Advancing Support for Working Families Act
This bill allows individual taxpayers an election to advance up to $5,000 of the child tax credit in the year of birth or adoption of an applicable qualifying child (a child, other than an eligible foster child, who has a specified relationship to the taxpayer and meets certain age, residency, and support requirements).
The bill sets forth a special rule for parents who do not qualify for the full refundable portion of the child tax credit. The advance amount for such parents is the lesser of $5,000, or 25% of their earned income amount for the taxable year.
The bill requires the Government Accountability Office to report to Congress on matters relating to taxpayers who make an election to advance the child tax credit.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5296 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 5296
To amend the Internal Revenue Code of 1986 to provide an election to
advance future child tax credits in the year of birth or adoption.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 4, 2019
Mr. Allred (for himself, Ms. Stefanik, Mr. Cunningham, Ms. Herrera
Beutler, Mr. Van Drew, Mr. Gonzalez of Ohio, Mr. Gottheimer, and Mr.
Steil) 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 provide an election to
advance future child tax credits in the year of birth or adoption.
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 ``Advancing Support for Working
Families Act''.
SEC. 2. ELECTION TO ADVANCE CHILD TAX CREDIT.
(a) In General.--Section 24 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
``(i) Election for Advanced Credit in Year of Birth or Adoption.--
``(1) In general.--In the case of a taxpayer who makes an
election under this subsection with respect to any applicable
qualifying child--
``(A) the amount of the credit allowed under
subsection (a) with respect to such applicable
qualifying child for the taxable year in which such
applicable qualifying child is born or adopted shall be
increased by the applicable amount, and
``(B) the amount determined under subsection (d)
shall be increased by the amount of credit allowed to
the taxpayer under this section by reason of
subparagraph (A).
No election may be made under this subsection with respect to
an applicable qualifying child unless the applicable qualifying
child is alive at the time the election is made.
``(2) Offsetting reduction.--
``(A) In general.--Except as otherwise provided in
this paragraph, if the amount of the credit allowed to
the taxpayer under subsection (a) is increased under
paragraph (1), the tax imposed by this chapter shall be
increased by the applicable fraction of such increase
for each taxable year in the offset period.
``(B) Applicable fraction.--For purposes of this
paragraph, the term `applicable fraction' means a
fraction--
``(i) the numerator of which is one, and
``(ii) the denominator of which is the
total number of years in the offset period.
``(C) Exceptions.--
``(i) Death.--Subparagraph (A) shall not
apply to any taxable year ending after the date
of the death of--
``(I) the taxpayer, or
``(II) the applicable qualifying
child with respect to the increase.
``(ii) Deferment.--
``(I) In general.--In the case of
any taxpayer described in subclause
(II) for the taxable year, no tax shall
be imposed under subparagraph (A) for
such taxable year and the number of
taxable years in the offset period
shall be increased (other than for
purposes of subparagraph (B)(ii)) by 1
year.
``(II) Taxpayer described.--A
taxpayer is described in this subclause
for any taxable year if the earned
income amount of the taxpayer for such
taxable year is more than 20 percent
less than the earned income amount of
the taxpayer for the preceding taxable
year and the taxpayer makes an election
under this clause. The Secretary shall
promulgate rules for calculating
differences in the earned income amount
of any taxpayer whose filing status is
not the same as such taxpayer's filing
status in the preceding taxable year.
``(III) Election.--An election made
under this clause shall apply to all
applicable qualifying children of the
taxpayer with respect to whom an
increase is allowed under this
subsection and may not be made with
respect to more than 3 taxable years in
any offset period.
``(D) Joint returns.--In the case of an increase in
credit allowed under paragraph (1) with respect to a
joint return, half of such increase shall be treated as
having been allowed to each individual filing such
return for purposes of this paragraph.
``(E) Return requirement.--If the tax imposed by
this chapter for the taxable year is increased under
this paragraph, the taxpayer shall, notwithstanding
section 6012, be required to file a return with respect
to the taxes imposed under this subtitle.
``(F) Offset period.--
``(i) In general.--Except as provided in
subparagraph (C)(ii), the term `offset period'
means, with respect to any increase under this
paragraph, the 10 taxable years beginning with
the taxable year in which the applicable
qualifying child is born or adopted.
``(ii) Special rule.--In the case of a
qualifying child who is adopted by the taxpayer
and who is over the age of 5 on the date the
adoption becomes final, the number of taxable
years in the offset period shall be reduced by
1 year for each year by which the age attained
by the qualifying child on the date the
adoption becomes final is over the age of 5.
``(3) Election to claim credit on prior year return.--In
the case of an applicable qualifying child born or adopted
after the date that is 120 days after the date of the enactment
of this subsection, a taxpayer may elect to treat such child as
born or adopted on December 31 of the calendar year preceding
such birth or adoption for purposes of this section.
``(4) Definitions.--For purposes of this subsection--
``(A) Applicable qualifying child.--The term
`applicable qualifying child' means any qualifying
child other than an eligible foster child (as defined
in section 152(f)(1)(C)).
``(B) Applicable amount.--
``(i) In general.--The applicable amount is
the amount, not to exceed the maximum credit
amount, elected by the taxpayer.
``(ii) Maximum credit amount.--
``(I) In general.--The maximum
credit amount is $5,000.
``(II) Special rule for certain
adopted children.--In the case of a
qualifying child who is adopted by the
taxpayer and who is over the age of 5
on the date the adoption becomes final,
the maximum credit amount shall be
reduced by $500 for each year by which
the age attained by the qualifying
child on the date the adoption becomes
final is over the age of 5.
``(C) Earned income amount.--The term `earned
income amount' means the amount of earned income
(within the meaning of section 32) which is taken into
account in computing taxable income for the taxable
year. For purposes of the preceding sentence, 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.
``(5) Special rule for certain low-income individuals.--
``(A) In general.--In the case of a taxpayer
described in subparagraph (B)--
``(i) the applicable amount shall not
exceed the lesser of--
``(I) the maximum credit amount, or
``(II) the applicable percentage of
the earned income amount of the
taxpayer for the taxable year, and
``(ii) paragraph (2)(F) shall be applied--
``(I) by substituting `15 taxable
years' for `10 taxable years' in clause
(i) thereof, and
``(II) by substituting `age of 0'
for `age of 5' each place it appears in
clause (ii).
``(B) Taxpayer described.--A taxpayer is described
in this subparagraph if the increase in credits allowed
under subpart C for the taxable year by reason of
subsection (d)(1) (determined without regard to
paragraph (1)(B)) is less than the amount that would be
so determined if subsection (d)(1) were applied without
regard to subparagraph (B) thereof.
``(C) Applicable percentage.--For purposes of
subparagraph (A)--
``(i) In general.--The applicable
percentage is 25 percent.
``(ii) Special rule for certain adopted
children.--In the case of a qualifying child
who is adopted by the taxpayer and who is over
the age of 5 on the date the adoption becomes
final, the applicable percentage shall be
reduced by 2.5 percentage points for each year
by which the age attained by the qualifying
child on the date the adoption becomes final is
over the age of 5.
``(6) Special rule for year of birth or adoption.--
``(A) In general.--In the case of a qualifying
child who is born or adopted during the taxable year
and with respect to whom an election is made under this
subsection--
``(i) subsection (h)(7) shall not apply,
and
``(ii) no credit shall be allowed under
this section with respect to such qualifying
child unless the taxpayer includes one of the
following:
``(I) In the case of a qualifying
child who is adopted, the adoption
taxpayer identification number of such
child.
``(II) A social security number
(within the meaning of subsection
(h)(7)) of such child.
``(III) Such documentation as
determined by the Secretary as
appropriate to establish that the
qualifying child qualifies for a social
security number (within the meaning of
subsection (h)(7)).
``(B) Acceleration.--
``(i) In general.--In any case in which a
taxpayer does not include a social security
number (within the meaning of subsection
(h)(7)) of a qualifying child with respect to
whom an election is made under this subsection
on the return of tax for the taxable year of
birth or adoption--
``(I) the tax imposed by this
chapter for the taxable year succeeding
the taxable year in which the birth or
adoption of the qualifying child occurs
shall be increased by the excess of the
amount of the increase in credit under
paragraph (1) over the amounts of tax
imposed by paragraph (2) for the
preceding taxable year, and
``(II) paragraph (2) shall not
apply with respect to such increase for
such taxable year or any subsequent
taxable year.
For purposes of this title, any increase in tax
under this subparagraph shall be treated in the
same manner as an increase in tax under
paragraph (2).
``(ii) Exception if social security number
provided.--Clause (i) shall not apply if the
taxpayer includes on the return of tax for the
taxable year succeeding the taxable year in
which the birth or adoption of the qualifying
child occurs the social security number (within
the meaning of subsection (h)(7)) of such
qualifying child.
``(7) Administration and regulations.--The Secretary shall
take such steps as necessary, including through regulations and
other guidance, in order to--
``(A) enable and encourage taxpayers to claim an
increased credit under this subsection as soon as
practical after the birth or adoption of a child,
including through a process available on the internet,
``(B) expedite the processing of refunds in
connection with an election to claim the increased
credit on a prior year return under paragraph (3),
``(C) prevent fraud and abuse of the increased
credit, including, if necessary, through the submission
of additional third party information related to the
birth or adoption of a child with respect to whom an
increased credit is claimed under this subsection, and
``(D) provide annual information to electing
taxpayers relating to outstanding liability with
respect to offsetting reductions under paragraph
(2).''.
(b) Credits Not Allowed Against Offset.--Section 26(b)(2) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of subparagraph (X), by striking the period at the end of subparagraph
(Y) and inserting ``, and'', and by adding at the end the following new
subparagraph:
``(Z) section 24(i)(2) (relating to offset of
advanced child tax credit in year of birth or
adoption).''.
(c) Math Error Authority.--Section 6213(g)(2) of the Internal
Revenue Code of 1986 is amended by striking ``and'' at the end of
subparagraph (P), by striking the period at the end of subparagraph (Q)
and inserting ``, and'', and by inserting after subparagraph (Q) the
following new subparagraph:
``(R) in the case of a taxpayer to whom section
24(i)(2) applies, an omission of correct information
relating to the amount of any increase allowed under
section 24(i), the applicable fraction (as defined in
such section) of such increase, or the determination of
whether the taxpayer is described in section
24(i)(2)(C)(ii)(II).''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2019.
(2) Special rule for election to claim credit on prior year
return.--In the case of a taxpayer who makes an election under
section 24(i)(3) (as added by subsection (a)) with respect to a
child born before January 1, 2021 (determined without regard to
such section), the amendments made by this section shall apply
to taxable years beginning after December 31, 2018.
(e) GAO Study.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Comptroller General of the United
States shall submit to Congress a report on taxpayers making an
election under section 24(i) of the Internal Revenue Code of
1986, as added by subsection (a).
(2) Matters included.--The report submitted under paragraph
(1) shall include the following:
(A) The total number of taxpayers making such
election for each month during 2019, and the average
number of days occurring during the period beginning on
the date on which such election is made and ending on
the date on which the Secretary of the Treasury (or the
Secretary's designee) makes a determination that an
increase under such section is allowed.
(B) The total number of taxpayers receiving an
increased credit under such section during 2019, and
the average number of days occurring during the period
beginning on the date on which such election is made
and ending on the date on which any refund related to
such increase is paid.
(C) An identification of any excessive delay in any
of the periods described in subparagraphs (A) and (B),
and a description of the causes for such delay, with
recommendations to address those excessive delays.
(D) The total number of taxpayers making such
election who failed to submit a social security number
of the qualifying child or such other information
required pursuant to section 24(i)(6)(A) of the
Internal Revenue Code of 1986 (as added by subsection
(a)), and a description of the barriers preventing
taxpayers from meeting such requirements, with
recommendations on how to increase taxpayer compliance
and address delays caused by other State and Federal
agencies.
(E) The total number of elections for deferment
under section 24(i)(2)(C)(ii) of such Code (as added by
subsection (a)) and the number of such elections
permitted.
(F) The total number of taxpayers not required to
make offsetting increases in tax under section
24(i)(2)(A) of such Code (as added by subsection (a))
due to the death of the applicable qualifying child or
the taxpayer and the revenue impact of such exceptions.
(G) A list of regulatory and legislative options,
determined in consultation with family and medical
leave experts, on the feasibility of expanding Federal
tax benefits, including through interaction with
programs administered by States, insurance companies,
and employers, to support taxpayers who take different
types of leave to which the Family and Medical Leave
Act of 1993 (29 U.S.C. 2601 et seq.) applies.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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