I

106TH CONGRESS

1ST SESSION H. R. 2164

To amend the Internal Revenue Code of 1986 to made the dependent care

credit refundable and to provide for advance payments of such credit.

IN THE HOUSE OF REPRESENTATIVES

JUNE 10, 1999

Mr. PETERSON of Minnesota 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 made

the dependent care credit refundable and to provide for

advance payments of such 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. DEPENDENT CARE CREDIT MADE REFUND4 ABLE; ADVANCE PAYMENT OF SUCH CREDIT.

5 (a) CREDIT TO BE REFUNDABLE.—

6 (1) IN GENERAL.—Section 21 of the Internal

7 Revenue Code of 1986 (relating to expenses for

8 household and dependent care services necessary for

9 gainful employment) is hereby moved to subpart C

10 of part IV of subchapter A of chapter 1 of such
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1 Code (relating to refundable credits) and inserted

2 after section 34.

3 (2) REDESIGNATIONS.—

4 (A) Section 35 of such Code is redesig5 nated as section 36.

6 (B) Section 21 of such Code is redesig7 nated as section 35.

8 (b) ADVANCE PAYMENT OF CREDIT.—Chapter 25 of

9 such Code (relating to general provisions relating to em10 ployment taxes) is amended by inserting after section

11 3507 the following:

12 ‘‘SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE

13 CREDIT.

14 ‘‘(a) GENERAL RULE.—Except as otherwise provided

15 in this section, every employer making payment of wages

16 with respect to whom a dependent care eligibility certifi17 cate is in effect shall, at the time of paying such wages,

18 make an additional payment equal to such employee’s de19 pendent care advance amount.

20 ‘‘(b) DEPENDENT CARE ELIGIBILITY CERTIFI21 CATE.—For purposes of this title, a dependent care eligi22 bility certificate is a statement furnished by an employee

23 to the employer which—
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1 ‘‘(1) certifies that the employee will be eligible

2 to receive the credit provided by section 35 for the

3 taxable year,

4 ‘‘(2) certifies that the employee reasonably ex5 pects to be an applicable taxpayer for the taxable

6 year,

7 ‘‘(3) certifies that the employee does not have

8 a dependent care eligibility certificate in effect for

9 the calendar year with respect to the payment of

10 wages by another employer,

11 ‘‘(4) states whether or not the employee’s

12 spouse has a dependent care eligibility certificate in

13 effect,

14 ‘‘(5) states the number of qualifying individuals

15 in the household maintained by the employee, and

16 ‘‘(6) estimates the amount of employment-re17 lated expenses for the calendar year.

18 ‘‘(c) DEPENDENT CARE ADVANCE AMOUNT.—

19 ‘‘(1) IN GENERAL.—For purposes of this title,

20 the term ‘dependent care advance amount’ means,

21 with respect to any payroll period, the amount

22 determined—

23 ‘‘(A) on the basis of the employee’s wages

24 from the employer for such period,
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1 ‘‘(B) on the basis of the employee’s esti2 mated employment-related expenses included in

3 the dependent care eligibility certificate, and

4 ‘‘(C) in accordance with tables provided by

5 the Secretary.

6 ‘‘(2) ADVANCE AMOUNT TABLES.—The tables

7 referred to in paragraph (1)(C) shall be similar in

8 form to the tables prescribed under section 3402

9 and, to the maximum extent feasible, shall be coordi10 nated with such tables and the tables prescribed

11 under section 3507(c).

12 ‘‘(d) OTHER RULES.—For purposes of this section,

13 rules similar to the rules of subsections (d) and (e) of sec14 tion 3507 shall apply.

15 ‘‘(e) DEFINITIONS.—For purposes of this section,

16 terms used in this section which are defined in section 35

17 shall have the respective meanings given such terms by

18 section 35.’’.

19 (c) CONFORMING AMENDMENTS.—

20 (1) Section 35(a)(1) of such Code, as redesig21 nated by subsection (a), is amended by striking

22 ‘‘chapter’’ and inserting ‘‘subtitle’’.

23 (2) Section 35(e) of such Code, as so redesig24 nated, is amended by adding at the end the fol25 lowing:
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1 ‘‘(12) COORDINATION WITH ADVANCE PAY2 MENTS AND MINIMUM TAX.—Rules similar to the

3 rules of subsections (g) and (h) of section 32 shall

4 apply for purposes of this section.’’.

5 (3) Sections 23(f)(1) and 129(a)(2)(C) of such

6 Code are each amended by striking ‘‘section 21(e)’’

7 and inserting ‘‘section 35(e)’’.

8 (4) Section 129(b)(2) of such Code is amended

9 by striking ‘‘section 21(d)(2)’’ and inserting ‘‘section

10 35(d)(2)’’.

11 (5) Section 129(e)(1) of such Code is amended

12 by striking ‘‘section 21(b)(2)’’ and inserting ‘‘section

13 35(b)(2)’’.

14 (6) Section 213(e) of such Code is amended by

15 striking ‘‘section 21’’ and inserting ‘‘section 35’’.

16 (7) Section 995(f)(2)(C) of such Code is

17 amended by striking ‘‘and 34’’ and inserting ‘‘34,

18 and 35’’.

19 (8) Section 6211(b)(4)(A) of such Code is

20 amended by striking ‘‘and 34’’ and inserting ‘‘, 34,

21 and 35’’.

22 (9) Section 6213(g)(2)(H) of such Code is

23 amended by striking ‘‘section 21’’ and inserting

24 ‘‘section 35’’.
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1 (10) Section 6213(g)(2)(L) of such Code is

2 amended by striking ‘‘section 21, 24, or 32’’ and in3 serting ‘‘section 24, 32, or 35’’.

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

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

6 amended by striking the item relating to section 35

7 and inserting the following:

‘‘Sec. 35. Dependent care services.

‘‘Sec. 36. Overpayments of tax.’’.

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

9 part IV is amended by striking the item relating to

10 section 21.

11 (13) The table of sections for chapter 25 of

12 such Code is amended by adding after the item re13 lating to section 3507 the following:

‘‘Sec. 3507A. Advance payment of dependent care credit.’’.

14 (14) Section 1324(b)(2) of title 31, United

15 States Code, is amended by inserting before the pe16 riod ‘‘, or from section 35 of the Internal Revenue

17 Code of 1986’’.

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

19 this section apply to taxable years beginning after Decem20 ber 31, 1999.

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