American Family Act

I 118TH CONGRESS 1ST SESSION H. R. 3899 To amend the Internal Revenue Code of 1986 to establish a refundable child tax credit with monthly advance payment. IN THE HOUSE OF REPRESENTATIVES JUNE 7, 2023 Ms. DELAURO (for herself, Ms. DELBENE, Mr. TORRES of New York, Ms. BONAMICI, Ms. BARRAGA´N, Mr. MCGOVERN, Mr. LARSON of Connecticut, Ms. JACOBS, Ms. VELA´ZQUEZ, Ms. WILSON of Florida, Mrs. WATSON COLEMAN, Mr. SCHIFF, Mr. MULLIN, Ms. CHU, Mrs. BEATTY, Mr. GOMEZ, Mrs. CHERFILUS-MCCORMICK, Ms. TITUS, Mr. BOWMAN, Ms. OCASIO-CORTEZ, Mr. SWALWELL, Ms. TOKUDA, Ms. BALINT, Mr. TONKO, Mr. NADLER, Ms. MOORE of Wisconsin, Ms. SCANLON, Mr. PA- NETTA, Ms. DEAN of Pennsylvania, Ms. HOYLE of Oregon, Mr. GRI- JALVA, Mr. PAYNE, Mr. MORELLE, Ms. PINGREE, Ms. NORTON, Mr. HUFFMAN, Ms. CLARKE of New York, Mr. FOSTER, Ms. WILLIAMS of Georgia, Mr. POCAN, Mr. DOGGETT, Mrs. MCCLELLAN, Mr. KILDEE, Ms. MENG, Ms. BUDZINSKI, Mr. HIGGINS of New York, Mr. GARCI´A of Illi- nois, Mr. MAGAZINER, Mr. RASKIN, Mr. VEASEY, Mr. EVANS, Mr. NOR- CROSS, Mr. DESAULNIER, Mr. COURTNEY, Mr. KIM of New Jersey, Mr. JOHNSON of Georgia, Mr. ROBERT GARCIA of California, Ms. ROSS, Ms. LEE of California, Ms. OMAR, Mr. FROST, Mr. LEVIN, Mr. DAVIS of Illi- nois, Mr. CASAR, Mrs. FOUSHEE, Ms. GARCIA of Texas, Ms. KELLY of Illinois, Mr. MCGARVEY, Mr. GREEN of Texas, Ms. SCHAKOWSKY, Ms. UNDERWOOD, Mr. GOLDMAN of New York, Ms. BUSH, Mr. CASTEN, Ms. LEE of Pennsylvania, Mr. CA´RDENAS, Ms. SA´NCHEZ, Mr. DELUZIO, Mr. SHERMAN, Ms. CASTOR of Florida, Mr. VARGAS, Ms. SEWELL, Ms. STRICKLAND, Mr. HORSFORD, Mr. SMITH of Washington, Mr. THANEDAR, Mr. BLUMENAUER, Mr. KILMER, Ms. KAPTUR, Mr. PAL- LONE, Ms. KUSTER, Ms. BROWNLEY, Mr. LYNCH, Mr. KEATING, Ms. JAYAPAL, Mr. LANDSMAN, Mr. SARBANES, Mrs. PELTOLA, Ms. LOIS FRANKEL of Florida, Mr. PASCRELL, Ms. STANSBURY, Mrs. HAYES, Ms. SCHRIER, Ms. WATERS, Mr. CARSON, Mr. IVEY, Mr. BOYLE of Pennsyl- vania, Ms. PLASKETT, Mr. SOTO, Ms. SLOTKIN, Mrs. SYKES, Ms. STE- VENS, Mr. LARSEN of Washington, Ms. PORTER, Ms. CRAIG, Mr. MENENDEZ, Ms. PETTERSEN, Mr. SCHNEIDER, Mr. MOSKOWITZ, Mr. NICKEL, Ms. PELOSI, Mr. KHANNA, Mr. CLEAVER, Ms. CROCKETT, Ms. WEXTON, Ms. SALINAS, Mr. PHILLIPS, Mr. MOULTON, Mr. SABLAN, Mr. CARTER of Louisiana, Ms. BROWN, Mr. SORENSEN, Mrs. MCBATH, Mr. VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 3899 IH TRONE, Ms. MCCOLLUM, Ms. LOFGREN, Mr. CASTRO of Texas, Mrs. FLETCHER, Mr. GARAMENDI, Mr. CARBAJAL, Ms. LEGER FERNANDEZ, Ms. TLAIB, Mr. BEYER, Mrs. TRAHAN, Mr. HIMES, Mr. COSTA, Ms. ESCOBAR, Mrs. NAPOLITANO, Mr. RUPPERSBERGER, Mr. JEFFRIES, Ms. ESHOO, Mr. BISHOP of Georgia, Mr. SCOTT of Virginia, Mrs. DINGELL, Mr. QUIGLEY, Mr. GALLEGO, Ms. BLUNT ROCHESTER, Mr. DAVIS of North Carolina, Mr. CLYBURN, Mr. AGUILAR, Ms. CLARK of Massachu- setts, Ms. SCHOLTEN, Ms. ADAMS, Ms. SHERRILL, Mr. JACKSON of Illi- nois, Ms. KAMLAGER-DOVE, Mrs. RAMIREZ, Mr. THOMPSON of Mis- sissippi, Mr. MEEKS, Mrs. TORRES of California, Mr. CARTWRIGHT, Mr. MFUME, Mr. CONNOLLY, Mr. VASQUEZ, Ms. WILD, Ms. MATSUI, Mr. MRVAN, Mr. TAKANO, Ms. JACKSON LEE, Mr. HOYER, Mr. CASE, Mr. CORREA, Mr. CROW, Mr. CUELLAR, Ms. DEGETTE, Ms. HOULAHAN, Mr. LIEU, Mr. RYAN, Ms. WASSERMAN SCHULTZ, Mr. GOTTHEIMER, Mr. COHEN, Mr. RUIZ, Mr. JACKSON of North Carolina, Mr. PAPPAS, Mr. PETERS, Mr. VICENTE GONZALEZ of Texas, Mr. NEGUSE, Ms. PEREZ, Mr. AUCHINCLOSS, Mr. KRISHNAMOORTHI, Ms. CARAVEO, Ms. MANNING, Ms. SPANBERGER, Mr. BERA, Mr. ESPAILLAT, Ms. LEE of Nevada, Ms. PRESSLEY, and Mr. ALLRED) introduced the following bill; which was re- ferred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to establish a refundable child tax credit with monthly advance payment. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘American Family Act’’. 4 SEC. 2. ESTABLISHMENT OF REFUNDABLE CHILD TAX 5 CREDIT WITH MONTHLY ADVANCE PAYMENT. 6 (a) IN GENERAL.—Subpart A of part IV of sub- 7 chapter A of chapter 1 of the Internal Revenue Code of 8 1986 is amended by inserting after section 24 the fol- 9 lowing new sections: 10 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 3899 IH ‘‘SEC. 24A. MONTHLY CHILD TAX CREDIT. 1 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al- 2 lowed as a credit against the tax imposed by this chapter 3 for the taxable year the sum of the monthly specified child 4 allowances determined with respect to the taxpayer under 5 subsection (b) for each calendar month during such tax- 6 able year. 7 ‘‘(b) MONTHLY SPECIFIED CHILD ALLOWANCE.— 8 ‘‘(1) IN GENERAL.—For purposes of this sec- 9 tion, the term ‘monthly specified child allowance’ 10 means, with respect to any taxpayer for any cal- 11 endar month, the sum of— 12 ‘‘(A) $250, with respect to each specified 13 child of such taxpayer who will (as of the close 14 of such month) have attained age 6, plus 15 ‘‘(B) 120 percent of the dollar amount in 16 effect for such month under subparagraph (A), 17 with respect to each specified child of such tax- 18 payer who will not (as of the close of such 19 month) have attained age 6. 20 In the case of any specified child of such taxpayer 21 who will not (as of the close of such month) have at- 22 tained the age of 1 month, subparagraph (B) shall 23 be applied by substituting ‘800 percent’ for ‘120 24 percent’. 25 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 3899 IH ‘‘(2) LIMITATIONS BASED ON MODIFIED AD- 1 JUSTED GROSS INCOME.— 2 ‘‘(A) INITIAL REDUCTION.—The monthly 3 specified child allowance otherwise determined 4 under paragraph (1) with respect to any tax- 5 payer for any calendar month shall be reduced 6 (but not below zero) by 1⁄12 of 5 percent of the 7 excess (if any) of the taxpayer’s modified ad- 8 justed gross income for the applicable taxable 9 year over the initial threshold amount in effect 10 for such applicable taxable year. 11 ‘‘(B) LIMITATION ON INITIAL REDUC- 12 TION.—In the case of any calendar month be- 13 ginning before January 1, 2026, the amount of 14 the reduction under subparagraph (A) shall not 15 exceed the lesser of— 16 ‘‘(i) the excess (if any) of— 17 ‘‘(I) the monthly specified child 18 allowance with respect to the taxpayer 19 for such calendar month (determined 20 without regard to this paragraph), 21 over 22 ‘‘(II) the amount which would be 23 determined under subclause (I) if the 24 dollar amounts in effect under sub- 25 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 3899 IH paragraphs (A) and (B) of paragraph 1 (1) were each equal to $166.67, or 2 ‘‘(ii) 1⁄12 of 5 percent of the excess of 3 the secondary threshold amount over the 4 initial threshold amount. 5 ‘‘(C) SECONDARY REDUCTION.—In the 6 case of any calendar month beginning before 7 January 1, 2026, the monthly specified child al- 8 lowance otherwise determined under paragraph 9 (1) with respect to any taxpayer for such cal- 10 endar month (determined after the application 11 of subparagraphs (A) and (B)) shall be reduced 12 (but not below zero) by 1⁄12 of 5 percent of the 13 excess (if any) of the taxpayer’s modified ad- 14 justed gross income for the applicable taxable 15 year over the secondary threshold amount. 16 ‘‘(D) DEFINITIONS RELATED TO LIMITA- 17 TIONS BASED ON MODIFIED ADJUSTED GROSS 18 INCOME.—For purposes of this paragraph— 19 ‘‘(i) INITIAL THRESHOLD AMOUNT.— 20 The term ‘initial threshold amount’ 21 means— 22 ‘‘(I) $150,000, in the case of a 23 joint return or surviving spouse (as 24 defined in section 2(a)), 25 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 3899 IH ‘‘(II) 1⁄2 the dollar amount in ef- 1 fect under subclause (I), in the case of 2 a married individual filing a separate 3 return, and 4 ‘‘(III) $112,500, in any other 5 case. 6 ‘‘(ii) SECONDARY THRESHOLD 7 AMOUNT.—The term ‘secondary threshold 8 amount’ means— 9 ‘‘(I) $400,000, in the case of a 10 joint return or surviving spouse (as 11 defined in section 2(a)), 12 ‘‘(II) $300,000, in the case of a 13 head of household (as defined in sec- 14 tion 2(b)), and 15 ‘‘(III) $200,000, in any other 16 case. 17 ‘‘(iii) APPLICABLE TAXABLE YEAR.— 18 The term ‘applicable taxable year’ means, 19 with respect to any taxable year for which 20 the credit under this section is deter- 21 mined— 22 ‘‘(I) such taxable year, or 23 ‘‘(II) if the taxpayer elects the 24 application of this subclause (at such 25 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 3899 IH time and in such form and manner as 1 the Secretary may provide), the pre- 2 ceding taxable year or the second pre- 3 ceding taxable year (as specified in 4 such election). 5 ‘‘(iv) MODIFIED ADJUSTED GROSS IN- 6 COME.—The term ‘modified adjusted gross 7 income’ means adjusted gross income in- 8 creased by any amount excluded from 9 gross income under section 911, 931, or 10 933. 11 ‘‘(3) INFLATION ADJUSTMENTS.— 12 ‘‘(A) MONTHLY SPECIFIED CHILD ALLOW- 13 ANCE.—In the case of any month beginning 14 after December 31, 2023, the $250 amount in 15 paragraph (1)(A) shall be increased by an 16 amount equal to— 17 ‘‘(i) such dollar amount, multiplied 18 by— 19 ‘‘(ii) the percentage (if any) by 20 which— 21 ‘‘(I) the CPI (as defined in sec- 22 tion 1(f)(4)) for the calendar year 23 preceding the calendar year in which 24 such month begins, exceeds 25 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 3899 IH ‘‘(II) the CPI (as so defined) for 1 calendar year 2020. 2 ‘‘(B) INITIAL THRESHOLD AMOUNT.—In 3 the case of any taxable year beginning after De- 4 cember 31, 2023, the dollar amounts in sub- 5 clauses (I) and (III) of paragraph (2)(D)(i) 6 shall each be increased by an amount equal 7 to— 8 ‘‘(i) such dollar amount, multiplied by 9 ‘‘(ii) the percentage (if any) which 10 would be determined under subparagraph 11 (A)(ii) if subclause (II) thereof were ap- 12 plied by substituting ‘2022’ for ‘2020’. 13 ‘‘(C) ROUNDING.— 14 ‘‘(i) MONTHLY SPECIFIED CHILD AL- 15 LOWANCE.—Any increase under subpara- 16 graph (A) which is not a multiple of $10 17 shall be rounded to the nearest multiple of 18 $10. 19 ‘‘(ii) INITIAL THRESHOLD AMOUNT.— 20 Any increase under subparagraph (B) 21 which is not a multiple of $5,000 shall be 22 rounded to the nearest multiple of $5,000. 23 ‘‘(c) SPECIFIED CHILD.—For purposes of this sec- 24 tion— 25 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 3899 IH ‘‘(1) IN GENERAL.—The term ‘specified child’ 1 means, with respect to any taxpayer for any cal- 2 endar month, an individual— 3 ‘‘(A) who has the same principal place of 4 abode as the taxpayer for more than one-half of 5 such month, 6 ‘‘(B) who is younger than the taxpayer and 7 will not, as of the close of such month, have at- 8 tained age 18, 9 ‘‘(C) who receives care from the taxpayer 10 during such month that is not compensated, 11 ‘‘(D) who is not the spouse of the taxpayer 12 at any time during such month, and 13 ‘‘(E) who either— 14 ‘‘(i) is a citizen, national, or resident 15 of the United States, or 16 ‘‘(ii) if the taxpayer is a citizen or na- 17 tional of the United States, such individual 18 is described in section 152(f)(1)(B) with 19 respect to such taxpayer. 20 ‘‘(2) CERTAIN INDIVIDUALS INELIGIBLE.—In 21 the case of an individual who is a specified child 22 with respect to another taxpayer for any calendar 23 month, such individual shall be treated for such cal- 24 endar month as having no specified children. 25 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 3899 IH ‘‘(3) CARE FROM THE TAXPAYER.— 1 ‘‘(A) IN GENERAL.—Except as otherwise 2 provided by the Secretary, whether any indi- 3 vidual receives care from the taxpayer (within 4 the meaning of paragraph (1)(C)) shall be de- 5 termined on the basis of facts and cir- 6 cumstances with respect to the following fac- 7 tors: 8 ‘‘(i) The supervision provided by the 9 taxpayer regarding the daily activities and 10 needs of the individual. 11 ‘‘(ii) The maintenance by the taxpayer 12 of a secure environment at which the indi- 13 vidual resides. 14 ‘‘(iii) The provision or arrangement by 15 the taxpayer of, and transportation by the 16 taxpayer to, medical care at regular inter- 17 vals and as required for the individual. 18 ‘‘(iv) The involvement by the taxpayer 19 in, and financial and other support by the 20 taxpayer for, educational or similar activi- 21 ties of the individual. 22 ‘‘(v) Any other factor that the Sec- 23 retary determines to be appropriate to de- 24 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 3899 IH termine whether the individual receives 1 care from the taxpayer. 2 ‘‘(B) DETERMINATION OF WHETHER CARE 3 IS COMPENSATED.—For purposes of deter- 4 mining if care is compensated within the mean- 5 ing of paragraph (1)(C), compensation from the 6 Federal Government, a State or local govern- 7 ment, a Tribal government, or any possession of 8 the United States shall not be taken into ac- 9 count. 10 ‘‘(4) APPLICATION OF TIE-BREAKER RULES.— 11 ‘‘(A) IN GENERAL.—Except as provided in 12 subparagraph (D), if any individual would (but 13 for this paragraph) be a specified child of 2 or 14 more taxpayers for any month, such individual 15 shall be treated as the specified child only of 16 the taxpayer who is— 17 ‘‘(i) the parent of the individual (or, if 18 such individual would (but for this para- 19 graph) be a specified child of 2 or more 20 parents of the individual for such month, 21 the parent of the individual determined 22 under subparagraph (B)), 23 ‘‘(ii) if the individual is not a specified 24 child of any parent of the individual (deter- 25 VerDate Sep 11 2014 06:44 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899 pbinns on DSKJLVW7X2PROD with $$_JOB [Text truncated for display. 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