Child and Dependent Care Tax Credit Enhancement Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 1967 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 HOUSE OF REPRESENTATIVES MARCH 28, 2019 Mr. DANNY K. DAVIS of Illinois (for himself and Ms. DELBENE) introduced the following bill; which was referred to the Committee on Ways and Means 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 SEC. 2. ENHANCEMENT OF CHILD AND DEPENDENT CARE 6 TAX CREDIT. 7 (a) IN GENERAL.—Section 21(a)(2) of the Internal 8 Revenue Code of 1986 is amended to read as follows: 9 VerDate Sep 11 2014 01:35 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1967.IH H1967 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 1967 IH ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 1 of paragraph (1), the term ‘applicable percentage’ 2 means 50 percent reduced (but not below 20 per- 3 cent) by 1 percentage point for each $2,000 (or frac- 4 tion thereof) by which the taxpayer’s adjusted gross 5 income for the taxable year exceeds $120,000.’’. 6 (b) INCREASE IN DOLLAR LIMIT ON AMOUNT CRED- 7 ITABLE.—Section 21(c) of such Code is amended— 8 (1) in paragraph (1), by striking ‘‘$3,000’’ and 9 inserting ‘‘$6,000’’, and 10 (2) in paragraph (2), by striking ‘‘$6,000’’ and 11 inserting ‘‘$12,000’’. 12 (c) SPECIAL RULE FOR MARRIED COUPLES FILING 13 SEPARATE RETURNS.—Section 21(e)(2) of such Code is 14 amended to read as follows: 15 ‘‘(2) MARRIED COUPLES FILING SEPARATE RE- 16 TURNS.— 17 ‘‘(A) IN GENERAL.—In the case of a mar- 18 ried individual who files a separate return for 19 a taxable year— 20 ‘‘(i) the limits under subsections (a) 21 and (c) shall be applied to the individual 22 and the individual’s spouse as if they had 23 filed a joint return, and 24 VerDate Sep 11 2014 01:35 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1967.IH H1967 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 1967 IH ‘‘(ii) the aggregate amount of the 1 credit allowed under this section for such 2 taxable year to both spouses shall not ex- 3 ceed the amount that would have been al- 4 lowed if the spouses had filed a joint re- 5 turn. 6 ‘‘(B) REGULATIONS.—The Secretary shall 7 prescribed such regulations or other guidance 8 as is necessary to carry out the purposes of this 9 subsection.’’. 10 (d) ADJUSTMENT FOR INFLATION.—Section 21 of 11 such Code is amended— 12 (1) by redesignating subsection (f) as sub- 13 section (g), and 14 (2) by inserting after subsection (e) the fol- 15 lowing new subsection: 16 ‘‘(f) INFLATION ADJUSTMENT.— 17 ‘‘(1) IN GENERAL.—In the case of a calendar 18 year beginning after 2020, the $120,000 amount in 19 paragraph (2) of subsection (a) and the dollar 20 amounts in subsection (c) shall each be increased by 21 an amount equal to— 22 ‘‘(A) such dollar amount, multiplied by 23 ‘‘(B) the cost-of-living adjustment deter- 24 mined under section 1(f)(3) for the calendar 25 VerDate Sep 11 2014 01:35 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1967.IH H1967 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 1967 IH year in which the taxable year begins, deter- 1 mined by substituting ‘calendar year 2019’ for 2 ‘calendar year 2016’ in subparagraph (A)(ii) 3 thereof. 4 ‘‘(2) ROUNDING.—If any dollar amount, after 5 being increased under paragraph (1), is not a mul- 6 tiple of $100, such dollar amount shall be rounded 7 to the next lowest multiple of $100.’’. 8 (e) CREDIT TO BE REFUNDABLE.— 9 (1) IN GENERAL.—The Internal Revenue Code 10 of 1986 is amended— 11 (A) by redesignating section 21 as section 12 36C, and 13 (B) by moving section 36C, as so redesig- 14 nated, from subpart A of part IV of subchapter 15 A of chapter 1 to the location immediately be- 16 fore section 37 in subpart C of part IV of sub- 17 chapter A of chapter 1. 18 (2) TECHNICAL AMENDMENT.— 19 (A) Section 23(f)(1) of the Internal Rev- 20 enue Code of 1986 is amended by striking 21 ‘‘21(e)’’ and inserting ‘‘36C(e)’’. 22 (B) Section 35(g)(6) of such Code is 23 amended by striking ‘‘21(e)’’ and inserting 24 ‘‘36C(e)’’. 25 VerDate Sep 11 2014 01:35 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1967.IH H1967 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 1967 IH (C) Section 36C(a)(1) of such Code (as re- 1 designated by paragraph (1)) is amended by 2 striking ‘‘this chapter’’ and inserting ‘‘this sub- 3 title’’. 4 (D) Section 129(a)(2)(C) of such Code is 5 amended by striking ‘‘section 21(e)’’ and insert- 6 ing ‘‘section 36C(e)’’. 7 (E) Section 129(b)(2) of such Code is 8 amended by striking ‘‘section 21(d)(2)’’ and in- 9 serting ‘‘section 36C(d)(2)’’. 10 (F) Section 129(e)(1) of such Code is 11 amended by striking ‘‘section 21(b)(2)’’ and in- 12 serting ‘‘section 36C(b)(2)’’. 13 (G) Section 213(e) of such Code is amend- 14 ed by striking ‘‘section 21’’ and inserting ‘‘sec- 15 tion 36C’’. 16 (H) Section 6213(g)(2)(H) of such Code is 17 amended by striking ‘‘section 21’’ and inserting 18 ‘‘section 36C’’. 19 (I) Section 6213(g)(2)(L) of such Code is 20 amended by striking ‘‘section 21, 24, or 32’’ 21 and inserting ‘‘section 24, 32, or 36C’’. 22 (J) Section 1324(b)(2) of title 31, United 23 States Code, is amended by inserting ‘‘36C,’’ 24 after ‘‘36B,’’. 25 VerDate Sep 11 2014 01:35 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1967.IH H1967 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 1967 IH (K) The table of sections for subpart C of 1 part IV of subchapter A of chapter 1 of the In- 2 ternal Revenue Code of 1986 is amended by in- 3 serting after the item relating to section 36B 4 the following: 5 ‘‘Sec. 36C. Expenses for household and dependent care services necessary for gainful employment.’’. (L) The table of sections for subpart A of 6 such part IV is amended by striking the item 7 relating to section 21. 8 (f) EFFECTIVE DATE.—The amendments made by 9 this section shall apply to taxable years beginning after 10 December 31, 2019. 11 Æ VerDate Sep 11 2014 01:35 Apr 11, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H1967.IH H1967 pamtmann on DSKBFK8HB2PROD with BILLS