I

106TH CONGRESS

1ST SESSION H. R. 847

To amend the Internal Revenue Code of 1986 to make the dependent care

tax credit refundable and to increase the amount of allowable dependent

care expenses.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 24, 1999

Mr. WEYGAND (for himself and Mr. SHOWS) 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 make

the dependent care tax credit refundable and to increase

the amount of allowable dependent care expenses.

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 ‘‘Care Givers Tax Re5 duction Act of 1999’’.

6 SEC. 2. DEPENDENT CARE TAX CREDIT.

7 (a) MAKING CREDIT REFUNDABLE.—Part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of

9 1986 is amended—
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1 (1) in subpart C (relating to refundable credits)

2 by redesignating section 35 as section 36, and

3 (2) by moving section 21 to subpart C, insert4 ing it after section 34, and redesignating it as sec5 tion 35.

6 (b) INCREASE IN ALLOWABLE EXPENSES.—Sub7 section (c) of section 35 of such Code (as redesignated

8 by subsection (a) of this section) is amended—

9 (1) in paragraph (1) by striking ‘‘$2,400’’ and

10 inserting ‘‘$4,000’’, and

11 (2) in paragraph (2) by striking ‘‘$4,800’’ and

12 inserting ‘‘$8,000’’.

13 (c) CHANGE IN PHASEDOWN.—Paragraph (2) of sec14 tion 35(a) of such Code (as redesignated by subsection

15 (a) of this section) is amended to read as follows:

16 ‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For

17 purposes of paragraph (1), the term ‘applicable per18 centage’ means 30 percent reduced (but not below

19 12 percent) by 1 percentage point for each $3,000

20 (or fraction thereof) by which the taxpayer’s ad21 justed gross income for the taxable year exceeds

22 $18,000.’’

23 (d) INFLATION ADJUSTMENT.—Section 35 of such

24 Code (as redesignated by subsection (a) of this section)

25 is amended by redesignating subsection (f) as subsection
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1 (g) and by adding after subsection (e) the following new

2 subsection:

3 ‘‘(f) INFLATION ADJUSTMENT.—

4 ‘‘(1) IN GENERAL.—In the case of a taxable

5 year beginning after 1999, each of the dollar

6 amounts in subsection (c) shall be increased by an

7 amount equal to—

8 ‘‘(A) such dollar amount, multiplied by

9 ‘‘(B) the cost-of-living adjustment deter10 mined under section 1(f)(3) for the calendar

11 year in which the taxable year begins, deter12 mined by substituting ‘‘calendar year 1998’’ for

13 ‘‘calendar year 1992’’ in subparagraph (B)

14 thereof.

15 ‘‘(2) ROUNDING.—If any amount as adjusted

16 under paragraph (1) is not a multiple of $50, such

17 amount shall be rounded to the next lowest multiple

18 of $50.’’.

19 (e) CONFORMING AMENDMENTS.—

20 (1) Section 23(f)(1) of such Code is amended

21 by striking ‘‘section 21(e)’’ and inserting ‘‘section

22 35(e)’’.

23 (2) Section 129 of such Code is amended—

24 (A) in subsection (a)(2)(C) by striking

25 ‘‘section 21(e)’’ and inserting ‘‘section 35(e)’’,
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1 (B) in subsection (b)(2) by striking ‘‘sec2 tion 21(d)(2)’’ and inserting ‘‘section 35(d)(2)’’,

3 and

4 (C) in subsection (e)(1) by striking ‘‘sec5 tion 21(b)(2)’’ and inserting ‘‘section 35(b)(2)’’.

6 (3) Section 213(e) of such Code is amended by

7 striking ‘‘section 21’’ and inserting ‘‘section 35’’.

8 (4) Subparagraphs (H) and (L) of section

9 6213(g)(2) of such Code are each amended by strik10 ing ‘‘section 21’’ and inserting ‘‘section 35’’.

11 (f) CLERICAL AMENDMENTS.—

12 (1) The table of sections for subpart A of part

13 IV of subchapter A of chapter 1 of such Code (relat14 ing to refundable credits) is amended by striking the

15 item relating to section 21.

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

17 IV of subchapter A of chapter 1 of such Code (relat18 ing to refundable credits) is amended by striking the

19 item relating to section 35 and inserting the follow20 ing new items:

‘‘Sec. 35. Expenses for household and dependent services necessary for gainful employment.

‘‘Sec. 36. Overpayments of tax.’’

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

22 this section shall apply to expenses incurred after Decem23 ber 31, 1999.

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