Tax Relief for Families Suffering from Government-Mandated Shutdowns Act

II 116TH CONGRESS 2D SESSION S. 4488 To amend the Internal Revenue Code of 1986 to allow deductions for unreim- bursed business expenses, dependent care expenses, and elementary school education expenses, and for other purposes. IN THE SENATE OF THE UNITED STATES AUGUST 6, 2020 Mr. PAUL 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 allow deduc- tions for unreimbursed business expenses, dependent care expenses, and elementary school education expenses, 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 ‘‘Tax Relief for Families 4 Suffering from Government-Mandated Shutdowns Act’’. 5 VerDate Sep 11 2014 19:13 Aug 26, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4488.IS S4488 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4488 IS SEC. 2. TREATMENT OF DEDUCTION FOR CERTAIN BUSI- 1 NESS EXPENSES. 2 (a) IN GENERAL.—Section 62(a)(1) of the Internal 3 Revenue Code of 1986 is amended by striking ‘‘, if such 4 trade or business does not consist of the performance of 5 services by the taxpayer as an employee’’. 6 (b) CONFORMING AMENDMENTS.— 7 (1) Section 62 of the Internal Revenue Code of 8 1986 is amended— 9 (A) in subsection (a), by striking para- 10 graph (2), and 11 (B) by striking subsections (b), (c), and 12 (d) and redesignating subsections (e) and (f) as 13 subsections (c) and (d), respectively. 14 (2) Section 162(o) of such Code is amended— 15 (A) in paragraph (1)— 16 (i) by striking ‘‘such services’’ and all 17 that follows through ‘‘allowable as a deduc- 18 tion’’ and inserting ‘‘such services, the 19 amount allowable as a deduction’’, 20 (ii) by striking ‘‘; and’’ and inserting 21 a period, and 22 (iii) by striking subparagraph (B), 23 and 24 (B) by striking paragraph (2) and redesig- 25 nating paragraph (3) as paragraph (2). 26 VerDate Sep 11 2014 19:13 Aug 26, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4488.IS S4488 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4488 IS (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 December 31, 2019. 3 SEC. 3. DEDUCTION FOR CHILD AND DEPENDENT CARE EX- 4 PENSES. 5 (a) IN GENERAL.—Part VII of subchapter B of chap- 6 ter 1 of the Internal Revenue Code of 1986 is amended 7 by redesignating section 224 as section 225 and by insert- 8 ing after section 223 the following new section: 9 ‘‘SEC. 224. HOUSEHOLD AND DEPENDENT CARE SERVICES 10 NECESSARY FOR GAINFUL EMPLOYMENT. 11 ‘‘(a) IN GENERAL.—In the case of an individual, 12 there shall be allowed as a deduction an amount equal to 13 the employment-related expenses (as defined in section 14 21(b)(2)) paid by such individual during the taxable year. 15 ‘‘(b) COORDINATION WITH OTHER BENEFITS.—For 16 purposes of subsection (a), there shall not be taken into 17 account any expenses— 18 ‘‘(1) which were excluded from gross income 19 under section 129 for the taxable year, or 20 ‘‘(2) which were taken into account in deter- 21 mining the amount of the credit allowed under sec- 22 tion 21 for the taxable year.’’. 23 VerDate Sep 11 2014 19:13 Aug 26, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4488.IS S4488 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4488 IS (b) TREATMENT OF DEDUCTION.—Section 62(a) of 1 the Internal Revenue Code of 1986 is amended by insert- 2 ing after paragraph (22) the following new paragraph: 3 ‘‘(23) HOUSEHOLD AND DEPENDENT CARE 4 SERVICES.—The deduction under section 224.’’. 5 (c) ELECTION WITH RESPECT TO CREDIT.—Section 6 21(e) of such Code is amended by adding at the end the 7 following new paragraph: 8 ‘‘(11) ELECTION TO DISREGARD EXPENDI- 9 TURES.—Under such rules, and in such form and 10 manner, as the Secretary may provide, a taxpayer 11 may elect not to have this section apply with respect 12 to any amount of employment-related expenses de- 13 termined by the taxpayer.’’. 14 (d) CLERICAL AMENDMENT.—The table of section 3 15 for part VII of subchapter B of chapter 1 of such Code 16 is amended by redesignating the item relating to section 17 224 as relating to section 225 and by inserting after the 18 item relating to section 223 the following new item: 19 ‘‘Sec. 224. Household and dependent care services necessary for gainful em- ployment.’’. (e) EFFECTIVE DATE.—The amendments made by 20 this section shall apply to taxable years beginning after 21 December 31, 2019. 22 VerDate Sep 11 2014 20:24 Aug 27, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4488.IS S4488 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4488 IS SEC. 4. DEDUCTION FOR ELEMENTARY AND SECONDARY 1 SCHOOL EXPENSES. 2 (a) IN GENERAL.—Part VII of subchapter B of chap- 3 ter 1 of the Internal Revenue Code of 1986, as amended 4 by section 3, is amended by redesignating section 225 as 5 section 226 and by inserting after section 224 the fol- 6 lowing new section: 7 ‘‘SEC. 225. ELEMENTARY AND SECONDARY SCHOOL EX- 8 PENSES. 9 ‘‘(a) IN GENERAL.—In the case of an individual, 10 there shall be allowed as a deduction an amount equal to 11 the sum of— 12 ‘‘(1) the eligible elementary and secondary 13 school tuition and related expenses paid by such in- 14 dividual during the taxable year, plus 15 ‘‘(2) so much of the eligible elementary and sec- 16 ondary qualified expenses paid by such individual 17 during the taxable year as does not exceed $1,000. 18 ‘‘(b) DEFINITIONS.—For purposes of this section— 19 ‘‘(1) ELIGIBLE ELEMENTARY AND SECONDARY 20 SCHOOL TUITION AND RELATED EXPENSES.—The 21 term ‘eligible elementary and secondary school tui- 22 tion and related expenses’ means, with respect to 23 any dependent of the taxpayer— 24 ‘‘(A) expenses for tuition, fees, academic 25 tutoring, special needs services in the case of a 26 VerDate Sep 11 2014 19:13 Aug 26, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4488.IS S4488 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 4488 IS special needs individual, which are incurred in 1 connection with the enrollment or attendance of 2 such dependent of the taxpayer as an elemen- 3 tary or secondary school student at a public, 4 private, or religious school, and 5 ‘‘(B) expenses for room and board, uni- 6 forms, transportation, and supplementary items 7 and services (including extended day programs) 8 which are required or provided by a public, pri- 9 vate, or religious school in connection with such 10 enrollment or attendance. 11 ‘‘(2) ELIGIBLE ELEMENTARY AND SECONDARY 12 QUALIFIED EXPENSES.—The term ‘eligible elemen- 13 tary and secondary qualified expenses’ means, with 14 respect to any dependent of the taxpayer— 15 ‘‘(A) expenses for books, supplies, and 16 other equipment which are incurred in connec- 17 tion with the enrollment or attendance of such 18 dependent as an elementary or secondary school 19 student at a public, private, or religious school, 20 and 21 ‘‘(B) expenses for the purchase of any 22 computer technology or equipment or internet 23 access and related services, if such technology, 24 equipment, or services are to be used by such 25 VerDate Sep 11 2014 19:13 Aug 26, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4488.IS S4488 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 4488 IS dependent or the taxpayer, the taxpayer’s 1 spouse, or any other dependent of the taxpayer 2 during any of the years such dependent is in 3 school. 4 ‘‘(3) SCHOOL.—The term ‘school’ means any 5 school (including a homeschool) which provides ele- 6 mentary education or secondary education (kinder- 7 garten through grade 12), as determined under 8 State law. 9 ‘‘(4) COMPUTER TECHNOLOGY OR EQUIP- 10 MENT.—The term ‘computer technology or equip- 11 ment’ means computer software (as defined by sec- 12 tion 197(e)(3)(B)), computer or peripheral equip- 13 ment (as defined by section 168(i)(2)(B)), and fiber 14 optic cable related to computer use. 15 ‘‘(c) COORDINATION WITH OTHER BENEFITS.—For 16 purposes of subsection (a), there shall not be taken into 17 account any expenses which are not included in income 18 under section 529 or 530.’’. 19 (b) TREATMENT OF DEDUCTION.—Section 62(a) of 20 the Internal Revenue Code of 1986, as amended by section 21 3, is amended by inserting after paragraph (23) the fol- 22 lowing new paragraph: 23 ‘‘(24) ELEMENTARY AND SECONDARY SCHOOL 24 EXPENSES.—The deduction under section 225.’’. 25 VerDate Sep 11 2014 19:13 Aug 26, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4488.IS S4488 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 4488 IS (c) CLERICAL AMENDMENT.—The table of section 3 1 for part VII of subchapter B of chapter 1 of such Code, 2 as amended by section 3, is amended by redesignating the 3 item relating to section 225 as relating to section 226 and 4 by inserting after the item relating to section 224 the fol- 5 lowing new item: 6 ‘‘Sec. 225. Elementary and secondary school expenses.’’. (d) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to taxable years beginning after 8 December 31, 2019. 9 SEC. 5. DEDUCTION FOR CERTAIN INTERNET EXPENSES IN 10 2020. 11 (a) IN GENERAL.—Section 62(a) of the Internal Rev- 12 enue Code of 1986, as amended by sections 3 and 4, is 13 amended by inserting after paragraph (24) the following 14 new paragraph: 15 ‘‘(25) INTERNET EXPENSES.—In the case of 16 taxable years beginning in 2020, the amount (not to 17 exceed $500) of expenses paid or incurred for access 18 to the internet (including data charges).’’. 19 (b) EFFECTIVE DATE.—The amendments made by 20 this section shall apply to taxable years beginning after 21 December 31, 2019. 22 Æ VerDate Sep 11 2014 20:24 Aug 27, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S4488.IS S4488 pamtmann on DSKBC07HB2PROD with BILLS