Parents' Tax Relief Act of 2005 - Amends the Internal Revenue Code to: (1) provide for a minimum tax credit for household and dependent care services for dependents under the age of six; (2) increase to $5,000 the amount of the personal tax exemption; (3) eliminate the marriage penalty in all income tax brackets; (4) establish a standard tax deduction for expenses related to business usage of a home; (5) make permanent increases in the child tax credit and adjust the amount of such credit for inflation on an annual basis after 2005; (6) allow employers a tax credit for employees who telecommute; and (7) allow an exclusion from employee gross income for employer-provided computer equipment used to work at home.
Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to award social security credits to parents who stay at home, instead of working outside the home, to care for children who are either under age six or under age 10 and disabled. Authorizes transfers from the general fund to specified Social Security trust funds to cover the cost of such credits.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3080 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 3080
To amend the Internal Revenue Code of 1986 to increase tax benefits for
parents with children, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 27, 2005
Mr. Terry (for himself, Mr. Bartlett of Maryland, Mr. Fortenberry, Ms.
Foxx, Mr. Miller of Florida, Mrs. Musgrave, Mr. Doolittle, Mr. Pence,
Mr. Gingrey, Ms. Ginny Brown-Waite of Florida, Mr. Pitts, Mr. Boustany,
and Mr. Manzullo) 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 increase tax benefits for
parents with children, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Parents' Tax Relief Act of 2005''.
SEC. 2. MINIMUM DEPENDENT CARE CREDIT FOR PARENTS CARING FOR CHILDREN
AT HOME.
(a) In General.--Subsection (e) of section 21 of the Internal
Revenue Code of 1986 (relating to special rules) is amended by adding
at the end the following new paragraph:
``(11) Minimum credit allowed for stay-at-home parents.--In
the case of any taxpayer with one or more qualifying
individuals described in subparagraph (A) of subsection (b)(1)
under the age of 6 at any time during the taxable year, such
taxpayer shall be deemed to have employment-related expenses
with respect to each such qualifying individual and earned
income in an amount equal to the greater of--
``(A) the amount of employment-related expenses
incurred for such qualifying individuals for the
taxable year (determined under this section without
regard to this paragraph), or
``(B) $250 for each month beginning in such taxable
year with respect to which such qualifying individual
has not attained age 6 as of the beginning of such
month.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2004.
SEC. 3. INCREASE IN PERSONAL EXEMPTION AMOUNT.
(a) In General.--Paragraph (1) of section 151(d) of the Internal
Revenue Code of 1986 is amended by striking ``$2,000'' and inserting
``$5,000'' .
(b) Inflation Adjustment.--Subparagraph (A) of section 151(d)(4) of
such Code is amended--
(1) by striking ``1989'' and inserting ``2005'', and
(2) by striking ``1988'' in clause (ii) and inserting
``2004''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2004.
SEC. 4. ELIMINATION OF MARRIAGE PENALTY IN ALL RATE BRACKETS.
(a) In General.--Paragraph (8) of section 1(f) of the Internal
Revenue Code of 1986 (relating to phaseout of marriage penalty in 15-
percent bracket) is amended to read as follows:
``(8) Elimination of marriage penalty.--With respect to
taxable years beginning after December 31, 2004, in prescribing
the tables under paragraph (1)--
``(A) the minimum and maximum amounts of taxable
income in each rate bracket in the table contained in
subsection (a) shall be 200 percent of the minimum and
maximum amounts of taxable income in the corresponding
rate bracket in the table contained in subsection (c)
(after any other adjustment under this subsection), and
``(B) the comparable taxable income amounts in the
table contained in subsection (d) shall be 1/2 of the
amounts determined under subparagraph (A).''.
(b) Effective Date.--The amendment made by this section apply to
taxable years beginning after December 31, 2004.
SEC. 5. STANDARD DEDUCTION FOR BUSINESS USE OF HOME.
(a) In General.--Subsection (c) of section 280A of the Internal
Revenue Code of 1986 (relating to disallowance of certain expenses in
connection with business use of home, rental of vacation homes, etc.)
is amended by adding at the end the following new paragraph:
``(7) Standard home office deduction.--
``(A) In general.--In the case of an individual
that is allowed a deduction for the use of a home
office because of a use described in paragraphs (1),
(2), or (4) of this subsection, notwithstanding the
limitations of paragraph (5), such individual may elect
to use the standard home office deduction for the
taxable year.
``(B) Standard home office deduction amount.--For
purposes of this paragraph, the standard home office
deduction is the lesser of--
``(i) $2,500, or
``(ii) the gross income derived from the
individual's trade or business for which such
use occurs.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 6. INCREASE AND OTHER MODIFICATIONS IN CHILD TAX CREDIT MADE
PERMANENT.
(a) In General.--Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 shall not apply to the amendments made by
section 201 of such Act (relating to modifications to child tax
credit).
(b) Credit Amount Adjusted for Inflation.--Section 24 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(g) Inflation Adjustment.--In the case of any taxable year
beginning in a calendar year after 2005, the $1,000 amount contained in
subsection (a) shall be increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable year
begins, determined by substituting `calendar year 2004' for
`calendar year 1992' in subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be rounded
to the nearest multiple of $50.''.
SEC. 7. TELECOMMUTING TAX CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business related
credits) is amended by adding at the end the following new section:
``SEC. 45J. TELECOMMUTING CREDIT.
``(a) Determination of Amount.--For purposes of section 38, the
amount of the telecommuting credit determined under this section for
the taxable year shall be equal to 40 percent of the qualified first-
year wages for such year.
``(b) Qualified First-Year Wages.--For purposes of this section--
``(1) In general.--The term `qualified first-year wages'
means, with respect to any individual, qualified wages
attributable to service rendered during the 1-year period
beginning with the day the individual begins work for the
employer.
``(2) Qualified wages.--The term `qualified wages' means
the wages paid or incurred by the employer during the taxable
year to qualified telecommuters.
``(3) Only first $6,000 of wages per year taken into
account.--The amount of the qualified first-year wages which
may be taken into account with respect to any individual shall
not exceed $6,000 per year.
``(c) Qualified Telecommuter.--For purposes of this section, the
term `qualified telecommuter' means any individual who renders not less
than 40 percent of the service described in subsection (b)(2) from the
individual's principal residence.
``(d) Wages.--For purposes of this section--
``(1) In general.--The term `wages' has the meaning given
to such term by subsection (b) of section 3306 (determined
without regard to any dollar limitation contained in such
section).
``(2) On-the-job training and work supplementation
payments.--
``(A) Exclusion for employers receiving on-the-job
training payments.--The term `wages' shall not include
any amounts paid or incurred by an employer for any
period to any individual for whom the employer receives
federally funded payments for on-the-job training of
such individual for such period.
``(B) Reduction for work supplementation payments
to employers.--The amount of wages which would (but for
this subparagraph) be qualified wages under this
section for an employer with respect to an individual
for a taxable year shall be reduced by an amount equal
to the amount of the payments made to such employer
(however utilized by such employer) with respect to
such individual for such taxable year under a program
established under section 482(e) of the Social Security
Act.
``(e) Special Rules.--For purposes of this section, rules similar
to the rules of section 52 and subsections (f), (g), (i), (j), and (k)
of section 51 shall apply.''.
(b) Credit Treated as Business Credit.--Section 38(b) of such Code
is amended by striking ``plus'' at the end of paragraph (18), by
striking the period at the end of paragraph (19) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(20) the telecommuting credit determined under section
45J(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by adding
at the end the following new item:
``Sec. 45J. Telecommuting credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable year beginning after December 31, 2004.
SEC. 8. EMPLOYER-PROVIDED COMPUTER EQUIPMENT TREATED AS FRINGE BENEFIT.
(a) In General.--Subsection (a) of section 132 of the Internal
Revenue Code of 1986 is amended by striking ``or'' at the end of
paragraph (7), by striking the period at the end of paragraph (8) and
inserting ``, or'', and by adding at the end the following new
paragraph:
``(9) qualified employer-provided computer equipment
fringe.''.
(b) Qualified Employer-Provided Computer Equipment Fringe.--Section
132 of such Code is amended by adding at the end the following new
subsection:
``(o) Qualified Employer-Provided Computer Equipment Fringe.--For
purposes of this section--
``(1) In general.--The term `qualified employer-provided
computer equipment fringe' means any computer and related
equipment and services provided to an employee by an employer
if--
``(A) such computer and related equipment and
services are necessary for the employee to perform work
for the employer from the employee's home, and
``(B) the employee makes substantial business use
of the equipment in the performance of work for the
employer.
``(2) Substantial use.--For purposes of paragraph (1), the
term `substantial business use' includes standby use for
periods when work from home may be required by the employer
such as during work closures caused by the threat of terrorism,
inclement weather, or natural disasters.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2004.
SEC. 9. INCREASED BENEFITS FOR INDIVIDUALS PRECLUDED FROM PERFORMING
REMUNERATIVE WORK BY NEED TO PROVIDE CHILD CARE.
Title II of the Social Security Act (42 U.S.C. 401 et seq.) is
amended by adding at the end the following new section:
``increased benefits for individuals precluded from performing
remunerative work by need to provide child care
``Sec. 235. (a) General Rule.-- For purposes of determining
entitlement to and the amount of any monthly benefit or lump-sum death
payment payable under this title on the basis of the wages and self-
employment income of any individual, and for purposes of section
216(i)(3), if such individual--
``(1) is not otherwise credited under this title, for one
or more of such individual's elapsed years (referred to in
section 215(b)(3)), with wages at least equal to the national
average wage index (as defined in section 209(k)) for such
year, and
``(2) is a qualified individual in connection with any such
elapsed year after 2005,
then such individual shall be credited under this title for such year
after 2005 with additional wages in an amount necessary to increase the
total wages credited to such individual under this title for such year
to an amount equal to the national average wage index (as so defined)
for such year.
``(b) Qualified Individual.-- For purposes of this section, the
term `qualified individual' means, in connection with any year, any
individual in any case in which--
``(1) such individual is married for a period during such
year of not less than 90 days,
``(2) throughout such period during such year, such
individual and such individual's spouse live with a qualified
child, and
``(3) more than 50 percent of the total remuneration of
such individual and such individual's spouse for such year
which is attributable to wages or self-employment income earned
or derived during the period during such year for which the
requirements of paragraphs (1) and (2) are met consists of
wages or self-employment income earned or derived away from
home by such spouse.
``(c) Qualified Child.--For purposes of this section, the term
`qualified child' means, in connection with a qualified individual, a
child of such individual (or such individual's spouse referred to in
subsection (b)(2)) who--
``(1) is less than 6 years of age, or
``(2) is less than 10 years of age, is under a disability,
and is unable to attend school.
``(d) Limitation to 10 Elapsed Years.--In any case in which the
requirements of subsection (a) are met in connection with more than 10
elapsed years of an individual, subsection (a) shall apply only with
respect to those elapsed years, not in excess of 10, which, when taken
into account in the application of subsection (a), result in the
highest primary insurance amount for such individual, taking into
account which years would be excluded from benefit computation years
under section 215(b)(2)(B)(i).
``(e) Protection of Trust Fund Balances.--There are authorized to
be appropriated to each of the Trust Funds, consisting of the Federal
Old-Age and Survivors Insurance Trust Fund, the Federal Disability
Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund,
for transfer on July 1 of each calendar year after 2005 to such Trust
Fund from amounts in the general fund in the Treasury not otherwise
appropriated, an amount equal to the total of the additional amounts
which would be appropriated to such Trust Fund for the fiscal year
ending September 30 of such calendar year under section 201 or 1817 of
this Act if the amounts of the additional wages credited for such
calendar year by reason of subsection (a) constituted remuneration for
employment (as defined in section 3121(b) of the Internal Revenue Code
of 1986) for purposes of the taxes imposed by sections 3101 and 3111 of
the Internal Revenue Code of 1986. Amounts authorized to be
appropriated under this subsection for transfer on July 1 of each
calendar year shall be determined on the basis of estimates of the
Commissioner of Social Security of the wages required to be credited
for such calendar year under subsection (a); and proper adjustments
shall be made in amounts authorized to be appropriated for subsequent
transfer to the extent prior estimates were in excess of or were less
than such wages so credited.''.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E1358-1359)
Referred to the House Committee on Ways and Means.
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