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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1305 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 1305

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

                             June 23, 2005

 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Parents' Tax Relief Act of 2005''.

SEC. 2. MINIMUM DEPENDENT CARE CREDIT FOR PARENTS CARING FOR CHILDREN 
              AT HOME.

    (a) In General.--Subsection (e) of section 21 of the Internal 
Revenue Code of 1986 (relating to special rules) is amended by adding 
at the end the following new paragraph:
            ``(11) Minimum credit allowed for stay-at-home parents.--In 
        the case of any taxpayer with one or more qualifying 
        individuals described in subparagraph (A) of subsection (b)(1) 
        under the age of 6 at any time during the taxable year, such 
        taxpayer shall be deemed to have employment-related expenses 
        with respect to each such qualifying individual and earned 
        income in an amount equal to the greater of--
                    ``(A) the amount of employment-related expenses 
                incurred for such qualifying individuals for the 
                taxable year (determined under this section without 
                regard to this paragraph), or
                    ``(B) $250 for each month beginning in such taxable 
                year with respect to which such qualifying individual 
                has not attained age 6 as of the beginning of such 
                month.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2004.

SEC. 3. INCREASE IN PERSONAL EXEMPTION AMOUNT.

    (a) In General.--Paragraph (1) of section 151(d) of the Internal 
Revenue Code of 1986 is amended by striking ``$2,000'' and inserting 
``$5,000''.
    (b) Inflation Adjustment.--Subparagraph (A) of section 151(d)(4) of 
such Code is amended--
            (1) by striking ``1989'' and inserting ``2005'', and
            (2) by striking ``1988'' in clause (ii) and inserting 
        ``2004''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 4. ELIMINATION OF MARRIAGE PENALTY IN ALL RATE BRACKETS.

    (a) In General.--Paragraph (8) of section 1(f) of the Internal 
Revenue Code of 1986 (relating to phaseout of marriage penalty in 15-
percent bracket) is amended to read as follows:
            ``(8) Elimination of marriage penalty.--With respect to 
        taxable years beginning after December 31, 2004, in prescribing 
        the tables under paragraph (1)--
                    ``(A) the minimum and maximum amounts of taxable 
                income in each rate bracket in the table contained in 
                subsection (a) shall be 200 percent of the minimum and 
                maximum amounts of taxable income in the corresponding 
                rate bracket in the table contained in subsection (c) 
                (after any other adjustment under this subsection), and
                    ``(B) the comparable taxable income amounts in the 
                table contained in subsection (d) shall be \1/2\ of the 
                amounts determined under subparagraph (A).''.
    (b) Effective Date.--The amendment made by this section apply to 
taxable years beginning after December 31, 2004.

SEC. 5. STANDARD DEDUCTION FOR BUSINESS USE OF HOME.

    (a) In General.--Subsection (c) of section 280A of the Internal 
Revenue Code of 1986 (relating to disallowance of certain expenses in 
connection with business use of home, rental of vacation homes, etc.) 
is amended by adding at the end the following new paragraph:
            ``(7) Standard home office deduction.--
                    ``(A) In general.--In the case of an individual 
                that is allowed a deduction for the use of a home 
                office because of a use described in paragraphs (1), 
                (2), or (4) of this subsection, notwithstanding the 
                limitations of paragraph (5), such individual may elect 
                to use the standard home office deduction for the 
                taxable year.
                    ``(B) Standard home office deduction amount.--For 
                purposes of this paragraph, the standard home office 
                deduction is the lesser of--
                            ``(i) $2,500, or
                            ``(ii) the gross income derived from the 
                        individual's trade or business for which such 
                        use occurs.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 6. INCREASE AND OTHER MODIFICATIONS IN CHILD TAX CREDIT MADE 
              PERMANENT.

    (a) In General.--Title IX of the Economic Growth and Tax Relief 
Reconciliation Act of 2001 shall not apply to the amendments made by 
section 201 of such Act (relating to modifications to child tax 
credit).
    (b) Credit Amount Adjusted for Inflation.--Section 24 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
    ``(g) Inflation Adjustment.--In the case of any taxable year 
beginning in a calendar year after 2005, the $1,000 amount contained in 
subsection (a) shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `calendar year 2004' for 
        `calendar year 1992' in subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be rounded 
to the nearest multiple of $50.''.

SEC. 7. TELECOMMUTING TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45J. TELECOMMUTING CREDIT.

    ``(a) Determination of Amount.--For purposes of section 38, the 
amount of the telecommuting credit determined under this section for 
the taxable year shall be equal to 40 percent of the qualified first-
year wages for such year.
    ``(b) Qualified First-Year Wages.--For purposes of this section--
            ``(1) In general.--The term `qualified first-year wages' 
        means, with respect to any individual, qualified wages 
        attributable to service rendered during the 1-year period 
        beginning with the day the individual begins work for the 
        employer.
            ``(2) Qualified wages.--The term `qualified wages' means 
        the wages paid or incurred by the employer during the taxable 
        year to qualified telecommuters.
            ``(3) Only first $6,000 of wages per year taken into 
        account.--The amount of the qualified first-year wages which 
        may be taken into account with respect to any individual shall 
        not exceed $6,000 per year.
    ``(c) Qualified Telecommuter.--For purposes of this section, the 
term `qualified telecommuter' means any individual who renders not less 
than 40 percent of the service described in subsection (b)(2) from the 
individual's principal residence.
    ``(d) Wages.--For purposes of this section--
            ``(1) In general.--The term `wages' has the meaning given 
        to such term by subsection (b) of section 3306 (determined 
        without regard to any dollar limitation contained in such 
        section).
            ``(2) On-the-job training and work supplementation 
        payments.--
                    ``(A) Exclusion for employers receiving on-the-job 
                training payments.--The term `wages' shall not include 
                any amounts paid or incurred by an employer for any 
                period to any individual for whom the employer receives 
                federally funded payments for on-the-job training of 
                such individual for such period.
                    ``(B) Reduction for work supplementation payments 
                to employers.--The amount of wages which would (but for 
                this subparagraph) be qualified wages under this 
                section for an employer with respect to an individual 
                for a taxable year shall be reduced by an amount equal 
                to the amount of the payments made to such employer 
                (however utilized by such employer) with respect to 
                such individual for such taxable year under a program 
                established under section 482(e) of the Social Security 
                Act.
    ``(e) Special Rules.--For purposes of this section, rules similar 
to the rules of section 52 and subsections (f), (g), (i), (j), and (k) 
of section 51 shall apply.''.
    (b) Credit Treated as Business Credit.--Section 38(b) of such Code 
is amended by striking ``plus'' at the end of paragraph (18), by 
striking the period at the end of paragraph (19) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(20) the telecommuting credit determined under section 
        45J(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

``Sec. 45J. Telecommuting credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable year beginning after December 31, 2004.

SEC. 8. EMPLOYER-PROVIDED COMPUTER EQUIPMENT TREATED AS FRINGE BENEFIT.

    (a) In General.--Subsection (a) of section 132 of the Internal 
Revenue Code of 1986 is amended by striking ``or'' at the end of 
paragraph (7), by striking the period at the end of paragraph (8) and 
inserting ``, or'', and by adding at the end the following new 
paragraph:
            ``(9) qualified employer-provided computer equipment 
        fringe.''.
    (b) Qualified Employer-Provided Computer Equipment Fringe.--Section 
132 of such Code is amended by adding at the end the following new 
subsection:
    ``(o) Qualified Employer-Provided Computer Equipment Fringe.--For 
purposes of this section--
            ``(1) In general.--The term `qualified employer-provided 
        computer equipment fringe' means any computer and related 
        equipment and services provided to an employee by an employer 
        if--
                    ``(A) such computer and related equipment and 
                services are necessary for the employee to perform work 
                for the employer from the employee's home, and
                    ``(B) the employee makes substantial business use 
                of the equipment in the performance of work for the 
                employer.
            ``(2) Substantial use.--For purposes of paragraph (1), the 
        term `substantial business use' includes standby use for 
        periods when work from home may be required by the employer 
        such as during work closures caused by the threat of terrorism, 
        inclement weather, or natural disasters.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 9. INCREASED BENEFITS FOR INDIVIDUALS PRECLUDED FROM PERFORMING 
              REMUNERATIVE WORK BY NEED TO PROVIDE CHILD CARE.

    Title II of the Social Security Act (42 U.S.C. 401 et seq.) is 
amended by adding at the end the following new section:

    ``increased benefits for individuals precluded from performing 
            remunerative work by need to provide child care

    ``Sec. 235. (a) General Rule.--For purposes of determining 
entitlement to and the amount of any monthly benefit or lump-sum death 
payment payable under this title on the basis of the wages and self-
employment income of any individual, and for purposes of section 
216(i)(3), if such individual--
            ``(1) is not otherwise credited under this title, for one 
        or more of such individual's elapsed years (referred to in 
        section 215(b)(3)), with wages at least equal to the national 
        average wage index (as defined in section 209(k)) for such 
        year, and
            ``(2) is a qualified individual in connection with any such 
        elapsed year after 2005,
then such individual shall be credited under this title for such year 
after 2005 with additional wages in an amount necessary to increase the 
total wages credited to such individual under this title for such year 
to an amount equal to the national average wage index (as so defined) 
for such year.
    ``(b) Qualified Individual.--For purposes of this section, the term 
`qualified individual' means, in connection with any year, any 
individual in any case in which--
            ``(1) such individual is married for a period during such 
        year of not less than 90 days,
            ``(2) throughout such period during such year, such 
        individual and such individual's spouse live with a qualified 
        child, and
            ``(3) more than 50 percent of the total remuneration of 
        such individual and such individual's spouse for such year 
        which is attributable to wages or self-employment income earned 
        or derived during the period during such year for which the 
        requirements of paragraphs (1) and (2) are met consists of 
        wages or self-employment income earned or derived away from 
        home by such spouse.
    ``(c) Qualified Child.--For purposes of this section, the term 
`qualified child' means, in connection with a qualified individual, a 
child of such individual (or such individual's spouse referred to in 
subsection (b)(2)) who--
            ``(1) is less than 6 years of age, or
            ``(2) is less than 10 years of age, is under a disability, 
        and is unable to attend school.
    ``(d) Limitation to 10 Elapsed Years.--In any case in which the 
requirements of subsection (a) are met in connection with more than 10 
elapsed years of an individual, subsection (a) shall apply only with 
respect to those elapsed years, not in excess of 10, which, when taken 
into account in the application of subsection (a), result in the 
highest primary insurance amount for such individual, taking into 
account which years would be excluded from benefit computation years 
under section 215(b)(2)(B)(i).
    ``(e) Protection of Trust Fund Balances.--There are authorized to 
be appropriated to each of the Trust Funds, consisting of the Federal 
Old-Age and Survivors Insurance Trust Fund, the Federal Disability 
Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund, 
for transfer on July 1 of each calendar year after 2005 to such Trust 
Fund from amounts in the general fund in the Treasury not otherwise 
appropriated, an amount equal to the total of the additional amounts 
which would be appropriated to such Trust Fund for the fiscal year 
ending September 30 of such calendar year under section 201 or 1817 of 
this Act if the amounts of the additional wages credited for such 
calendar year by reason of subsection (a) constituted remuneration for 
employment (as defined in section 3121(b) of the Internal Revenue Code 
of 1986) for purposes of the taxes imposed by sections 3101 and 3111 of 
the Internal Revenue Code of 1986. Amounts authorized to be 
appropriated under this subsection for transfer on July 1 of each 
calendar year shall be determined on the basis of estimates of the 
Commissioner of Social Security of the wages required to be credited 
for such calendar year under subsection (a); and proper adjustments 
shall be made in amounts authorized to be appropriated for subsequent 
transfer to the extent prior estimates were in excess of or were less 
than such wages so credited.''.
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