II 

115TH CONGRESS 

1ST SESSION S. 2024 

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

foster families. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 26, 2017 

Ms. HEITKAMP (for herself and Mr. KAINE) 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 create 

a tax credit for foster families. 

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 ‘‘Foster Care Tax Cred5 it Act’’. 

6 SEC. 2. FOSTER CARE TAX CREDIT. 

7 (a) ALLOWANCE OF CREDIT.— 

8 (1) IN GENERAL.—Subpart A of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code 


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1 of 1986 is amended by inserting after section 25D 

2 the following new section: 

3 ‘‘SEC. 25E. FOSTER CARE TAX CREDIT. 

4 ‘‘(a) ALLOWANCE OF CREDIT.—With respect to each 

5 qualifying foster child of an eligible taxpayer, for each cal6 endar month occurring during the taxable year that such 

7 child resides in the home of such taxpayer, there shall be 

8 allowed as a credit against the tax imposed by this chapter 

for the taxable year an amount equal to 1 9 ⁄12 of the amount 

10 determined under subsection (b). 

11 ‘‘(b) AMOUNT DETERMINED.— 

12 ‘‘(1) IN GENERAL.—The amount determined 

13 under this subsection with respect to an eligible tax14 payer and a taxable year is— 

15 ‘‘(A) $1,000, reduced by 

16 ‘‘(B) $50 for each $1,000 (or fraction 

17 thereof) by which the eligible taxpayer’s modi18 fied adjusted gross income exceeds the thresh19 old amount. 

20 For purposes of the preceding sentence, the term 

21 ‘modified adjusted gross income’ means adjusted 

22 gross income increased by any amount excluded 

23 from gross income under section 911, 931, or 933. 


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1 ‘‘(2) THRESHOLD AMOUNT.—For purposes of 

2 paragraph (1), the term ‘threshold amount’ has the 

3 meaning given such term by section 24(b)(2). 

4 ‘‘(c) QUALIFYING FOSTER CHILD.—For purposes of 

5 this section, the term ‘qualifying foster child’ means an 

6 eligible foster child (within the meaning of section 

7 152(f)(1)(C)) of the eligible taxpayer— 

8 ‘‘(1) who has not attained age 17, 

9 ‘‘(2) who is a citizen, national, or resident of 

10 the United States, 

11 ‘‘(3) who resides in the home of the eligible tax12 payer for not less than 1 calendar month during the 

13 taxable year, and 

14 ‘‘(4) with respect to whom the credit under sec15 tion 24 is not allowable to the eligible taxpayer or 

16 any other taxpayer who would be an eligible tax17 payer but for paragraph (3) of subsection (d). 

18 ‘‘(d) ELIGIBLE TAXPAYER.—For purposes of this 

19 section, the term ‘eligible taxpayer’ means any taxpayer, 

20 except that— 

21 ‘‘(1) no single household shall include more 

22 than 1 eligible taxpayer, 

23 ‘‘(2) married individuals filing a joint return 

24 shall be treated as 1 eligible taxpayer, and 


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1 ‘‘(3) in the case of individuals not described in 

2 paragraph (2) who are members of the same house3 hold, only the taxpayer with the highest adjusted 

4 gross income for the taxable year shall be treated as 

5 an eligible taxpayer. 

6 ‘‘(e) CALENDAR MONTH.—For purposes of this sec7 tion, if a foster child resides in the home of the taxpayer 

8 for more than 15 consecutive days of a calendar month 

9 but fewer than the total number of days in such calendar 

10 month, such foster child shall be treated as residing in 

11 the home of the taxpayer for the full calendar month. 

12 ‘‘(f) PORTION OF CREDIT REFUNDABLE.— 

13 ‘‘(1) IN GENERAL.—The aggregate credits al14 lowed to a taxpayer under subpart C shall be in15 creased by the lesser of— 

16 ‘‘(A) the credit which would be allowed 

17 under this section without regard to this sub18 section and the limitation under section 26(a) 

19 (determined after any reduction of the credit 

20 under section 24(a) by reason of section 24(d)), 

21 or 

22 ‘‘(B) the amount by which the aggregate 

23 amount of credits allowed by this subpart (de24 termined without regard to this subsection, and 

25 after any reduction of the credit under section 


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1 24(a) by reason of section 24(d)) would in2 crease if the limitation imposed by section 26(a) 

3 were increased by the greater of— 

4 ‘‘(i) 15 percent of so much of the tax5 payer’s earned income (within the meaning 

6 of section 32) which is taken into account 

7 in computing taxable income for the tax8 able year as exceeds $3,000, or 

9 ‘‘(ii) in the case of a taxpayer with 3 

10 or more qualifying foster children residing 

11 in the home of the taxpayer for all months 

12 in the taxable year (without regard to 

13 whether the same 3 children reside in the 

14 home of the taxpayer for all such months), 

15 the excess (if any) of— 

16 ‘‘(I) the taxpayer’s social security 

17 taxes for the taxable year, over 

18 ‘‘(II) the credit allowed under 

19 section 32 for the taxable year. 

20 The amount of the credit allowed under 

21 this subsection shall not be treated as a 

22 credit allowed under this subpart and shall 

23 reduce the amount of credit otherwise al24 lowable under subsection (a) without re25 gard to section 26(a). For purposes of subVerDate Sep 11 2014 01:13 Oct 28, 2017 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2024.IS S2024

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1 paragraph (B), any amount excluded from 

2 gross income by reason of section 112 shall 

3 be treated as earned income which is taken 

4 into account in computing taxable income 

5 for the taxable year. 

6 ‘‘(2) SOCIAL SECURITY TAXES.—For purposes 

7 of paragraph (1), the term ‘social security taxes’ has 

8 the same meaning as when used in section 24(d)(1). 

9 ‘‘(g) IDENTIFICATION REQUIREMENTS.— 

10 ‘‘(1) QUALIFYING CHILD IDENTIFICATION RE11 QUIREMENT.—No credit shall be allowed under this 

12 section to an eligible taxpayer with respect to any 

13 qualifying foster child unless the taxpayer includes 

14 the name and taxpayer identification number of such 

15 qualifying foster child on the return of tax for the 

16 taxable year and such taxpayer identification num17 ber was issued on or before the due date for filing 

18 such return. 

19 ‘‘(2) TAXPAYER IDENTIFICATION REQUIRE20 MENT.—No credit shall be allowed under this section 

21 if the identifying number of the eligible taxpayer was 

22 issued after the due date for filing the return for the 

23 taxable year. 

24 ‘‘(h) RESTRICTIONS ON TAXPAYERS WHO IMPROP25 ERLY CLAIMED CREDIT IN PRIOR YEAR.— 


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1 ‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT

2 OR RECKLESS CLAIMS.— 

3 ‘‘(A) IN GENERAL.—No credit shall be al4 lowed under this section for any taxable year in 

5 the disallowance period. 

6 ‘‘(B) DISALLOWANCE PERIOD.—For pur7 poses of subparagraph (A), the disallowance pe8 riod is— 

9 ‘‘(i) the period of 10 taxable years 

10 after the most recent taxable year for 

11 which there was a final determination that 

12 the taxpayer’s claim of credit under this 

13 section was due to fraud, and 

14 ‘‘(ii) the period of 2 taxable years 

15 after the most recent taxable year for 

16 which there was a final determination that 

17 the taxpayer’s claim of credit under this 

18 section was due to reckless or intentional 

19 disregard of rules and regulations (but not 

20 due to fraud). 

21 ‘‘(2) TAXPAYERS MAKING IMPROPER PRIOR

22 CLAIMS.—In the case of a taxpayer who is denied 

23 credit under this section for any taxable year as a 

24 result of the deficiency procedures under subchapter 

25 B of chapter 63, no credit shall be allowed under 


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1 this section for any subsequent taxable year unless 

2 the taxpayer provides such information as the Sec3 retary may require to demonstrate eligibility for 

4 such credit.’’. 

5 (2) CONFORMING AMENDMENTS.— 

6 (A) Section 6211(b)(4) of the Internal 

7 Revenue Code of 1986 is amended by ‘‘inserting 

8 25E(f),’’ before ‘‘32,’’. 

9 (B) Section 1324(b)(2) of title 31, United 

10 States Code, is amended by inserting ‘‘25E,’’ 

11 after ‘‘25A,’’. 

12 (C) The table of sections for subpart A of 

13 part IV of subchapter A of chapter 1 of the In14 ternal Revenue Code of 1986 is amended by in15 serting after the item relating to section 25D 

16 the following new item: 

‘‘Sec. 25E. Foster care tax credit.’’. 

17 (b) APPLICATION OF TAX RETURN PREPARER DUE

18 DILIGENCE PENALTY.—Section 6695(g) of the Internal 

19 Revenue Code of 1986 is amended by inserting ‘‘25E,’’ 

20 after ‘‘25A(a)(1),’’. 

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

22 this section shall apply to calendar months beginning after 

23 December 31, 2017, in taxable years beginning after such 

24 date. 


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1 (d) EDUCATION.—The Secretary of Health and 

2 Human Services (or the Secretary’s delegate), in coordina3 tion with the Secretary of the Treasury or such Sec4 retary’s delegate, shall identify provisions in the Internal 

5 Revenue Code of 1986 that can be used by or can benefit 

6 foster families, and shall increase outreach efforts to pro7 vide information and educational materials regarding such 

8 provisions to State and Indian tribal foster care agencies 

9 and to foster families. 

Æ 


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