To amend the Internal Revenue Code of 1986 to modify and make refundable the credit for expenses for household and dependent care services necessary for gainful employment.

Amends the Internal Revenue Code to revise the tax credit for household and dependent care services necessary for gainful employment by: (1) allowing a credit amount of $3,000 for each qualifying individual; (2) increasing to $125,000 the adjusted gross income threshold amount at which credit amounts are reduced; (3) providing for an inflation adjustment to such credit and threshold amounts; and (4) making the credit refundable.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2249 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 2249

     To amend the Internal Revenue Code of 1986 to modify and make 
  refundable the credit for expenses for household and dependent care 
               services necessary for gainful employment.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 11, 2005

  Mr. Porter 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 modify and make 
  refundable the credit for expenses for household and dependent care 
               services necessary for gainful employment.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REFUNDABLE CREDIT FOR EXPENSES FOR HOUSEHOLD AND DEPENDENT 
              CARE SERVICES NECESSARY FOR GAINFUL EMPLOYMENT.

    (a) $3,000 Per Child Limit.--Paragraphs (1) and (2) of section 
21(c) of the Internal Revenue Code of 1986 (relating to dollar limit on 
amount creditable) are amended to read as follows:
            ``(1) $3,000, multiplied by
            ``(2) the number of qualifying individuals with respect to 
        the taxpayer for such taxable year.''.
    (b) Modification of Adjusted Gross Income Limitation.--
            (1) In general.--Paragraph (2) of section 21(a) of such 
        Code is amended to read as follows:
            ``(2) Adjusted gross income limitation.--The amount of the 
        credit allowable under paragraph (1) shall be reduced (but not 
        below zero) by $50 for each $1,000 (or fraction thereof) by 
        which the taxpayer's adjusted gross income exceeds $125,000 
        (twice such amount in the case of a joint return).''.
            (2) Conforming amendment.--Section 21(a)(1) of such Code is 
        amended by striking ``applicable percentage'' and inserting 
        ``35 percent''.
    (c) Inflation Adjustment.--Subsection (e) of section 21 of such 
Code is amended by adding at the end the following new paragraph:
            ``(11) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2006, the $125,000 
        amount contained in subsection (a)(2) and the $3,000 amount 
        contained in subsection (c)(1) shall each be increased by an 
        amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `2005' for `1992' in subparagraph (B) thereof.
        Any increase determined under the preceding sentence shall be 
        rounded to the nearest multiple of $50.''.
    (d) Credit Made Refundable.--
            (1) Credit moved to subpart relating to refundable 
        credits.--The Internal Revenue Code of 1986 is amended--
                    (A) by redesignating section 36 as section 37,
                    (B) by redesignating section 21, as amended by this 
                Act, as section 36, and
                    (C) by moving section 36 (as so redesignated) from 
                subpart A of part IV of subchapter A of chapter 1 to 
                the location immediately before section 37 (as so 
                redesignated) in subpart C of part IV of subchapter A 
                of chapter 1.
            (2) Conforming amendments.--
                    (A) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, is amended by inserting ``or 36'' 
                after ``section 35''.
                    (B) The table of sections for subpart A of part IV 
                of subchapter A of chapter 1 of the Internal Revenue 
                Code of 1986 is amended by striking the item relating 
                to section 21.
                    (C) The table of sections for subpart C of part IV 
                of subchapter A of chapter 1 of the Internal Revenue 
                Code of 1986 is amended by redesignating the item 
                relating to section 36 as an item relating to section 
                37 and by inserting before such item the following new 
                item:

``Sec. 36. Expenses for household and dependent care services necessary 
                            for gainful employment.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.
                                 <all>