Support Working Families Act

II 116TH CONGRESS 1ST SESSION S. 2437 To amend the Internal Revenue Code of 1986 to establish a refundable tax credit for parents who take leave from employment following the birth or adoption of a child. IN THE SENATE OF THE UNITED STATES AUGUST 1, 2019 Mr. YOUNG 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 establish a refundable tax credit for parents who take leave from employment following the birth or adoption of a child. 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 ‘‘Support Working 4 Families Act’’. 5 SEC. 2. PARENTAL LEAVE TAX CREDIT. 6 (a) IN GENERAL.—Subpart C of part IV of sub- 7 chapter A of chapter 1 of subtitle A of the Internal Rev- 8 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 2 •S 2437 IS enue Code of 1986 is amended by inserting after section 1 36B the following new section: 2 ‘‘SEC. 36C. PARENTAL LEAVE CREDIT. 3 ‘‘(a) ALLOWANCE OF CREDIT.— 4 ‘‘(1) IN GENERAL.—There shall be allowed as a 5 credit against the tax imposed by this subtitle for 6 the taxable year an amount equal to the sum of— 7 ‘‘(A) the current year parental leave credit, 8 plus 9 ‘‘(B) the parental leave credit carryback 10 carried to such taxable year. 11 ‘‘(2) CURRENT YEAR PARENTAL LEAVE CRED- 12 IT.— 13 ‘‘(A) IN GENERAL.—Subject to subpara- 14 graphs (B) and (C), the amount of the current 15 year parental leave credit for the taxable year 16 shall be equal to the product of— 17 ‘‘(i) the total number of weeks of pa- 18 rental leave taken during the benefit period 19 by an individual described in subsection 20 (c)(1)(A) which are completed within such 21 taxable year, multiplied by 22 ‘‘(ii) an amount equal to the replace- 23 ment percentage (as determined for each 24 week of parental leave pursuant to sub- 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 3 •S 2437 IS section (b)(1)) of the average weekly wage 1 rate for such individual. 2 ‘‘(B) LIMITATION.—The current year pa- 3 rental leave credit for any taxable year shall not 4 exceed the lesser of— 5 ‘‘(i) an amount equal to— 6 ‘‘(I) the amount determined 7 under subparagraph (A) (determined 8 as if the replacement percentage were 9 100 percent), minus 10 ‘‘(II) an amount equal to the 11 sum of any paid parental or medical 12 leave benefits which are provided to 13 the individual for any weeks included 14 under clause (i) of such subpara- 15 graph— 16 ‘‘(aa) pursuant to any law 17 or plan of a State or a political 18 subdivision thereof, or 19 ‘‘(bb) by the employer of 20 such individual, or 21 ‘‘(ii) $6,000. 22 ‘‘(C) REDUCTION IN BENEFIT AMOUNT ON 23 ACCOUNT OF RECEIPT OF CERTAIN BENE- 24 FITS.—The current year parental leave credit 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 4 •S 2437 IS for any taxable year (after application of sub- 1 paragraph (B)) shall be reduced by the amount, 2 if any, in certain benefits as may be otherwise 3 received by an individual for any weeks included 4 under subparagraph (A)(i). For purposes of the 5 preceding sentence, certain benefits include— 6 ‘‘(i) periodic benefits on account of 7 such individual’s total or partial disability 8 under a workmen’s compensation law or 9 plan of the United States or a State, 10 ‘‘(ii) periodic benefits on account of 11 an individual’s employment status under 12 an unemployment law or plan of the 13 United States or a State, and 14 ‘‘(iii) such other benefits as deter- 15 mined under regulations issued by the Sec- 16 retary. 17 ‘‘(3) PARENTAL LEAVE CREDIT CARRYBACK.— 18 In the case of an individual who elects not to apply 19 the current year parental leave credit to the taxable 20 year which includes the weeks of parental leave de- 21 scribed in subparagraph (A)(i), the amount of such 22 credit— 23 ‘‘(A) shall be reduced to zero for such tax- 24 able year, and 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 5 •S 2437 IS ‘‘(B) shall be a parental leave credit 1 carryback to the preceding taxable year. 2 ‘‘(b) DETERMINATION OF CREDIT AMOUNT.— 3 ‘‘(1) REPLACEMENT PERCENTAGE.—The re- 4 placement percentage shall be the amount, expressed 5 as a percentage, which has been elected by the indi- 6 vidual (in such manner and at such time as is pre- 7 scribed by the Secretary) for each week of parental 8 leave described in paragraph (2)(A)(i) of subsection 9 (a) for purposes of determining the credit allowed 10 under such subsection, provided that— 11 ‘‘(A) such amount is not less than 40 per- 12 cent and not greater than 90 percent, and 13 ‘‘(B) for each week of parental leave de- 14 scribed in paragraph (2)(A)(i) of subsection (a), 15 such amount does not result in a credit allowed 16 under such subsection that exceeds— 17 ‘‘(i) the average weekly wage rate for 18 such individual, minus 19 ‘‘(ii) any amounts described in para- 20 graph (2)(B)(i)(II) of such subsection 21 which are provided to the individual for 22 such week. 23 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 6 •S 2437 IS ‘‘(2) AVERAGE WEEKLY WAGE RATE.—The av- 1 erage weekly wage rate shall be an amount equal to 2 the greater of— 3 ‘‘(A) the annual average amount of the in- 4 dividual’s wages and self-employment income 5 for the period of the 3 calendar years preceding 6 the calendar year in which the parental leave is 7 taken by the individual, prorated on a weekly 8 basis, or 9 ‘‘(B) the amount of the individual’s wages 10 and self-employment income for the calendar 11 year preceding the calendar year in which the 12 parental leave is taken by the individual, pro- 13 rated on a weekly basis. 14 ‘‘(3) BENEFIT PERIOD.—The benefit period for 15 an individual shall be the period of weeks— 16 ‘‘(A) beginning with the latter of— 17 ‘‘(i) the first week in which the indi- 18 vidual satisfies the requirements under 19 subsection (c)(1)(A), or 20 ‘‘(ii) the first week— 21 ‘‘(I) in which the individual satis- 22 fies the requirements under such sub- 23 section, and 24 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 7 •S 2437 IS ‘‘(II) which is not less than 1 1 year after the completion of any pre- 2 vious benefit period, and 3 ‘‘(B) ending on the date that is 1 year 4 after the date of the birth or adoption of the 5 child. 6 ‘‘(c) ELIGIBILITY REQUIREMENTS.— 7 ‘‘(1) EMPLOYMENT.— 8 ‘‘(A) IN GENERAL.—An individual is de- 9 scribed in this subparagraph if, on the date of 10 the birth or adoption of the child, such indi- 11 vidual— 12 ‘‘(i) is a parent of the child, 13 ‘‘(ii) is employed and, during the 64- 14 week period preceding such date, has been 15 employed for not less than 52 weeks, and 16 ‘‘(iii) has worked not less than a total 17 of 1,000 hours during the 52-week period 18 described in clause (ii). 19 ‘‘(B) DETERMINATION OF EMPLOY- 20 MENT.—The Secretary, in consultation with the 21 Secretary of Labor, shall prescribe such regula- 22 tions, rules, and guidance as may be necessary 23 to determine the length of employment and 24 hours of service of an individual, including rules 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 8 •S 2437 IS for the application of this paragraph to individ- 1 uals who are not compensated on an hourly 2 basis. 3 ‘‘(2) ADDITIONAL INFORMATION.— 4 ‘‘(A) IN GENERAL.—No credit shall be al- 5 lowed under subsection (a) for any taxable year 6 unless the individual includes the following in- 7 formation on the return of tax for such taxable 8 year (or through the program established under 9 section 2(b) of the Support Working Families 10 Act): 11 ‘‘(i) An attestation from the individual 12 that such individual— 13 ‘‘(I) if the individual has an em- 14 ployer, has provided such employer 15 with written notice of the individual’s 16 intention to take parental leave, 17 ‘‘(II) has satisfied the require- 18 ments under clauses (ii) and (iii) of 19 paragraph (1)(A), 20 ‘‘(III) will be taking leave from 21 employment for each week of parental 22 leave taken during the benefit period, 23 and 24 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 9 •S 2437 IS ‘‘(IV) intends to maintain the 1 same principal place of abode as the 2 child for more than 1⁄2 of the 12- 3 month period following the date of the 4 birth or adoption of the child. 5 ‘‘(ii) Any information, as determined 6 necessary by the Secretary, regarding any 7 paid parental or medical leave benefits de- 8 scribed in subsection (a)(2)(B)(i)(II) which 9 are provided to the individual. 10 ‘‘(iii) The name of the child of the in- 11 dividual and the date of the birth or adop- 12 tion of the child. 13 ‘‘(iv) Subject to subparagraph (B), 14 the weeks of parental leave taken during 15 the benefit period. 16 ‘‘(v) The social security number of the 17 individual. 18 ‘‘(vi) Subject to subparagraph (C), the 19 social security number of the child. 20 ‘‘(vii) Subject to subparagraph (D), a 21 copy of the birth certificate or other docu- 22 mentation demonstrating that the indi- 23 vidual is the parent or legal guardian of 24 the child. 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 10 •S 2437 IS ‘‘(B) WEEKS OF PARENTAL LEAVE.—For 1 purposes of the credit allowed under subsection 2 (a)— 3 ‘‘(i) any weeks of parental leave taken 4 during the benefit period for which such 5 credit is being claimed shall be a full work- 6 week, and 7 ‘‘(ii) the total number of weeks of pa- 8 rental leave taken by an individual during 9 the benefit period shall not be less than 4 10 weeks or greater than 12 weeks. 11 ‘‘(C) SOCIAL SECURITY NUMBER.— 12 ‘‘(i) ADOPTION.— 13 ‘‘(I) IN GENERAL.—In the case 14 of an individual who legally adopts a 15 child, if such child has not received a 16 social security number at the time of 17 the filing of the return of tax de- 18 scribed in subparagraph (A), the par- 19 ent of such child may be allowed the 20 credit under subsection (a), provided 21 that— 22 ‘‘(aa) the Adoption Tax- 23 payer Identification Number for 24 such child is included on the re- 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 11 •S 2437 IS turn of tax described in subpara- 1 graph (A), and 2 ‘‘(bb) the social security 3 number for such child is provided 4 to the Secretary not later than 5 15 months after the date of the 6 adoption of such child. 7 ‘‘(II) NOTICE.—In the case of a 8 child described in subclause (I), the 9 Secretary shall provide notice of the 10 requirement under item (bb) of such 11 subclause to the parent of such 12 child— 13 ‘‘(aa) at the time that the 14 credit allowed under subsection 15 (a) is refunded or otherwise pro- 16 vided to such parent, and 17 ‘‘(bb) on the date that is 12 18 months after the date of the 19 adoption of such child. 20 ‘‘(III) RESCISSION.— 21 ‘‘(aa) IN GENERAL.—In the 22 case of an individual who is the 23 parent of a child described in 24 subclause (I) and subsequently 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 12 •S 2437 IS fails to provide a social security 1 number for such child to the Sec- 2 retary during the period de- 3 scribed in subclause (II)(bb), the 4 tax imposed by this chapter for 5 the applicable taxable year shall 6 be increased by 100 percent of 7 the amount of the credit allowed 8 under subsection (a) to such indi- 9 vidual for any parental leave 10 claimed with respect to such 11 child. 12 ‘‘(bb) APPLICABLE TAXABLE 13 YEAR.—The term ‘applicable tax- 14 able year’ means the taxable year 15 which includes the date that is 16 15 months after the date of the 17 adoption of the child. 18 ‘‘(ii) RELIGIOUS OBJECTIONS.—The 19 Secretary, in coordination with the Com- 20 missioner of Social Security, shall prescribe 21 such regulations, rules, and guidance as 22 may be necessary to apply the require- 23 ments under this paragraph relating to so- 24 cial security numbers for individuals who 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 13 •S 2437 IS have religious objections to obtaining a so- 1 cial security number for themselves or 2 their children. 3 ‘‘(D) BIRTH CERTIFICATE OR OTHER DOC- 4 UMENTATION.— 5 ‘‘(i) IN GENERAL.—In the case of a 6 parent who has not received the certificate 7 or documentation described in clause (vii) 8 of subparagraph (A) for their child at the 9 time of the filing of the return of tax de- 10 scribed in such subparagraph, the parent 11 may be allowed the credit under subsection 12 (a), provided that such certificate or docu- 13 mentation is provided to the Secretary not 14 later than 15 months after the date of the 15 birth or adoption of such child. 16 ‘‘(ii) NOTICE AND RESCISSION.— 17 Rules similar to the rules of subclauses 18 (II) and (III) of subparagraph (C)(i) shall 19 apply for purposes of this subparagraph. 20 ‘‘(3) INELIGIBILITY; DISQUALIFICATION.— 21 ‘‘(A) INELIGIBILITY FOR BENEFIT.—No 22 credit shall be allowed under subsection (a) for 23 any taxable year during which the individual is 24 entitled to— 25 VerDate Sep 11 2014 23:29 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S2437.IS S2437 kjohnson on DSK79L0C42 with BILLS 14 •S 2437 IS ‘‘(i) disability insurance benefits 1 under section 223 of the Social Security 2 Act (42 U.S.C. 423) or a similar perma- 3 nent disability program under any law or 4 plan of a State or political subdivision or 5 instrumentality of a State (as such terms 6 are used in section 218 of the Social Secu- 7 rity Act (42 U.S.C. 418)), 8 ‘‘(ii) monthly insurance benefits under 9 section 202 of such Act (42 U.S.C. 402) 10 based on such individual’s disa [Text truncated for display. 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