Foster Care Tax Credit Act

Summary: Foster Care Tax Credit Act - 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. Defines &quot;qualifying foster child&quot; as a child in foster care who has not attained age 17, who is a citizen, national, or resident of the United States, and with respect to whom the child tax credit is not allowable. Requires the name and taxpayer identification number of a foster child to be included on the taxpayer's tax return.  Directs the Secretary of Health and Human Services (HHS) to 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. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Foster Care Tax Credit Act''.

SEC. 2. FOSTER CARE TAX CREDIT.

    (a) 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 $10,000, 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).
            ``(3) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2001, the $10,000 
        amount contained in paragraph (1)(B)(i) shall be adjusted in 
        the same manner as the $10,000 amount under section 24(d)(1)(B) 
        is adjusted under section 24(d)(3).
    ``(g) 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.''.
    (b) Clerical Amendment.--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.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar months beginning after December 31, 2013, 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.