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103D CONGRESS

2D SESSION H. R. 5281

To amend the Internal Revenue Code of 1986 to provide a tax credit to

all families with young children, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 7, 1994

Mr. SMITH of Michigan (for himself, Mr. MCCOLLUM, Mr. PETRI, and Mr.

SOLOMON) 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 provide

a tax credit to all families with young 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. TAX CREDIT FOR ALL FAMILIES WITH YOUNG

4 CHILDREN.

5 (a) GENERAL RULE.—Paragraph (1) of section 21(a)

6 of the Internal Revenue Code of 1986 is amended to read

7 as follows:

8 ‘‘(1) IN GENERAL.—In the case of an individual

9 who maintains a household which includes as a
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1 member 1 or more qualifying individuals, there shall

2 be allowed as a credit against the tax imposed by

3 this chapter for the taxable year an amount equal to

4 the sum of—

5 ‘‘(A) the applicable percentage of $2,400

6 for each young qualifying individual, and

7 ‘‘(B) the applicable percentage of the em8 ployment-related expenses paid by such individ9 ual during the taxable year with respect to dis10 abled qualifying individuals.’’

11 (b) CONFORMING AMENDMENTS.—

12 (1) Paragraph (1) of section 21(b) of such Code

13 is amended by striking ‘‘13’’ and inserting ‘‘5’’.

14 (2) Paragraph (2) of section 21(b) of such Code

15 is amended—

16 (A) by striking ‘‘qualifying individuals’’ in

17 subparagraph (A) and inserting ‘‘disabled quali18 fying individuals’’,

19 (B) by striking ‘‘qualifying individual’’

20 each place it appears in subparagraph (A) and

21 inserting ‘‘disabled qualifying individual’’, and

22 (C) by amending subparagraph (B) to read

23 as follows:

24 ‘‘(B) EXCEPTION.—Employment-related

25 expenses described in subparagraph (A) which
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1 are incurred for services outside the taxpayer’s

2 household shall be taken into account only if in3 curred for the care of a disabled qualifying indi4 vidual who regularly spends at least 8 hours

5 each day in the taxpayer’s household.’’

6 (3) Subsection (b) of section 21 of such Code

7 is amended by adding at the end the following new

8 paragraphs:

9 ‘‘(3) YOUNG QUALIFYING INDIVIDUAL.—The

10 term ‘young qualifying individual’ means any quali11 fying individual described in subparagraph (A) of

12 paragraph (1).

13 ‘‘(4) DISABLED QUALIFYING INDIVIDUAL.—The

14 term ‘disabled qualifying individual’ means any dis15 qualifying individual described in subparagraph (B)

16 or (C) of paragraph (1).’’

17 (4) Subsection (c) of section 21 of such Code

18 is amended to read as follows:

19 ‘‘(c) LIMITATION ON CREDIT.—The amount of the

20 credit determined under subsection (a) for any taxable

21 year shall not exceed—

22 ‘‘(1) the applicable percentage of $2,400, or

23 ‘‘(2) if there are 2 or more qualifying individ24 uals with respect to the taxpayer for such taxable

25 year, the applicable percentage of $4,800.
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1 The amount determined under paragraph (1) or (2)

2 (whichever is applicable) shall be reduced by the applicable

3 percentage of the aggregate amount excludable from gross

4 income under section 129 for the taxable year.’’

5 (5) Subparagraph (B) of section 21(e)(5) of

6 such Code is amended by striking ‘‘13’’ and insert7 ing ‘‘5’’.

8 (6) The section heading for section 21 of such

9 Code is amended to read as follows:

10 ‘‘SEC. 21. CREDIT FOR HOUSEHOLDS WITH YOUNG CHIL11 DREN AND FOR EMPLOYMENT-RELATED EX12 PENSES FOR DISABLED DEPENDENTS.’’

13 (7) The table of sections for subpart A of part

14 IV of subchapter A of chapter 1 of such Code is

15 amended by striking the item related to section 21

16 and inserting:

‘‘Sec. 21. Credit for households with young children and for employment-related

expenses for disabled dependents.’’

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

18 this section shall apply to taxable years beginning after

19 December 31, 1993.

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