II 

110TH CONGRESS 

1ST SESSION S. 816 

To amend the Internal Revenue Code of 1986 to increase tax benefits for 

parents with children, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 8, 2007 

Mr. BROWNBACK 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 increase 

tax benefits for parents with children, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Parents’ Tax Relief 

5 Act of 2007’’. 

6 SEC. 2. MINIMUM DEPENDENT CARE CREDIT FOR PARENTS 

7 CARING FOR CHILDREN AT HOME. 

8 (a) IN GENERAL.—Subsection (e) of section 21 of the 

9 Internal Revenue Code of 1986 (relating to special rules) 


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1 is amended by adding at the end the following new para2 graph: 

3 ‘‘(11) MINIMUM CREDIT ALLOWED FOR STAY4 AT-HOME PARENTS.—In the case of any taxpayer 

5 with one or more qualifying individuals under age 7 

6 at any time during the taxable year, such taxpayer 

7 shall be deemed to have employment-related ex8 penses with respect to each such qualifying indi9 vidual and earned income in an amount equal to the 

10 greater of— 

11 ‘‘(A) the amount of employment-related ex12 penses incurred for such qualifying individual 

13 for the taxable year (determined under this sec14 tion without regard to this paragraph), or 

15 ‘‘(B) $250 for each month beginning in 

16 such taxable year with respect to which such 

17 qualifying individual has not attained age 7 as 

18 of the beginning of such month.’’. 

19 (b) PHASEOUT OF CREDIT.—Section 21 of such Code 

20 is amended by redesignating subsection (f) as subsection 

21 (g) and inserting after subsection (e) the following new 

22 subsection: 

23 ‘‘(f) PHASEOUT OF CREDIT.— 

24 ‘‘(1) IN GENERAL.—The credit determined 

25 under subsection (a) shall be reduced (but not below 


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1 zero) by 2 percentage points for each $2,500 (or 

2 fraction thereof) by which the taxpayer’s adjusted 

3 gross income for the taxable year exceeds the thresh4 old amount. 

5 ‘‘(2) THRESHOLD AMOUNT.—For purposes of 

6 this subsection, the term ‘threshold amount’ 

7 means— 

8 ‘‘(A) $100,000 in the case of a joint re9 turn, or a surviving spouse, for which there is 

10 one qualifying individual, 

11 ‘‘(B) $120,000 in the case of a joint re12 turn, or a surviving spouse, for which there are 

13 two or three qualifying individuals, 

14 ‘‘(C) $160,000 in the case of a joint re15 turn, or a surviving spouse, for which there are 

16 four or more qualifying individuals, 

17 ‘‘(D) $75,000 in the case of a head of 

18 household for which there is one qualifying indi19 vidual, 

20 ‘‘(E) $90,000 in the case of a head of 

21 household for which there are two or three 

22 qualifying individuals, 

23 ‘‘(F) $120,000 in the case of a head of 

24 household for which there are four or more 

25 qualifying individuals, 


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1 ‘‘(G) $50,000 in the case of any other tax2 payer for which there is one qualifying indi3 vidual, 

4 ‘‘(H) $60,000 in the case of any other tax5 payer for which there are two or three quali6 fying individuals, and 

7 ‘‘(I) $80,000 in the case of any other tax8 payer for which there are four or more quali9 fying individuals.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2006. 

13 SEC. 3. INCREASE IN PERSONAL EXEMPTION AMOUNT. 

14 (a) IN GENERAL.—Paragraph (1) of section 151(d) 

15 of the Internal Revenue Code of 1986 is amended by strik16 ing ‘‘$2,000’’ and inserting ‘‘$5,000’’. 

17 (b) INFLATION ADJUSTMENT.—Subparagraph (A) of 

18 section 151(d)(4) of such Code is amended— 

19 (1) by striking ‘‘1989’’ and inserting ‘‘2007’’, 

20 and 

21 (2) by striking ‘‘1988’’ in clause (ii) and insert22 ing ‘‘2006’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to taxable years beginning after 

25 December 31, 2006. 


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1 SEC. 4. ELIMINATION OF CERTAIN MARRIAGE PENALTIES. 

2 (a) ELIMINATION OF MARRIAGE PENALTY IN ALL

3 RATE BRACKETS.—Paragraph (8) of section 1(f) of the 

4 Internal Revenue Code of 1986 (relating to phaseout of 

5 marriage penalty in 15-percent bracket) is amended to 

6 read as follows: 

7 ‘‘(8) ELIMINATION OF MARRIAGE PENALTY.— 

8 With respect to taxable years beginning after De9 cember 31, 2006, in prescribing the tables under 

10 paragraph (1)— 

11 ‘‘(A) the minimum and maximum amounts 

12 of taxable income in each rate bracket in the 

13 table contained in subsection (a) shall be 200 

14 percent of the minimum and maximum amounts 

15 of taxable income in the corresponding rate 

16 bracket in the table contained in subsection (c) 

17 (after any other adjustment under this sub18 section), and 

19 ‘‘(B) the comparable taxable income 

20 amounts in the table contained in subsection 

(d) shall be 1 21 ⁄2 of the amounts determined 

22 under subparagraph (A).’’. 

23 (b) ELIMINATION OF MARRIAGE PENALTY IN DE24 DUCTION FOR INTEREST ON STUDENT LOANS.—Para25 graph (1) of section 221 of the Internal Revenue Code 


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1 of 1986 (relating to general rule for maximum deduction) 

2 is amended to read as follows: 

3 ‘‘(1) IN GENERAL.— 

4 ‘‘(A) GENERAL RULE.—The amount al5 lowed as a deduction under subsection (a) shall 

6 not exceed $2,500. 

7 ‘‘(B) SPECIAL RULE FOR JOINT RE8 TURN.—In the case of a husband and wife— 

9 ‘‘(i) who make a joint return for the 

10 taxable year, and 

11 ‘‘(ii) each of whom is the obligor on a 

12 qualified education loan for the qualified 

13 education expenses of the husband or wife, 

14 as the case may be, 

15 subparagraph (A) shall be applied separately 

16 with respect to the husband and the wife, ex17 cept that not more than $2,500 of interest ex18 pense may be taken into account under this sec19 tion with respect to each of the husband, the 

20 wife, and all dependents.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section apply to taxable years beginning after Decem23 ber 31, 2006. 


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1 SEC. 5. STANDARD DEDUCTION FOR BUSINESS USE OF 

2 HOME. 

3 (a) IN GENERAL.—Subsection (c) of section 280A of 

4 the Internal Revenue Code of 1986 (relating to disallow5 ance of certain expenses in connection with business use 

6 of home, rental of vacation homes, etc.) is amended by 

7 adding at the end the following new paragraph: 

8 ‘‘(7) STANDARD HOME OFFICE DEDUCTION.— 

9 ‘‘(A) IN GENERAL.—In the case of an indi10 vidual that is allowed a deduction for the use of 

11 a home office because of a use described in 

12 paragraphs (1), (2), or (4) of this subsection, 

13 notwithstanding the limitations of paragraph 

14 (5), such individual may elect to use the stand15 ard home office deduction for the taxable year. 

16 ‘‘(B) STANDARD HOME OFFICE DEDUC17 TION AMOUNT.—For purposes of this para18 graph, the standard home office deduction is 

19 the lesser of— 

20 ‘‘(i) $2,500, or 

21 ‘‘(ii) the gross income derived from 

22 the individual’s trade or business for which 

23 such use occurs.’’. 

24 (b) EFFECTIVE DATE.—The amendment made by 

25 this section shall apply to taxable years beginning after 

26 the date of the enactment of this Act. 


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1 SEC. 6. INCREASE AND OTHER MODIFICATIONS IN CHILD 

2 TAX CREDIT MADE PERMANENT. 

3 (a) IN GENERAL.—Title IX of the Economic Growth 

4 and Tax Relief Reconciliation Act of 2001 shall not apply 

5 to the amendments made by section 201 of such Act (re6 lating to modifications to child tax credit). 

7 (b) CREDIT AMOUNT ADJUSTED FOR INFLATION.— 

8 Section 24 of the Internal Revenue Code of 1986 is 

9 amended by adding at the end the following new sub10 section: 

11 ‘‘(g) INFLATION ADJUSTMENT.—In the case of any 

12 taxable year beginning in a calendar year after 2007, the 

13 $1,000 amount contained in subsection (a) shall be in14 creased by an amount equal to— 

15 ‘‘(1) such dollar amount, multiplied by 

16 ‘‘(2) the cost-of-living adjustment determined 

17 under section 1(f)(3) for the calendar year in which 

18 the taxable year begins, determined by substituting 

19 ‘calendar year 2006’ for ‘calendar year 1992’ in sub20 paragraph (B) thereof. 

21 Any increase determined under the preceding sentence 

22 shall be rounded to the nearest multiple of $50.’’. 

23 SEC. 7. TELECOMMUTING TAX CREDIT. 

24 (a) IN GENERAL.—Subpart D of part IV of sub25 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 (relating to business related credits) is amended by 

2 adding at the end the following new section: 

3 ‘‘SEC. 45O. TELECOMMUTING CREDIT. 

4 ‘‘(a) DETERMINATION OF AMOUNT.—For purposes of 

5 section 38, the amount of the telecommuting credit deter6 mined under this section for the taxable year shall be 

7 equal to 40 percent of the qualified first-year teleworking 

8 wages paid or incurred during such year. 

9 ‘‘(b) QUALIFIED FIRST-YEAR TELEWORKING

10 WAGES.—For purposes of this section— 

11 ‘‘(1) IN GENERAL.—The term ‘qualified first12 year teleworking wages’ means, with respect to any 

13 individual, wages attributable to service rendered 

14 during the first teleworking year with respect to 

15 such individual. 

16 ‘‘(2) FIRST TELEWORKING YEAR.—The term 

17 ‘first teleworking year’ means, with respect to any 

18 individual employed by an employer, the first 1-year 

19 period during which such individual renders not less 

20 than 40 percent of the total service rendered to such 

21 employer during such 1-year period from the individ22 ual’s principal residence. 

23 ‘‘(3) ONLY FIRST $6,000 OF WAGES PER YEAR

24 TAKEN INTO ACCOUNT.—The amount of the quali25 fied first-year teleworking wages which may be taken 


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1 into account with respect to any individual shall not 

2 exceed $6,000. 

3 ‘‘(c) WAGES.—For purposes of this section— 

4 ‘‘(1) IN GENERAL.—The term ‘wages’ has the 

5 meaning given to such term by subsection (b) of sec6 tion 3306 (determined without regard to any dollar 

7 limitation contained in such section). 

8 ‘‘(2) ON-THE-JOB TRAINING AND WORK SUP9 PLEMENTATION PAYMENTS.— 

10 ‘‘(A) EXCLUSION FOR EMPLOYERS RECEIV11 ING ON-THE-JOB TRAINING PAYMENTS.—The 

12 term ‘wages’ shall not include any amounts 

13 paid or incurred by an employer for any period 

14 to any individual for whom the employer re15 ceives federally funded payments for on-the-job 

16 training of such individual for such period. 

17 ‘‘(B) REDUCTION FOR WORK SUPPLEMEN18 TATION PAYMENTS TO EMPLOYERS.—The 

19 amount of wages which would (but for this sub20 paragraph) be qualified wages under this sec21 tion for an employer with respect to an indi22 vidual for a taxable year shall be reduced by an 

23 amount equal to the amount of the payments 

24 made to such employer (however utilized by 

25 such employer) with respect to such individual 


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1 for such taxable year under a program estab2 lished under section 482(e) of the Social Secu3 rity Act. 

4 ‘‘(d) SPECIAL RULES.—For purposes of this section, 

5 rules similar to the rules of section 52 and subsections 

6 (f), (g), (i) (other than paragraph (2) thereof), (j), and 

7 (k) of section 51 shall apply.’’. 

8 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec9 tion 38(b) of such Code is amended by striking ‘‘plus’’ 

10 at the end of paragraph (30), by striking the period at 

11 the end of paragraph (31) and inserting ‘‘, plus’’, and by 

12 adding at the end the following new paragraph: 

13 ‘‘(32) the telecommuting credit determined 

14 under section 45O(a).’’. 

15 (c) CLERICAL AMENDMENT.—The table of sections 

16 for subpart D of part IV of subchapter A of chapter 1 

17 of such Code is amended by adding at the end the fol18 lowing new item: 

‘‘Sec. 45O. Telecommuting credit.’’. 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to taxable years beginning after 

21 December 31, 2006, and shall take into account first tele22 working years beginning before, on, or after such date. 


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1 SEC. 8. EMPLOYER-PROVIDED COMPUTER EQUIPMENT 

2 TREATED AS FRINGE BENEFIT. 

3 (a) IN GENERAL.—Subsection (a) of section 132 of 

4 the Internal Revenue Code of 1986 is amended by striking 

5 ‘‘or’’ at the end of paragraph (7), by striking the period 

6 at the end of paragraph (8) and inserting ‘‘, or’’, and by 

7 adding at the end the following new paragraph: 

8 ‘‘(9) qualified employer-provided computer 

9 equipment fringe.’’. 

10 (b) QUALIFIED EMPLOYER-PROVIDED COMPUTER

11 EQUIPMENT FRINGE.—Section 132 of such Code is 

12 amended by redesignating subsection (o) as subsection (p) 

13 and by inserting after subsection (n) the following new 

14 subsection: 

15 ‘‘(o) QUALIFIED EMPLOYER-PROVIDED COMPUTER

16 EQUIPMENT FRINGE.—For purposes of this section— 

17 ‘‘(1) IN GENERAL.—The term ‘qualified em18 ployer-provided computer equipment fringe’ means 

19 any computer and related equipment and services 

20 provided to an employee by an employer if— 

21 ‘‘(A) such computer and related equipment 

22 and services are necessary for the employee to 

23 perform work for the employer from the em24 ployee’s home, and 


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1 ‘‘(B) the employee makes substantial busi2 ness use of the equipment in the performance 

3 of work for the employer. 

4 ‘‘(2) SUBSTANTIAL USE.—For purposes of 

5 paragraph (1), the term ‘substantial business use’ 

6 includes standby use for periods when work from 

7 home may be required by the employer such as dur8 ing work closures caused by the threat of terrorism, 

9 inclement weather, or natural disasters.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2006. 

13 SEC. 9. INCREASED BENEFITS FOR INDIVIDUALS PRE14 CLUDED FROM PERFORMING REMUNERA15 TIVE WORK BY NEED TO PROVIDE CHILD 

16 CARE. 

17 Title II of the Social Security Act (42 U.S.C. 401 

18 et seq.) is amended by adding at the end the following 

19 new section: 

20 ‘‘INCREASED BENEFITS FOR INDIVIDUALS PRECLUDED

21 FROM PERFORMING REMUNERATIVE WORK BY NEED

22 TO PROVIDE CHILD CARE

23 ‘‘SEC. 235. (a) GENERAL RULE.—For purposes of 

24 determining entitlement to and the amount of any monthly 

25 benefit or lump-sum death payment payable under this 

26 title on the basis of the wages and self-employment income 


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1 of any individual, and for purposes of section 216(i)(3), 

2 if such individual— 

3 ‘‘(1) is not otherwise credited under this title, 

4 for one or more of such individual’s elapsed years 

5 (referred to in section 215(b)(3)), with wages at 

6 least equal to the national average wage index (as 

7 defined in section 209(k)) for such year, and 

8 ‘‘(2) is a qualified individual in connection with 

9 any such elapsed year after 2007, 

10 then such individual shall be credited under this title for 

11 such year after 2007 with additional wages in an amount 

12 necessary to increase the total wages credited to such indi13 vidual under this title for such year to an amount equal 

14 to the national average wage index (as so defined) for such 

15 year. 

16 ‘‘(b) QUALIFIED INDIVIDUAL.—For purposes of this 

17 section, the term ‘qualified individual’ means, in connec18 tion with any year, any individual in any case in which— 

19 ‘‘(1) such individual is married for a period 

20 during such year of not less than 90 days, 

21 ‘‘(2) throughout such period during such year, 

22 such individual lives with a qualified child, and 

23 ‘‘(3) more than 75 percent of the total remu24 neration of such individual and such individual’s 

25 spouse for such year which is attributable to wages 


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1 or self-employment income earned or derived during 

2 the period during such year for which the require3 ments of paragraphs (1) and (2) are met consists of 

4 wages or self-employment income earned or derived 

5 by such spouse. 

6 ‘‘(c) QUALIFIED CHILD.—For purposes of this sec7 tion, the term ‘qualified child’ means, in connection with 

8 a qualified individual, a child of such individual (or such 

9 individual’s spouse referred to in subsection (b)(2)) who 

10 has not attained age 7. 

11 ‘‘(d) LIMITATION TO 10 ELAPSED YEARS.—In any 

12 case in which the requirements of subsection (a) are met 

13 in connection with more than 10 elapsed years of an indi14 vidual, subsection (a) shall apply only with respect to those 

15 elapsed years, not in excess of 10, which, when taken into 

16 account in the application of subsection (a), result in the 

17 highest primary insurance amount for such individual, 

18 taking into account which years would be excluded from 

19 benefit computation years under section 215(b)(2)(B)(i). 

20 ‘‘(e) PROTECTION OF TRUST FUND BALANCES.— 

21 There are authorized to be appropriated to each of the 

22 Trust Funds, consisting of the Federal Old-Age and Sur23 vivors Insurance Trust Fund, the Federal Disability In24 surance Trust Fund, and the Federal Hospital Insurance 

25 Trust Fund, for transfer on July 1 of each calendar year 


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1 after 2007 to such Trust Fund from amounts in the gen2 eral fund in the Treasury not otherwise appropriated, an 

3 amount equal to the total of the additional amounts which 

4 would be appropriated to such Trust Fund for the fiscal 

5 year ending September 30 of such calendar year under 

6 section 201 or 1817 of this Act if the amounts of the addi7 tional wages credited for such calendar year by reason of 

8 subsection (a) constituted remuneration for employment 

9 (as defined in section 3121(b) of the Internal Revenue 

10 Code of 1986) for purposes of the taxes imposed by sec11 tions 3101 and 3111 of the Internal Revenue Code of 

12 1986. Amounts authorized to be appropriated under this 

13 subsection for transfer on July 1 of each calendar year 

14 shall be determined on the basis of estimates of the Com15 missioner of Social Security of the wages required to be 

16 credited for such calendar year under subsection (a); and 

17 proper adjustments shall be made in amounts authorized 

18 to be appropriated for subsequent transfer to the extent 

19 prior estimates were in excess of or were less than such 

20 wages so credited.’’. 

Æ 


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