I

106TH CONGRESS

2D SESSION H. R. 5602

To amend the Internal Revenue Code of 1986 to allow a refundable credit

to grandparents who provide primary child care services without compensation for their grandchildren who are not their dependents.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 30, 2000

Ms. DELAURO (for herself and Mr. MALONEY of Connecticut) 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 allow a

refundable credit to grandparents who provide primary

child care services without compensation for their grandchildren who are not their dependents.

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 ‘‘Grandchild Care Tax

5 Relief Act of 2000’’.
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1 SEC. 2. REFUNDABLE CREDIT TO GRANDPARENTS PRO2 VIDING PRIMARY CHILD CARE FOR GRAND3 CHILDREN NOT THEIR DEPENDENTS.

4 (a) IN GENERAL.—Subpart C of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of

6 1986 (relating to refundable credits) is amended by redes7 ignating section 35 as section 36 and by inserting after

8 section 34 the following new section:

9 ‘‘SEC. 35. GRANDPARENTS PROVIDING PRIMARY CHILD

10 CARE FOR GRANDCHILDREN WHO ARE NOT

11 THEIR DEPENDENTS.

12 ‘‘(a) IN GENERAL.—In the case of an individual,

13 there shall be allowed as a credit against the tax imposed

14 by this chapter for the taxable year an amount equal to

15 $500 with respect to each qualifying grandchild for whom

16 the taxpayer or the spouse of the taxpayer provides, with17 out compensation, primary child care services during the

18 taxable year.

19 ‘‘(b) QUALIFYING GRANDCHILD.—For purposes of

20 this section, the term ‘qualifying grandchild’ means any

21 individual—

22 ‘‘(1) with respect to whom the taxpayer is not

23 allowed a deduction under section 151 with respect

24 to such individual for the taxable year,
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1 ‘‘(2) who has not attained the age of 16 as of

2 the close of the calendar year in which the taxable

3 year of the taxpayer begins, and

4 ‘‘(3) who is a descendent of a son, daughter,

5 stepson, or stepdaughter of the taxpayer or is a fos6 ter child of such a descendent, son, daughter, step7 son, stepdaughter.

8 For purposes of paragraph (3), the term ‘foster child’

9 means a child who is placed by an authorized placement

10 agency.

11 ‘‘(c) PRIMARY CHILD CARE SERVICES.—For pur12 poses of this section, an individual provides primary child

13 care services for a taxable year if the individual provides

14 such services for not less than 30 hours per week for 48

15 weeks of the taxable year.

16 ‘‘(d) SPECIAL RULES.—For purposes of this

17 section—

18 ‘‘(1) DECEASED SPOUSE OR FORMER

19 SPOUSE.—In the case of a taxpayer whose spouse is

20 deceased or is a former spouse of the taxpayer, sub21 section (b)(3) shall be applied by substituting ‘or de22 ceased or former spouse of the taxpayer’ after ‘tax23 payer’ each place it occurs.

24 ‘‘(2) IDENTIFICATION REQUIREMENT.—No

25 credit shall be allowed under this section to a tax-
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1 payer with respect to any qualifying grandchild un2 less the taxpayer includes the name and taxpayer

3 identification number of such qualifying grandchild

4 on the return of tax for the taxable year.

5 ‘‘(3) TAXABLE YEAR MUST BE FULL TAXABLE

6 YEAR.—Except in the case of a taxable year closed

7 by reason of the death of the taxpayer, no credit

8 shall be allowable under this section in the case of

9 a taxable year covering a period of less than 12

10 months.’’.

11 (b) CONFORMING AMENDMENTS.—

12 (1) Paragraph (2) of section 1324(b) of title

13 31, United States Code, is amended by inserting be14 fore the period ‘‘, or from section 35 of such Code’’.

15 (2) The table of sections for subpart C of part

16 IV of subchapter A of chapter 1 of the Internal Rev17 enue Code of 1986 is amended by striking the last

18 item and inserting the following new items:

‘‘Sec. 35. Grandparents providing primary child care for grandchildren who are not their dependents.

‘‘Sec. 36. Overpayments of tax.’’.

19 (c) EFFECTIVE DATE.—

20 (1) IN GENERAL.—The amendments made by

21 this section shall apply to taxable years beginning

22 with or after the taxable year with respect to which

23 the conditions specified in paragraph (2) are satis24 fied.
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1 (2) TRIGGER MECHANISM.—The conditions

2 specified in this paragraph are the following:

3 (A) The credit under section 21 of the In4 ternal Revenue Code of 1986 (relating to ex5 penses for household and dependent care serv6 ices necessary for gainful employment)—

7 (i) is refundable,

8 (ii) is available at a maximum level to

9 those with an adjusted gross income limit

10 of not less than $30,000 per year, indexed

11 for inflation,

12 (iii) is available at a minimal level to

13 those with an adjusted gross income of not

14 less than $60,000 per year, indexed for in15 flation, and

16 (iv) is available to parents of infants

17 ages 0-12 months without regard to out-of18 pocket child care expenses of the parents.

19 (B) The maximum amount of employment20 related expenses that can be taken into account

21 under section 21 of such Code is indexed for in22 flation.
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1 (C) The applicable percentage of expenses

2 that are allowed under section 21 of such Code

3 is increased to not less than 50 percent.

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