Special Needs Tax Credit Act

I 116TH CONGRESS 2D SESSION H. R. 6048 To amend the Internal Revenue Code of 1986 to provide a credit to individ- uals for legal expenses paid with respect to establishing guardianship of a family member with disabilities. IN THE HOUSE OF REPRESENTATIVES MARCH 2, 2020 Mr. DEUTCH 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 provide a credit to individuals for legal expenses paid with re- spect to establishing guardianship of a family member with disabilities. 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 ‘‘Special Needs Tax 4 Credit Act’’. 5 VerDate Sep 11 2014 20:48 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6048.IH H6048 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6048 IH SEC. 2. CREDIT FOR LEGAL EXPENSES PAID WITH RESPECT 1 TO ESTABLISHING GUARDIANSHIP OF A FAM- 2 ILY MEMBER WITH DISABILITIES. 3 (a) IN GENERAL.—Subpart C of part IV of sub- 4 chapter A of chapter 1 of the Internal Revenue Code of 5 1986 (relating to refundable credits) is amended by insert- 6 ing after section 36B the following new section: 7 ‘‘SEC. 36C. CREDIT FOR LEGAL EXPENSES PAID WITH RE- 8 SPECT TO ESTABLISHING GUARDIANSHIP OF 9 A FAMILY MEMBER WITH DISABILITIES. 10 ‘‘(a) IN GENERAL.—In the case of an individual, 11 there shall be allowed as a credit against the tax imposed 12 by this subtitle an amount equal to the qualified legal 13 guardianship expenses paid or incurred by the taxpayer 14 during the taxable year. 15 ‘‘(b) DOLLAR LIMITATION.—The credit allowed 16 under subsection (a) to any taxpayer with respect to any 17 family member with disabilities for any taxable year shall 18 not exceed the excess of— 19 ‘‘(1) $5,000, over 20 ‘‘(2) the aggregate amount allowed as credit 21 under subsection (a) to such taxpayer with respect 22 to such family member with disabilities for all prior 23 taxable years. 24 ‘‘(c) PHASEOUT BASED ON ADJUSTED GROSS IN- 25 COME.—The dollar limitation applicable under subsection 26 VerDate Sep 11 2014 20:48 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6048.IH H6048 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6048 IH (b) shall be reduced by the amount which bears the same 1 ratio to such dollar limitation (determined without regard 2 to this subsection) as— 3 ‘‘(1) the excess of— 4 ‘‘(A) the taxpayer’s adjusted gross income, 5 over 6 ‘‘(B) $50,000 (twice such amount in the 7 case of a joint return), bears to 8 ‘‘(2) $10,000 (twice such amount in the case of 9 a joint return). 10 ‘‘(d) QUALIFIED LEGAL GUARDIANSHIP EX- 11 PENSES.—For purposes of this section, the term ‘qualified 12 legal guardianship expenses’ means amounts paid or in- 13 curred by an individual as legal expenses in establishing 14 such individual as the legal guardian of a family member 15 with disabilities. 16 ‘‘(e) FAMILY MEMBER WITH DISABILITIES.—For 17 purposes of this section, the term ‘family member with dis- 18 abilities’ means, with respect to any taxpayer, any indi- 19 vidual who— 20 ‘‘(1) bears a relationship to the taxpayer de- 21 scribed in section 152(d)(2) (other than subpara- 22 graph (H) thereof), and 23 ‘‘(2) is disabled (within the meaning of section 24 1614(a)(3) of the Social Security Act).’’. 25 VerDate Sep 11 2014 20:48 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6048.IH H6048 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6048 IH (b) CONFORMING AMENDMENTS.— 1 (1) Section 6211(b)(4)(A) of such Code is 2 amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 3 (2) Section 1324(b)(2) of title 31, United 4 States Code, is amended by inserting ‘‘36C,’’ after 5 ‘‘36B,’’. 6 (3) The table of sections for subpart C of part 7 IV of subchapter A of chapter 1 of the Internal Rev- 8 enue Code of 1986 is amended by inserting after the 9 item relating to section 36B the following new item: 10 ‘‘Sec. 36C. Credit for legal expenses paid with respect to establishing guardian- ship of a family member with disabilities.’’. (c) EFFECTIVE DATE.—The amendments made by 11 this section shall apply to taxable years beginning after 12 the date of the enactment of this Act. 13 Æ VerDate Sep 11 2014 20:48 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H6048.IH H6048 pamtmann on DSKBC07HB2PROD with BILLS