II 

115TH CONGRESS 

1ST SESSION S. 208 

To amend the Internal Revenue Code of 1986 to make the Child and 

Dependent Care Tax Credit fully refundable, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 24, 2017 

Mr. KING (for himself and Mr. BURR) 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 make 

the Child and Dependent Care Tax Credit fully refundable, 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 ‘‘Promoting Affordable 

5 Childcare for Everyone Act’’ or the ‘‘PACE Act’’. 

6 SEC. 2. REFUNDABILITY OF CHILD AND DEPENDENT CARE 

7 TAX CREDIT. 

8 (a) IN GENERAL.—The Internal Revenue Code of 

9 1986 is amended— 


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1 (1) by redesignating section 21 as section 36C, 

2 and 

3 (2) by moving section 36C, as so redesignated, 

4 from subpart A of part IV of subchapter A of chap5 ter 1 to the location immediately before section 37 

6 in subpart C of part IV of subchapter A of chapter 

7 1. 

8 (b) TECHNICAL AMENDMENTS.— 

9 (1) Paragraph (1) of section 23(f) of the Inter10 nal Revenue Code of 1986 is amended by striking 

11 ‘‘21(e)’’ and inserting ‘‘36C(e)’’. 

12 (2) Paragraph (6) of section 35(g) of such Code 

13 is amended by striking ‘‘21(e)’’ and inserting 

14 ‘‘36C(e)’’. 

15 (3) Paragraph (1) of section 36C(a) of such 

16 Code (as redesignated by subsection (a)) is amended 

17 by striking ‘‘this chapter’’ and inserting ‘‘this sub18 title’’. 

19 (4) Subparagraph (C) of section 129(a)(2) of 

20 such Code is amended by striking ‘‘section 21(e)’’ 

21 and inserting ‘‘section 36C(e)’’. 

22 (5) Paragraph (2) of section 129(b) of such 

23 Code is amended by striking ‘‘section 21(d)(2)’’ and 

24 inserting ‘‘section 36C(d)(2)’’. 


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1 (6) Paragraph (1) of section 129(e) of such 

2 Code is amended by striking ‘‘section 21(b)(2)’’ and 

3 inserting ‘‘section 36C(b)(2)’’. 

4 (7) Subsection (e) of section 213 of such Code 

5 is amended by striking ‘‘section 21’’ and inserting 

6 ‘‘section 36C’’. 

7 (8) Subparagraph (H) of section 6213(g)(2) of 

8 such Code is amended by striking ‘‘section 21’’ and 

9 inserting ‘‘section 36C’’. 

10 (9) Subparagraph (L) of section 6213(g)(2) of 

11 such Code is amended by striking ‘‘section 21, 24, 

12 or 32,’’ and inserting ‘‘section 24, 32, or 36C,’’. 

13 (10) Paragraph (2) of section 1324(b) of title 

14 31, United States Code, is amended by inserting 

15 ‘‘36C,’’ after ‘‘36B,’’. 

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

17 IV of subchapter A of chapter 1 of the Internal Rev18 enue Code of 1986 is amended by inserting after the 

19 item relating to section 36B the following: 

‘‘Sec. 36C. Expenses for household and dependent care services necessary for 

gainful employment.’’. 

20 (12) The table of sections for subpart A of such 

21 part IV is amended by striking the item relating to 

22 section 21. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2017. 

4 SEC. 3. ENHANCEMENT OF THE CHILD AND DEPENDENT 

5 CARE TAX CREDIT. 

6 (a) IN GENERAL.—Section 36C of the Internal Rev7 enue Code of 1986, as redesignated by section 2 of this 

8 Act, is amended— 

9 (1) in paragraph (1) of subsection (a), by strik10 ing ‘‘35 percent reduced (but not below 20 percent)’’ 

11 and inserting ‘‘50 percent reduced (but not below 35 

12 percent)’’, 

13 (2) by redesignating subsection (f) as sub14 section (g), and 

15 (3) by inserting after subsection (e) the fol16 lowing new subsection: 

17 ‘‘(f) INFLATION ADJUSTMENT.— 

18 ‘‘(1) IN GENERAL.—In the case of any taxable 

19 year beginning after 2017, each of the dollar 

20 amounts in subsections (a)(2) and (c) shall be in21 creased by an amount equal to— 

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

23 ‘‘(B) the cost-of-living adjustment deter24 mined under section 1(f)(3) for the calendar 

25 year in which the taxable year begins, deterVerDate Sep 11 2014 22:01 Feb 01, 2017 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S208.IS S208

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1 mined by substituting ‘calendar year 2016’ for 

2 ‘calendar year 1992’ in subparagraph (B) 

3 thereof. 

4 ‘‘(2) ROUNDING.—If any increase determined 

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

6 increase shall be rounded to the nearest multiple of 

7 $50.’’. 

8 (b) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2017. 

11 SEC. 4. INCREASE IN EXCLUSION FOR EMPLOYER-PRO12 VIDED DEPENDENT CARE ASSISTANCE. 

13 (a) IN GENERAL.—Subparagraph (A) of section 

14 129(a)(2) of the Internal Revenue Code of 1986 (relating 

15 to dependent care assistance programs) is amended by 

16 striking ‘‘$5,000 ($2,500’’ and inserting ‘‘$7,500 (half 

17 such dollar amount’’. 

18 (b) INFLATION ADJUSTMENT.—Paragraph (2) of sec19 tion 129(a) of such Code is amended by redesignating sub20 paragraph (C) as subparagraph (D) and by inserting after 

21 subparagraph (B) the following new subparagraph: 

22 ‘‘(C) INFLATION ADJUSTMENT.—In the 

23 case of any taxable year beginning in a calendar 

24 year after 2018, the $7,500 amount in subparaVerDate Sep 11 2014 22:01 Feb 01, 2017 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S208.IS S208

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1 graph (A) shall be increased by an amount 

2 equal to— 

3 ‘‘(i) such dollar amount, multiplied by 

4 ‘‘(ii) the cost-of-living adjustment de5 termined under section 1(f)(3) for the cal6 endar year in which the taxable year be7 gins, determined by substituting ‘calendar 

8 year 2017’ for ‘calendar year 1992’ in sub9 paragraph (B) thereof. 

10 Any increase determined under the preceding 

11 sentence shall be rounded to the nearest mul12 tiple of $100.’’. 

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

14 this section shall apply to taxable years beginning after 

15 December 31, 2017. 

Æ 


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