A bill to amend the Internal Revenue Code of 1954 to provide individuals a credit against income tax for amounts paid or incurred by the taxpayer for alterations to his principal residence in order to make such residence more suitable for handicapped family members.

Amends the Internal Revenue Code to allow homeowners a nonrefundable income tax credit for 50 percent of the expenses paid or incurred to make alterations to their residences for the purpose of making such residences more accessible to, and usable by, a handicapped individual who is either the taxpayer, his spouse, or a dependent of the taxpayer. Limits the amount of such credit, for each such handicapped individual, to the lesser of $1,000 or an amount which, when added to previous year's credits, does not exceed $5,000. Reduces the amount of such credit by one-half of the amount by which the adjusted gross income of the taxpayer exceeds $20,000 ($35,000 in the case of married individuals filing jointly).

Defines "handicapped individual" as any individual who has a medically identifiable mental or physical impairment which can be expected to result in death or which can be expected to last for a continuous period of at least 12 months, and which substantially limits one or more of the major life activities of such individual. Requires the handicapped individual to live in the principal residence for which the alterations are made for not less than a nine month period during the taxable year.