Child and Dependent Care Tax Credit Enhancement Act of 2019

II 116TH CONGRESS 1ST SESSION S. 931 To amend the Internal Revenue Code of 1986 to enhance the Child and Dependent Care Tax Credit and make the credit fully refundable. IN THE SENATE OF THE UNITED STATES MARCH 28, 2019 Mr. CASEY (for himself, Mrs. MURRAY, Mr. WYDEN, Mr. BROWN, Mr. CARDIN, Ms. CANTWELL, Mrs. GILLIBRAND, Ms. HASSAN, Ms. HIRONO, Mr. MENENDEZ, Ms. STABENOW, Ms. CORTEZ MASTO, Ms. KLOBUCHAR, Mr. VAN HOLLEN, Mr. BLUMENTHAL, Mr. BENNET, Mr. WHITEHOUSE, Mr. MERKLEY, Mr. REED, Mr. DURBIN, Mr. LEAHY, and Mr. SCHUMER) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to enhance the Child and Dependent Care Tax Credit and make the credit fully refundable. 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 ‘‘Child and Dependent 4 Care Tax Credit Enhancement Act of 2019’’. 5 VerDate Sep 11 2014 03:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S931.IS S931 kjohnson on DSK79L0C42 with BILLS 2 •S 931 IS SEC. 2. ENHANCEMENT OF CHILD AND DEPENDENT CARE 1 TAX CREDIT. 2 (a) IN GENERAL.—Paragraph (2) of section 21(a) of 3 the Internal Revenue Code of 1986 is amended to read 4 as follows: 5 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 6 of paragraph (1), the term ‘applicable percentage’ 7 means 50 percent reduced (but not below 20 per- 8 cent) by 1 percentage point for each $2,000 (or frac- 9 tion thereof) by which the taxpayer’s adjusted gross 10 income for the taxable year exceeds $120,000.’’. 11 (b) INCREASE IN DOLLAR LIMIT ON AMOUNT CRED- 12 ITABLE.—Subsection (c) of section 21 of the Internal Rev- 13 enue Code of 1986 is amended— 14 (1) in paragraph (1), by striking ‘‘$3,000’’ and 15 inserting ‘‘$6,000’’; and 16 (2) in paragraph (2), by striking ‘‘$6,000’’ and 17 inserting ‘‘$12,000’’. 18 (c) SPECIAL RULE FOR MARRIED COUPLES FILING 19 SEPARATE RETURNS.—Paragraph (2) of section 21(e) of 20 the Internal Revenue Code of 1986 is amended to read 21 as follows: 22 ‘‘(2) MARRIED COUPLES FILING SEPARATE RE- 23 TURNS.— 24 VerDate Sep 11 2014 03:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S931.IS S931 kjohnson on DSK79L0C42 with BILLS 3 •S 931 IS ‘‘(A) IN GENERAL.—In the case of married 1 individuals who do not file a joint return for the 2 taxable year— 3 ‘‘(i) the applicable percentage under 4 subsection (a)(2) and the number of quali- 5 fying individuals and aggregate amount ex- 6 cludable under section 129 for purposes of 7 subsection (c) shall be determined with re- 8 spect to each such individual as if the indi- 9 vidual had filed a joint return with the in- 10 dividual’s spouse, and 11 ‘‘(ii) the aggregate amount of the 12 credits allowed under this section for such 13 taxable year with respect to both spouses 14 shall not exceed the amount which would 15 have been allowed under this section if the 16 individuals had filed a joint return. 17 ‘‘(B) REGULATIONS.—The Secretary shall 18 prescribe such regulations or other guidance as 19 is necessary to carry out the purposes of this 20 subsection.’’. 21 (d) ADJUSTMENT FOR INFLATION.—Section 21 of 22 the Internal Revenue Code of 1986 is amended— 23 (1) by redesignating subsection (f) as sub- 24 section (g); and 25 VerDate Sep 11 2014 03:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S931.IS S931 kjohnson on DSK79L0C42 with BILLS 4 •S 931 IS (2) by inserting after subsection (e) the fol- 1 lowing new subsection: 2 ‘‘(f) INFLATION ADJUSTMENT.— 3 ‘‘(1) IN GENERAL.—In the case of a calendar 4 year beginning after 2020, the $120,000 amount in 5 paragraph (2) of subsection (a) and the dollar 6 amounts in subsection (c) shall each be increased by 7 an amount equal to— 8 ‘‘(A) such dollar amount, multiplied by 9 ‘‘(B) the cost-of-living adjustment deter- 10 mined under section 1(f)(3) for the calendar 11 year in which the taxable year begins, deter- 12 mined by substituting ‘calendar year 2019’ for 13 ‘calendar year 2016’ in subparagraph (A)(ii) 14 thereof. 15 ‘‘(2) ROUNDING.—If any dollar amount, after 16 being increased under paragraph (1), is not a mul- 17 tiple of $100, such dollar amount shall be rounded 18 to the next lowest multiple of $100.’’. 19 (e) CREDIT TO BE REFUNDABLE.— 20 (1) IN GENERAL.—The Internal Revenue Code 21 of 1986 is amended— 22 (A) by redesignating section 21 as section 23 36C; and 24 VerDate Sep 11 2014 03:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S931.IS S931 kjohnson on DSK79L0C42 with BILLS 5 •S 931 IS (B) by moving section 36C, as so redesig- 1 nated, from subpart A of part IV of subchapter 2 A of chapter 1 to the location immediately be- 3 fore section 37 in subpart C of part IV of sub- 4 chapter A of chapter 1. 5 (2) TECHNICAL AMENDMENTS.— 6 (A) Paragraph (1) of section 23(f) of the 7 Internal Revenue Code of 1986 is amended by 8 striking ‘‘21(e)’’ and inserting ‘‘36C(e)’’. 9 (B) Paragraph (6) of section 35(g) of such 10 Code is amended by striking ‘‘21(e)’’ and in- 11 serting ‘‘36C(e)’’. 12 (C) Paragraph (1) of section 36C(a) of 13 such Code (as redesignated by paragraph (1)) 14 is amended by striking ‘‘this chapter’’ and in- 15 serting ‘‘this subtitle’’. 16 (D) Subparagraph (C) of section 129(a)(2) 17 of such Code is amended by striking ‘‘section 18 21(e)’’ and inserting ‘‘section 36C(e)’’. 19 (E) Paragraph (2) of section 129(b) of 20 such Code is amended by striking ‘‘section 21 21(d)(2)’’ and inserting ‘‘section 36C(d)(2)’’. 22 (F) Paragraph (1) of section 129(e) of 23 such Code is amended by striking ‘‘section 24 21(b)(2)’’ and inserting ‘‘section 36C(b)(2)’’. 25 VerDate Sep 11 2014 03:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S931.IS S931 kjohnson on DSK79L0C42 with BILLS 6 •S 931 IS (G) Subsection (e) of section 213 of such 1 Code is amended by striking ‘‘section 21’’ and 2 inserting ‘‘section 36C’’. 3 (H) Subparagraph (H) of section 4 6213(g)(2) of such Code is amended by striking 5 ‘‘section 21’’ and inserting ‘‘section 36C’’. 6 (I) Subparagraph (L) of section 7 6213(g)(2) of such Code is amended by striking 8 ‘‘section 21, 24, or 32,’’ and inserting ‘‘section 9 24, 32, or 36C,’’. 10 (J) Paragraph (2) of section 1324(b) of 11 title 31, United States Code, is amended by in- 12 serting ‘‘36C,’’ after ‘‘36B,’’. 13 (K) The table of sections for subpart C of 14 part IV of subchapter A of chapter 1 of the In- 15 ternal Revenue Code of 1986 is amended by in- 16 serting after the item relating to section 36B 17 the following: 18 ‘‘Sec. 36C. Expenses for household and dependent care services necessary for gainful employment.’’. (L) The table of sections for subpart A of 19 such part IV is amended by striking the item 20 relating to section 21. 21 VerDate Sep 11 2014 03:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S931.IS S931 kjohnson on DSK79L0C42 with BILLS 7 •S 931 IS (f) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 December 31, 2019. 3 Æ VerDate Sep 11 2014 03:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S931.IS S931 kjohnson on DSK79L0C42 with BILLS