Ms. PINGREE, Ms. BARRAGA´N, Mr. DOGGETT, Ms. ROYBAL- ALLARD, Mr. BLUMENAUER, Mr. BOWMAN, Mr. WELCH, Mr. DANNY K. DAVIS of Illinois, Ms. LOFGREN, Mr. BUTTERFIELD, Mrs. HAYES, Mrs. KIRKPATRICK, Mrs. WATSON COLEMAN, Mr. SIRES, Mr. COHEN, Mr. SOTO, Mr. LANGEVIN, Ms. SCHRIER, Ms. MENG, Mr. GRIJALVA, Ms. JACKSON LEE, Ms. ESCOBAR, Ms. CLARK of Massachusetts, Mr. COURT- NEY, Ms. ROSS, Ms. SHERRILL, Ms. BROWNLEY, Ms. HOULAHAN, Mr. CROW, Mr. LYNCH, Mr. TONKO, Mr. KEATING, Mr. COOPER, Ms. OCASIO-CORTEZ, Mr. MORELLE, Mr. ESPAILLAT, Ms. MATSUI, Mr. TRONE, Mr. MCNERNEY, Mr. PRICE of North Carolina, Ms. WILD, Ms. DEGETTE, Ms. KELLY of Illinois, Mr. MEEKS, Mr. SABLAN, Mr. LARSON of Connecticut, Ms. SPEIER, Mr. HIGGINS of New York, Mr. POCAN, Mr. CA´RDENAS, Mr. VARGAS, Ms. SEWELL, Ms. MANNING, Miss RICE of New York, Mr. CARBAJAL, Mr. CUELLAR, Mr. DAVID SCOTT of Georgia, Ms. LEGER FERNANDEZ, Mr. SUOZZI, Mr. JONES, Ms. SA´NCHEZ, Ms. CRAIG, Ms. GARCIA of Texas, Ms. MOORE of Wisconsin, Mr. VEASEY, Mr. NAD- LER, Mr. FOSTER, Mr. TAKANO, Mr. YARMUTH, Mr. JOHNSON of Geor- gia, Ms. BASS, Mr. PALLONE, Ms. TITUS, Ms. BLUNT ROCHESTER, Ms. OMAR, Ms. TLAIB, Ms. KUSTER, Ms. LOIS FRANKEL of Florida, Mr. SHERMAN, Mr. RYAN, Mrs. LAWRENCE, Mr. DESAULNIER, Mrs. TRAHAN, Mr. LAWSON of Florida, Ms. WILSON of Florida, Mr. KAHELE, Mrs. NAPOLITANO, Ms. WILLIAMS of Georgia, Mr. KHANNA, Mr. PAYNE, Ms. CLARKE of New York, Ms. STRICKLAND, Ms. JACOBS of California, Ms. KAPTUR, Mr. O’HALLERAN, Mr. JEFFRIES, Mr. NEGUSE, Mr. LAR- VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 928 IH SEN of Washington, Ms. CHU, Mr. CARTWRIGHT, Ms. MCCOLLUM, Ms. VELA´ZQUEZ, Mr. SEAN PATRICK MALONEY of New York, Mr. KILDEE, Mr. HOYER, Mr. COSTA, Mr. LEVIN of California, Mr. AUCHINCLOSS, Mr. BEYER, Ms. NEWMAN, Mr. RASKIN, Ms. CASTOR of Florida, Mr. GOMEZ, Ms. JAYAPAL, Mr. HIMES, Mr. MOULTON, Mr. CASTEN, Mrs. DINGELL, Mr. BROWN, Mrs. TORRES of California, Mr. HUFFMAN, Ms. PLASKETT, Mr. PASCRELL, Mr. QUIGLEY, Mr. SCOTT of Virginia, and Ms. ESHOO) introduced the following bill; which was referred to the Com- mittee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to make the child tax credit fully refundable, establish an in- creased child tax credit for young children, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘American Family Act 4 of 2021’’. 5 SEC. 2. ESTABLISHMENT OF FULLY REFUNDABLE CHILD 6 TAX CREDIT. 7 (a) ELIMINATION OF EXISTING CHILD TAX CRED- 8 IT.—Subpart A of part IV of subchapter A of chapter 1 9 of subtitle A of the Internal Revenue Code of 1986 is 10 amended by striking section 24. 11 (b) ESTABLISHMENT OF FULLY REFUNDABLE 12 CHILD TAX CREDIT.—Subpart C of part IV of subchapter 13 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 928 IH A of chapter 1 of subtitle A of such Code is amended by 1 inserting after section 36B the following new section: 2 ‘‘SEC. 36C. CHILD TAX CREDIT. 3 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli- 4 gible individual, there shall be allowed as a credit against 5 the tax imposed by this chapter for the taxable year an 6 amount equal to the sum of— 7 ‘‘(1) with respect to each qualifying child of the 8 taxpayer who has attained 6 years of age before the 9 close of such taxable year and for which the tax- 10 payer is allowed a deduction under section 151, an 11 amount equal to $3,000, and 12 ‘‘(2) with respect to each qualifying child of the 13 taxpayer who has not attained 6 years of age before 14 the close of such taxable year and for which the tax- 15 payer is allowed a deduction under section 151, an 16 amount equal to 120 percent of the dollar amount 17 in paragraph (1). 18 ‘‘(b) LIMITATION.— 19 ‘‘(1) IN GENERAL.—The amount of the credit 20 allowable under subsection (a) shall be reduced (but 21 not below zero) by the applicable amount for each 22 $1,000 (or fraction thereof) by which the taxpayer’s 23 modified adjusted gross income exceeds the thresh- 24 old amount. For purposes of the preceding sentence, 25 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 928 IH the term ‘modified adjusted gross income’ means ad- 1 justed gross income increased by any amount ex- 2 cluded from gross income under section 911, 931, or 3 933. 4 ‘‘(2) THRESHOLD AMOUNT.— 5 ‘‘(A) IN GENERAL.—For purposes of para- 6 graph (1), the term ‘threshold amount’ 7 means— 8 ‘‘(i) $180,000 in the case of a joint 9 return, 10 ‘‘(ii) $130,000 in the case of an indi- 11 vidual who is not married, and 12 ‘‘(iii) $90,000 in the case of a married 13 individual filing a separate return. 14 ‘‘(B) MARITAL STATUS.—For purposes of 15 this paragraph, marital status shall be deter- 16 mined under section 7703. 17 ‘‘(3) APPLICABLE AMOUNT.—For purposes of 18 paragraph (1), the term ‘applicable amount’ means 19 an amount equal to the quotient of— 20 ‘‘(A) the amount of the credit allowable 21 under subsection (a), as determined without re- 22 gard to this subsection, divided by 23 ‘‘(B) an amount equal to the product of— 24 ‘‘(i) $20, multiplied by 25 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 928 IH ‘‘(ii) the total number of qualifying 1 children of the taxpayer. 2 ‘‘(c) QUALIFYING CHILD.—For purposes of this sec- 3 tion— 4 ‘‘(1) IN GENERAL.—The term ‘qualifying child’ 5 means a qualifying child of the taxpayer (as defined 6 in section 152(c)) who has not attained 18 years of 7 age. 8 ‘‘(2) EXCEPTION FOR CERTAIN NON-CITI- 9 ZENS.—The term ‘qualifying child’ shall not include 10 any individual who would not be a dependent if sub- 11 paragraph (A) of section 152(b)(3) were applied 12 without regard to all that follows ‘resident of the 13 United States’. 14 ‘‘(d) ELIGIBLE INDIVIDUAL.—For purposes of this 15 section, the term ‘eligible individual’ means, with respect 16 to any taxable year, any individual if such individual’s 17 principal place of abode is in the United States (as deter- 18 mined under section 32(c)(4)) for more than one-half of 19 such taxable year. 20 ‘‘(e) INFLATION ADJUSTMENT.— 21 ‘‘(1) IN GENERAL.—In the case of any taxable 22 year beginning after 2021, the $3,000 amount in 23 subsection (a)(1) shall be increased by an amount 24 equal to— 25 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 928 IH ‘‘(A) such dollar amount, multiplied by 1 ‘‘(B) the cost-of-living adjustment deter- 2 mined under paragraph (2) for the calendar 3 year in which the taxable year begins. 4 ‘‘(2) COST-OF-LIVING ADJUSTMENT.—For pur- 5 poses of paragraph (1), the cost-of-living adjustment 6 for any calendar year is the percentage (if any) by 7 which— 8 ‘‘(A) the CPI for the preceding calendar 9 year (as determined pursuant to section 10 1(f)(4)), exceeds 11 ‘‘(B) the CPI for calendar year 2020. 12 ‘‘(3) ROUNDING.—If any increase determined 13 under paragraph (1) is not a multiple of $50, such 14 increase shall be rounded to the nearest multiple of 15 $50. 16 ‘‘(f) PARTIAL NON-REFUNDABLE CREDIT ALLOWED 17 FOR CERTAIN OTHER DEPENDENTS.— 18 ‘‘(1) IN GENERAL.—In the case of a taxable 19 year beginning after December 31, 2020, and before 20 January 1, 2026, the aggregate credits allowed to a 21 taxpayer under subpart A shall be increased by $500 22 for each dependent of the taxpayer (as defined in 23 section 152) other than a qualifying child described 24 in subsection (c). The amount of the credit allowed 25 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 928 IH under this subsection shall not be treated as a credit 1 allowed under this subpart. 2 ‘‘(2) EXCEPTION FOR CERTAIN NONCITIZENS.— 3 Paragraph (1) shall not apply with respect to any 4 individual who would not be a dependent if subpara- 5 graph (A) of section 152(b)(3) were applied without 6 regard to all that follows ‘resident of the United 7 States’. 8 ‘‘(3) LIMITATION.— 9 ‘‘(A) IN GENERAL.—The amount of the 10 credit allowable under paragraph (1) shall be 11 reduced (but not below zero) by $50 for each 12 $1,000 (or fraction thereof) by which the tax- 13 payer’s modified adjusted gross income exceeds 14 the threshold amount. 15 ‘‘(B) MODIFIED ADJUSTED GROSS IN- 16 COME.—For purposes of subparagraph (A), the 17 term ‘modified adjusted gross income’ means 18 adjusted gross income increased by any amount 19 excluded from gross income under section 911, 20 931, or 933. 21 ‘‘(C) THRESHOLD AMOUNT.— 22 ‘‘(i) IN GENERAL.—For purposes of 23 subparagraph (A), the term ‘threshold 24 amount’ means— 25 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 928 IH ‘‘(I) $200,000 in the case of a 1 joint return, 2 ‘‘(II) $150,000 in the case of an 3 individual who is not married, and 4 ‘‘(III) $100,000 in the case of a 5 married individual filing a separate 6 return. 7 ‘‘(ii) MARITAL STATUS.—For pur- 8 poses of this subparagraph, marital status 9 shall be determined under section 7703. 10 ‘‘(g) IDENTIFICATION REQUIREMENTS.— 11 ‘‘(1) QUALIFYING CHILD AND DEPENDENT 12 IDENTIFICATION REQUIREMENT.—No credit shall be 13 allowed under this section to a taxpayer with respect 14 to any qualifying child or dependent unless the tax- 15 payer includes the name and taxpayer identification 16 number of such qualifying child or dependent on the 17 return of tax for the taxable year and such taxpayer 18 identification number was issued on or before the 19 due date for filing such return. 20 ‘‘(2) TAXPAYER IDENTIFICATION REQUIRE- 21 MENT.—No credit shall be allowed under this section 22 if the taxpayer identification number of the taxpayer 23 was issued after the due date for filing the return 24 for the taxable year. 25 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 928 IH ‘‘(h) TAXABLE YEAR MUST BE FULL TAXABLE 1 YEAR.—Except in the case of a taxable year closed by rea- 2 son of the death of the taxpayer, no credit shall be allow- 3 able under this section in the case of a taxable year cov- 4 ering a period of less than 12 months. 5 ‘‘(i) RESTRICTIONS ON TAXPAYERS WHO IMPROP- 6 ERLY CLAIMED CREDIT IN PRIOR YEAR.— 7 ‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT 8 OR RECKLESS CLAIMS.— 9 ‘‘(A) IN GENERAL.—No credit shall be al- 10 lowed under this section for any taxable year in 11 the disallowance period. 12 ‘‘(B) DISALLOWANCE PERIOD.—For pur- 13 poses of subparagraph (A), the disallowance pe- 14 riod is— 15 ‘‘(i) the period of 10 taxable years 16 after the most recent taxable year for 17 which there was a final determination that 18 the taxpayer’s claim of credit under this 19 section was due to fraud, and 20 ‘‘(ii) the period of 2 taxable years 21 after the most recent taxable year for 22 which there was a final determination that 23 the taxpayer’s claim of credit under this 24 section was due to reckless or intentional 25 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 928 IH disregard of rules and regulations (but not 1 due to fraud). 2 ‘‘(2) TAXPAYERS MAKING IMPROPER PRIOR 3 CLAIMS.—In the case of a taxpayer who is denied 4 credit under this section for any taxable year as a 5 result of the deficiency procedures under subchapter 6 B of chapter 63, no credit shall be allowed under 7 this section for any subsequent taxable year unless 8 the taxpayer provides such information as the Sec- 9 retary may require to demonstrate eligibility for 10 such credit. 11 ‘‘(j) RECONCILIATION OF CREDIT AND ADVANCE 12 CREDIT.— 13 ‘‘(1) IN GENERAL.—The amount of the credit 14 allowed under this section to any taxpayer for any 15 taxable year shall be reduced (but not below zero) by 16 the aggregate amount of payments made under sec- 17 tion 7527A to such taxpayer during such taxable 18 year. 19 ‘‘(2) EXCESS ADVANCE PAYMENTS.—If the ag- 20 gregate amount of payments under section 7527A to 21 the taxpayer during the taxable year exceeds the 22 amount of the credit allowed under this section to 23 such taxpayer for such taxable year (determined 24 without regard to paragraph (1)), the tax imposed 25 VerDate Sep 11 2014 22:41 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H928.IH H928 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 928 IH by this chapter for such taxable year shall be in- 1 creased by the amount of such excess.’’. 2 (c) ADVANCE PAYMENT OF CREDIT.—Chapter 77 of 3 the Internal Revenue Code of 1986 is amended by insert- 4 ing after section 7527 the following new section: 5 ‘‘SEC. 7527A. ADVANCE PAYMENT OF CHILD TAX CREDIT. 6 ‘‘(a) IN GENERAL.—As soon as practicable after the 7 date of the enactment of this section, the Secretary shall 8 establish a program for making monthly payments to tax- 9 payers which, in the aggregate during any calendar year, 10 equal the annual advance amount determined with respect 11 to such taxpayer for such calendar year. 12 ‘‘(b) ANNUAL ADVANCE AMOUNT.—For purposes of 13 this section— 14 ‘‘(1) IN GENERAL.—Except as otherwise pro- 15 vided in this subsection, the term ‘annual advance 16 amount’ means, with respect to any taxpayer for any 17 calendar year, the amount of the credit which would [Text truncated for display. Full text available on Congress.gov.]