Foster Care Tax Credit Act
This bill amends the Internal Revenue Code to allow a partially refundable tax credit for each qualifying foster child who resides in the home of an eligible taxpayer for at least one calendar month during the taxable year.
A "qualifying foster child" is a child in foster care who: (1) has not attained age 17; (2) is a citizen, national, or resident of the United States; and (3) with respect to whom the child tax credit is not allowable.
In order to claim the credit, the name and taxpayer identification number of a foster child must be included on the taxpayer's tax return. No credit is allowed if the identification number of either the taxpayer or the qualifying child was issued after the due date for filing the return for the taxable year.
The bill denies the tax credit to certain taxpayers who have made prior fraudulent or reckless claims for the credit within specified disallowance periods.
The Department of Health and Human Services must identify provisions in the Internal Revenue Code that can benefit foster families and increase outreach efforts to inform state and Indian tribal foster care agencies and foster families about such provisions.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2024 Introduced in Senate (IS)]
<DOC>
115th CONGRESS
1st Session
S. 2024
To amend the Internal Revenue Code of 1986 to create a tax credit for
foster families.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 26, 2017
Ms. Heitkamp (for herself and Mr. Kaine) 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 create a tax credit for
foster families.
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 ``Foster Care Tax Credit Act''.
SEC. 2. FOSTER CARE TAX CREDIT.
(a) Allowance of Credit.--
(1) In general.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after section 25D the following new section:
``SEC. 25E. FOSTER CARE TAX CREDIT.
``(a) Allowance of Credit.--With respect to each qualifying foster
child of an eligible taxpayer, for each calendar month occurring during
the taxable year that such child resides in the home of such taxpayer,
there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to \1/12\ of the amount
determined under subsection (b).
``(b) Amount Determined.--
``(1) In general.--The amount determined under this
subsection with respect to an eligible taxpayer and a taxable
year is--
``(A) $1,000, reduced by
``(B) $50 for each $1,000 (or fraction thereof) by
which the eligible taxpayer's modified adjusted gross
income exceeds the threshold amount.
For purposes of the preceding sentence, the term `modified
adjusted gross income' means adjusted gross income increased by
any amount excluded from gross income under section 911, 931,
or 933.
``(2) Threshold amount.--For purposes of paragraph (1), the
term `threshold amount' has the meaning given such term by
section 24(b)(2).
``(c) Qualifying Foster Child.--For purposes of this section, the
term `qualifying foster child' means an eligible foster child (within
the meaning of section 152(f)(1)(C)) of the eligible taxpayer--
``(1) who has not attained age 17,
``(2) who is a citizen, national, or resident of the United
States,
``(3) who resides in the home of the eligible taxpayer for
not less than 1 calendar month during the taxable year, and
``(4) with respect to whom the credit under section 24 is
not allowable to the eligible taxpayer or any other taxpayer
who would be an eligible taxpayer but for paragraph (3) of
subsection (d).
``(d) Eligible Taxpayer.--For purposes of this section, the term
`eligible taxpayer' means any taxpayer, except that--
``(1) no single household shall include more than 1
eligible taxpayer,
``(2) married individuals filing a joint return shall be
treated as 1 eligible taxpayer, and
``(3) in the case of individuals not described in paragraph
(2) who are members of the same household, only the taxpayer
with the highest adjusted gross income for the taxable year
shall be treated as an eligible taxpayer.
``(e) Calendar Month.--For purposes of this section, if a foster
child resides in the home of the taxpayer for more than 15 consecutive
days of a calendar month but fewer than the total number of days in
such calendar month, such foster child shall be treated as residing in
the home of the taxpayer for the full calendar month.
``(f) Portion of Credit Refundable.--
``(1) In general.--The aggregate credits allowed to a
taxpayer under subpart C shall be increased by the lesser of--
``(A) the credit which would be allowed under this
section without regard to this subsection and the
limitation under section 26(a) (determined after any
reduction of the credit under section 24(a) by reason
of section 24(d)), or
``(B) the amount by which the aggregate amount of
credits allowed by this subpart (determined without
regard to this subsection, and after any reduction of
the credit under section 24(a) by reason of section
24(d)) would increase if the limitation imposed by
section 26(a) were increased by the greater of--
``(i) 15 percent of so much of the
taxpayer's earned income (within the meaning of
section 32) which is taken into account in
computing taxable income for the taxable year
as exceeds $3,000, or
``(ii) in the case of a taxpayer with 3 or
more qualifying foster children residing in the
home of the taxpayer for all months in the
taxable year (without regard to whether the
same 3 children reside in the home of the
taxpayer for all such months), the excess (if
any) of--
``(I) the taxpayer's social
security taxes for the taxable year,
over
``(II) the credit allowed under
section 32 for the taxable year.
The amount of the credit allowed under this
subsection shall not be treated as a credit
allowed under this subpart and shall reduce the
amount of credit otherwise allowable under
subsection (a) without regard to section 26(a).
For purposes of subparagraph (B), any amount
excluded from gross income by reason of section
112 shall be treated as earned income which is
taken into account in computing taxable income
for the taxable year.
``(2) Social security taxes.--For purposes of paragraph
(1), the term `social security taxes' has the same meaning as
when used in section 24(d)(1).
``(g) Identification Requirements.--
``(1) Qualifying child identification requirement.--No
credit shall be allowed under this section to an eligible
taxpayer with respect to any qualifying foster child unless the
taxpayer includes the name and taxpayer identification number
of such qualifying foster child on the return of tax for the
taxable year and such taxpayer identification number was issued
on or before the due date for filing such return.
``(2) Taxpayer identification requirement.--No credit shall
be allowed under this section if the identifying number of the
eligible taxpayer was issued after the due date for filing the
return for the taxable year.
``(h) Restrictions on Taxpayers Who Improperly Claimed Credit in
Prior Year.--
``(1) Taxpayers making prior fraudulent or reckless
claims.--
``(A) In general.--No credit shall be allowed under
this section for any taxable year in the disallowance
period.
``(B) Disallowance period.--For purposes of
subparagraph (A), the disallowance period is--
``(i) the period of 10 taxable years after
the most recent taxable year for which there
was a final determination that the taxpayer's
claim of credit under this section was due to
fraud, and
``(ii) the period of 2 taxable years after
the most recent taxable year for which there
was a final determination that the taxpayer's
claim of credit under this section was due to
reckless or intentional disregard of rules and
regulations (but not due to fraud).
``(2) Taxpayers making improper prior claims.--In the case
of a taxpayer who is denied credit under this section for any
taxable year as a result of the deficiency procedures under
subchapter B of chapter 63, no credit shall be allowed under
this section for any subsequent taxable year unless the
taxpayer provides such information as the Secretary may require
to demonstrate eligibility for such credit.''.
(2) Conforming amendments.--
(A) Section 6211(b)(4) of the Internal Revenue Code
of 1986 is amended by ``inserting 25E(f),'' before
``32,''.
(B) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting ``25E,'' after ``25A,''.
(C) 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 inserting after the item
relating to section 25D the following new item:
``Sec. 25E. Foster care tax credit.''.
(b) Application of Tax Return Preparer Due Diligence Penalty.--
Section 6695(g) of the Internal Revenue Code of 1986 is amended by
inserting ``25E,'' after ``25A(a)(1),''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar months beginning after December 31, 2017, in taxable
years beginning after such date.
(d) Education.--The Secretary of Health and Human Services (or the
Secretary's delegate), in coordination with the Secretary of the
Treasury or such Secretary's delegate, shall identify provisions in the
Internal Revenue Code of 1986 that can be used by or can benefit foster
families, and shall increase outreach efforts to provide information
and educational materials regarding such provisions to State and Indian
tribal foster care agencies and to foster families.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line