Child Tax Credit Improvement Act

Summary: Child Tax Credit Improvement Act  This bill amends the Internal Revenue Code, with respect to the child tax credit, to: (1) increase the amount of such credit for children who have not attained age 6 by the close of the taxable year, (2) modify the limitation on such credit based upon taxpayer adjusted gross income and the age of the qualifying child, (3) increase the refundable portion of such credit for children under age 6, and (4) allow an inflation adjustment to the $1,000 credit amount beginning after 2015.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Child Tax Credit Improvement Act''.

SEC. 2. EXPANSION OF THE CHILD TAX CREDIT.

    (a) Increase in Amount of Credit for Young Children.--Subsection 
(a) of section 24 of the Internal Revenue Code of 1986 is amended to 
read as follows:
    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--
            ``(1) with respect to each qualifying child of the taxpayer 
        who has attained 6 years of age by the close of the taxable 
        year and for which the taxpayer is allowed a deduction under 
        section 151, $1,000, and
            ``(2) with respect to each qualifying child of the taxpayer 
        who has not attained 6 years of age by the close of the taxable 
        year and for which the taxpayer is allowed a deduction under 
        section 151, an amount equal to three times the dollar amount 
        applicable under paragraph (1).''.
    (b) Modification of Limitations.--Paragraph (1) of section 24(b) of 
the Internal Revenue Code of 1986 is amended to read as follows:
            ``(1) Limitation based on adjusted gross income.--
                    ``(A) In general.--
                            ``(i) Limitation on credit for qualifying 
                        children who have not attained 6 years of 
                        age.--The amount of the credit allowable under 
                        subsection (a)(2) shall be reduced (but not 
                        below zero) by $150 for each $1,000 (or 
                        fraction thereof) by which the taxpayer's 
                        modified adjusted gross income exceeds the 
                        threshold amount.
                            ``(ii) Limitation on credit for qualifying 
                        children who have attained 6 years of age.--The 
                        amount of the credit allowable under subsection 
                        (a)(1) shall be reduced (but not below zero) by 
                        $50 for each $1,000 (or fraction thereof) by 
                        which the taxpayer's modified adjusted gross 
                        income exceeds--
                                    ``(I) in the case of a taxpayer for 
                                which no credit is allowable under 
                                subsection (a)(2), the threshold 
                                amount, or
                                    ``(II) in the case of a taxpayer 
                                for which a credit is allowable under 
                                subsection (a)(2), the dollar amount of 
                                the modified adjusted gross income of 
                                the taxpayer at which the credit 
                                allowable under subsection (a)(2) is 
                                reduced to zero.
                    ``(B) Definition.--For purposes of this paragraph, 
                the term `modified adjusted gross income' means 
                adjusted gross income increased by any amount excluded 
                from gross income under section 911, 931, or 933.''.
    (c) Increase in Refundable Portion.--
            (1) In general.--Clause (i) of section 24(d)(1)(B) of the 
        Internal Revenue Code of 1986 is amended to read as follows:
                            ``(i) an amount equal to--
                                    ``(I) in the case of a taxpayer for 
                                which a credit is allowable under 
                                subsection (a)(2), 45 percent 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, or
                                    ``(II) in the case of a taxpayer 
                                for which a credit is allowable under 
                                subsection (a)(1) and for which no 
                                credit is allowable under subsection 
                                (a)(2), 15 percent 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, or''.
            (2) Conforming amendment.--Subsection (d) of section 24 of 
        such Code is amended by striking paragraph (4).
            (3) Elimination of inflation adjustment.--Subsection (d) of 
        section 24 of such Code is amended by striking paragraph (3).
    (d) Inflation Adjustments.--Section 24 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subsection:
    ``(g) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 2015, the $1,000 amount in 
        subsection (a)(1) shall 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 
                `calendar year 2014' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--Any increase determined under the 
        preceding sentence shall be rounded to the nearest multiple of 
        $50.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.