II

106TH CONGRESS

2D SESSION S. 2984

To amend the Internal Revenue Code of 1986 and to provide a refundable

caregivers tax credit.

IN THE SENATE OF THE UNITED STATES

JULY 27, 2000

Mr. CONRAD 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 and to provide

a refundable caregivers tax credit.

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 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Long-Term Caregivers Assistance Act of 2000’’.

6 SEC. 2. REFUNDABLE CREDIT FOR LONG-TERM CARE.

7 (a) GENERAL RULE.—Subpart C of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of

9 1986 (relating to refundable credits) is amended by redes-
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1 ignating section 35 as section 36 and by inserting after

2 section 34 the following new section:

3 ‘‘SEC. 35. LONG-TERM CARE TAX CREDIT.

4 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al5 lowed as a credit against the tax imposed by this chapter

6 for the taxable year an amount equal to the sum of $2,000

7 multiplied by the number of applicable individuals with re8 spect to whom the taxpayer is an eligible caregiver for the

9 taxable year.

10 ‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN11 COME.—

12 ‘‘(1) IN GENERAL.—The amount of the credit

13 allowable under subsection (a) shall be reduced (but

14 not below zero) by $50 for each $1,000 (or fraction

15 thereof) by which the taxpayer’s modified adjusted

16 gross income exceeds the threshold amount. For

17 purposes of the preceding sentence, the term ‘modi18 fied adjusted gross income’ means adjusted gross in19 come increased by any amount excluded from gross

20 income under section 911, 931, or 933.

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

22 paragraph (1), the term ‘threshold amount’ means—

23 ‘‘(A) $110,000 in the case of a joint re24 turn,
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1 ‘‘(B) $75,000 in the case of an individual

2 who is not married, and

3 ‘‘(C) $55,000 in the case of a married in4 dividual filing a separate return.

5 For purposes of this paragraph, marital status shall

6 be determined under section 7703.

7 ‘‘(c) DEFINITIONS.—For purposes of this section—

8 ‘‘(1) APPLICABLE INDIVIDUAL.—

9 ‘‘(A) IN GENERAL.—The term ‘applicable

10 individual’ means, with respect to any taxable

11 year, any individual who has been certified, be12 fore the due date for filing the return of tax for

13 the taxable year (without extensions), by a phy14 sician (as defined in section 1861(r)(1) of the

15 Social Security Act) as being an individual with

16 long-term care needs described in subparagraph

17 (B) for a period—

18 ‘‘(i) which is at least 180 consecutive

19 days, and

20 ‘‘(ii) a portion of which occurs within

21 the taxable year.

22 Such term shall not include any individual oth23 erwise meeting the requirements of the preceding sentence unless within the 391 24 ⁄2 month

25 period ending on such due date (or such other
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1 period as the Secretary prescribes) a physician

2 (as so defined) has certified that such indi3 vidual meets such requirements.

4 ‘‘(B) INDIVIDUALS WITH LONG-TERM CARE

5 NEEDS.—An individual is described in this sub6 paragraph if the individual meets any of the fol7 lowing requirements:

8 ‘‘(i) The individual is at least 6 years

9 of age and—

10 ‘‘(I) is unable to perform (with11 out substantial assistance from an12 other individual) at least 3 activities

13 of daily living (as defined in section

14 7702B(c)(2)(B)) due to a loss of

15 functional capacity, or

16 ‘‘(II) requires substantial super17 vision to protect such individual from

18 threats to health and safety due to se19 vere cognitive impairment and is un20 able to perform at least 1 activity of

21 daily living (as so defined) or to the

22 extent provided in regulations pre23 scribed by the Secretary (in consulta24 tion with the Secretary of Health and
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1 Human Services), is unable to engage

2 in age appropriate activities, or

3 ‘‘(III) requires substantial super4 vision to protect such individual from

5 threats to health and safety due to a

6 severe psychological disability, mental

7 retardation, or related developmental

8 disabilities and would otherwise re9 quire residence in a psychiatric hos10 pital, an intermediate care facility for

11 the mentally retarded, or similar resi12 dential facility approved by the Sec13 retary of Health and Human Services.

14 ‘‘(ii) The individual is at least 2 but

15 not 6 years of age and is unable due to a

16 loss of functional capacity to perform

17 (without substantial assistance from an18 other individual) at least 2 of the following

19 activities: eating, transferring, or mobility.

20 ‘‘(iii) The individual is under 2 years

21 of age and requires specific durable med22 ical equipment by reason of a severe health

23 condition or requires a skilled practitioner

24 trained to address the individual’s condi-
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1 tion to be available if the individual’s par2 ents or guardians are absent.

3 ‘‘(C) PSYCHOLOGICAL DISABILITY DE4 FINED.—In this section, the term ‘psychological

5 disability’ shall refer to diagnosable clinical con6 ditions on Axis I or Axis II of the current edi7 tion of the American Psychiatric Association’s

8 Diagnostic and Statistical Manual of Mental

9 Disorders and is of a severity that requires sub10 stantial supervision or residence in a psychiatric

11 hospital or similar residential facility approved

12 by the Secretary.

13 ‘‘(D) MENTAL RETARDATION DEFINED.—

14 In this section, the term ‘mental retardation’

15 shall have the same meaning as ‘developmental

16 disabilities’ as defined in section 102 of the De17 velopmental Disabilities Assistance and Bill of

18 Rights Act (42 U.S.C. 6000) consistent with

19 the requirements of section 305(a)(2)(E) and is

20 of a severity that requires substantial super21 vision or residence in an intermediate care facil22 ity for the mentally retarded, or similar residen23 tial facility approved by the Secretary of Health

24 and Human Services.

25 ‘‘(2) ELIGIBLE CAREGIVER.—
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1 ‘‘(A) IN GENERAL.—A taxpayer shall be

2 treated as an eligible caregiver for any taxable

3 year with respect to the following individuals:

4 ‘‘(i) The taxpayer.

5 ‘‘(ii) The taxpayer’s spouse.

6 ‘‘(iii) An individual with respect to

7 whom the taxpayer is allowed a deduction

8 under section 151 for the taxable year.

9 ‘‘(iv) An individual who would be de10 scribed in clause (iii) for the taxable year

11 if section 151(c)(1)(A) were applied by

12 substituting for the exemption amount an

13 amount equal to the sum of the exemption

14 amount, the standard deduction under sec15 tion 63(c)(2)(C), and any additional stand16 ard deduction under section 63(c)(3) which

17 would be applicable to the individual if

18 clause (iii) applied.

19 ‘‘(v) An individual who would be de20 scribed in clause (iii) for the taxable year

21 if—

22 ‘‘(I) the requirements of clause

23 (iv) are met with respect to the indi24 vidual, and
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1 ‘‘(II) the requirements of sub2 paragraph (B) are met with respect to

3 the individual in lieu of the support

4 test of section 152(a).

5 ‘‘(B) RESIDENCY TEST.—The require6 ments of this subparagraph are met if an indi7 vidual has as his principal place of abode the

8 home of the taxpayer and—

9 ‘‘(i) in the case of an individual who

10 is an ancestor or descendant of the tax11 payer or the taxpayer’s spouse, is a mem12 ber of the taxpayer’s household for over

13 half the taxable year, or

14 ‘‘(ii) in the case of any other indi15 vidual, is a member of the taxpayer’s

16 household for the entire taxable year.

17 ‘‘(C) SPECIAL RULES WHERE MORE THAN

18 1 ELIGIBLE CAREGIVER.—

19 ‘‘(i) IN GENERAL.—If more than 1 in20 dividual is an eligible caregiver with re21 spect to the same applicable individual for

22 taxable years ending with or within the

23 same calendar year, a taxpayer shall be

24 treated as the eligible caregiver if each

25 such individual (other than the taxpayer)
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1 files a written declaration (in such form

2 and manner as the Secretary may pre3 scribe) that such individual will not claim

4 such applicable individual for the credit

5 under this section.

6 ‘‘(ii) NO AGREEMENT.—If each indi7 vidual required under clause (i) to file a

8 written declaration under clause (i) does

9 not do so, the individual with the highest

10 modified adjusted gross income (as defined

11 in section 32(c)(5)) shall be treated as the

12 eligible caregiver.

13 ‘‘(iii) MARRIED INDIVIDUALS FILING

14 SEPARATELY.—In the case of married indi15 viduals filing separately, the determination

16 under this subparagraph as to whether the

17 husband or wife is the eligible caregiver

18 shall be made under the rules of clause (ii)

19 (whether or not one of them has filed a

20 written declaration under clause (i)).

21 ‘‘(d) IDENTIFICATION REQUIREMENT.—No credit

22 shall be allowed under this section to a taxpayer with re23 spect to any applicable individual unless the taxpayer in24 cludes the name and taxpayer identification number of

25 such individual, and the identification number of the phy-
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1 sician or licensed independent practitioner licensed by the

2 State to render relevant diagnosis certifying such indi3 vidual, on the return of tax for the taxable year.

4 ‘‘(e) TAXABLE YEAR MUST BE FULL TAXABLE

5 YEAR.—Except in the case of a taxable year closed by rea6 son of the death of the taxpayer, no credit shall be allow7 able under this section in the case of a taxable year cov8 ering a period of less than 12 months.’’.

9 (b) CONFORMING AND CLERICAL AMENDMENTS.—

10 (1) Paragraph (2) of section 6213(g) of such

11 Code (relating to mathematical or clerical error) is

12 amended—

13 (A) by striking ‘‘and’’ at the end of sub14 paragraph (K), by striking the period at the

15 end of subparagraph (L) and inserting ‘‘, and’’,

16 and by inserting after subparagraph (L) the fol17 lowing new subparagraph:

18 ‘‘(M) an omission of a correct TIN or phy19 sician identification required under section

20 24(e) (relating to family care credit) to be in21 cluded on a return.’’, and

22 (B) in the matter preceding clause (i) of

23 subparagraph (L), by striking ‘‘or 32’’ and in24 serting ‘‘32, or 35’’.
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1 (2) The table of sections for subpart C of part

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

3 amended by striking the item relating to section 35

4 and inserting the following:

‘‘Sec. 35. Long-term care tax credit.

‘‘Sec. 36. Overpayments of tax.’’

5 (c) APPROPRIATIONS FOR REFUND.—Section

6 1324(b)(2) of title 31, United States Code, is amended

7 by inserting before the period ‘‘, or of section 35 of such

8 Code’’.

9 (d) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to taxable years beginning after

11 December 31, 2000.

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