II 

116TH CONGRESS 

1ST SESSION S. 137 

To amend the Internal Revenue Code of 1986 to increase the credit for 

employers establishing workplace child care facilities, to increase the 

child care credit to encourage greater use of quality child care services, 

to provide incentives for students to earn child care-related degrees 

and to work in child care facilities, and to increase the exclusion for 

employer-provided dependent care assistance. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 16, 2019 

Mrs. SHAHEEN (for herself, Mrs. GILLIBRAND, Ms. KLOBUCHAR, and Mr. 

SCHATZ) 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 

the credit for employers establishing workplace child care 

facilities, to increase the child care credit to encourage 

greater use of quality child care services, to provide 

incentives for students to earn child care-related degrees 

and to work in child care facilities, and to increase 

the exclusion for employer-provided dependent care assistance. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


kjohnson on DSK79L0C42 with BILLS
2 

•S 137 IS

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Right Start Child Care 

3 and Education Act of 2019’’. 

4 SEC. 2. INCREASE IN EMPLOYER-PROVIDED CHILD CARE 

5 CREDIT. 

6 (a) INCREASE IN CREDITABLE PERCENTAGE OF

7 CHILD CARE EXPENDITURES.—Paragraph (1) of section 

8 45F(a) of the Internal Revenue Code of 1986 is amended 

9 by striking ‘‘25 percent’’ and inserting ‘‘35 percent’’. 

10 (b) INCREASE IN CREDITABLE PERCENTAGE OF RE11 SOURCE AND REFERRAL EXPENDITURES.—Paragraph (2) 

12 of section 45F(a) of the Internal Revenue Code of 1986 

13 is amended by striking ‘‘10 percent’’ and inserting ‘‘20 

14 percent’’. 

15 (c) INCREASE IN MAXIMUM CREDIT.—Subsection (b) 

16 of section 45F of the Internal Revenue Code of 1986 is 

17 amended by striking ‘‘$150,000’’ and inserting 

18 ‘‘$225,000’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2018. 

22 SEC. 3. INCREASE IN DEPENDENT CARE CREDIT. 

23 (a) INCREASE IN INCOMES ELIGIBLE FOR FULL

24 CREDIT.—Paragraph (2) of section 21(a) of the Internal 

25 Revenue Code of 1986 is amended by striking ‘‘$15,000’’ 

26 and inserting ‘‘$30,000’’. 


kjohnson on DSK79L0C42 with BILLS
3 

•S 137 IS

1 (b) INCREASE IN PERCENTAGE OF EXPENSES AL2 LOWABLE.—Paragraph (2) of section 21(a) of the Internal 

3 Revenue Code of 1986 is amended— 

4 (1) by striking ‘‘35 percent’’ and inserting ‘‘50 

5 percent’’, and 

6 (2) by striking ‘‘20 percent’’ and inserting ‘‘35 

7 percent’’. 

8 (c) INCREASE IN DOLLAR LIMIT ON AMOUNT CRED9 ITABLE.—Subsection (c) of section 21 of the Internal Rev10 enue Code of 1986 is amended— 

11 (1) by striking ‘‘$3,000’’ in paragraph (1) and 

12 inserting ‘‘$6,000’’, and 

13 (2) by striking ‘‘$6,000’’ in paragraph (2) and 

14 inserting ‘‘$12,000’’. 

15 (d) CREDIT TO BE REFUNDABLE.— 

16 (1) IN GENERAL.—The Internal Revenue Code 

17 of 1986 is amended— 

18 (A) by redesignating section 21 as section 

19 36C, and 

20 (B) by moving section 36C, as so redesig21 nated, from subpart A of part IV of subchapter 

22 A of chapter 1 to the location immediately be23 fore section 37 in subpart C of part IV of sub24 chapter A of chapter 1. 

25 (2) TECHNICAL AMENDMENTS.— 


kjohnson on DSK79L0C42 with BILLS
4 

•S 137 IS

1 (A) Paragraph (1) of section 23(f) of such 

2 Code is amended by striking ‘‘21(e)’’ and in3 serting ‘‘36C(e)’’. 

4 (B) Paragraph (6) of section 35(g) of such 

5 Code is amended by striking ‘‘21(e)’’ and in6 serting ‘‘36C(e)’’. 

7 (C) Paragraph (1) of section 36C(a) of 

8 such Code (as redesignated by paragraph (1)) 

9 is amended by striking ‘‘this chapter’’ and in10 serting ‘‘this subtitle’’. 

11 (D) Subparagraph (C) of section 129(a)(2) 

12 of such Code is amended by striking ‘‘section 

13 21(e)’’ and inserting ‘‘section 36C(e)’’. 

14 (E) Paragraph (2) of section 129(b) of 

15 such Code is amended by striking ‘‘section 

16 21(d)(2)’’ and inserting ‘‘section 36C(d)(2)’’. 

17 (F) Paragraph (1) of section 129(e) of 

18 such Code is amended by striking ‘‘section 

19 21(b)(2)’’ and inserting ‘‘section 36C(b)(2)’’. 

20 (G) Subsection (e) of section 213 of such 

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

22 inserting ‘‘section 36C’’. 

23 (H) Subparagraph (H) of section 

24 6213(g)(2) of such Code is amended by striking 

25 ‘‘section 21’’ and inserting ‘‘section 36C’’. 


kjohnson on DSK79L0C42 with BILLS
5 

•S 137 IS

1 (I) Subparagraph (L) of section 

2 6213(g)(2) of such Code is amended by striking 

3 ‘‘section 21, 24, or 32’’ and inserting ‘‘section 

4 24, 32, or 36C’’. 

5 (J) Paragraph (2) of section 1324(b) of 

6 title 31, United States Code, is amended by in7 serting ‘‘36C,’’ after ‘‘36B,’’. 

8 (K) The table of sections for subpart C of 

9 part IV of subchapter A of chapter 1 of the In10 ternal Revenue Code of 1986 is amended by in11 serting after the item relating to section 36B 

12 the following: 

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

gainful employment.’’. 

13 (L) The table of sections for subpart A of 

14 such part IV is amended by striking the item 

15 relating to section 21. 

16 (e) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years beginning after 

18 December 31, 2018. 

19 SEC. 4. 3-YEAR CREDIT FOR INDIVIDUALS HOLDING CHILD 

20 CARE-RELATED DEGREES WHO WORK IN LI21 CENSED CHILD CARE FACILITIES. 

22 (a) IN GENERAL.—Subpart A of part IV of sub23 chapter A of chapter 1 of the Internal Revenue Code of 


kjohnson on DSK79L0C42 with BILLS
6 

•S 137 IS

1 1986 is amended by inserting after section 25D the fol2 lowing new section: 

3 ‘‘SEC. 25E. RIGHT START CHILD CARE AND EDUCATION 

4 CREDIT. 

5 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in6 dividual who is an eligible child care provider for the tax7 able year, there shall be allowed as a credit against the 

8 tax imposed by this chapter for the taxable year the 

9 amount of $2,000. 

10 ‘‘(b) 3-YEAR CREDIT.— 

11 ‘‘(1) IN GENERAL.—The credit allowable by 

12 subsection (a) for any taxable year to an individual 

13 shall be allowed for such year only if the individual 

14 elects the application of this section for such year. 

15 ‘‘(2) ELECTION.—An election to have this sec16 tion apply may not be made by an individual for any 

17 taxable year if such an election by such individual is 

18 in effect for any 3 prior taxable years. 

19 ‘‘(c) ELIGIBLE CHILD CARE PROVIDER.—For pur20 poses of this section— 

21 ‘‘(1) IN GENERAL.—The term ‘eligible child 

22 care provider’ means, for any taxable year, any indi23 vidual if— 

24 ‘‘(A) as of the close of such taxable year, 

25 such individual holds a bachelor’s degree in 


kjohnson on DSK79L0C42 with BILLS
7 

•S 137 IS

1 early childhood education, child care, or a re2 lated degree and such degree was awarded by 

3 an eligible educational institution (as defined in 

4 section 25A(f)(2)), and 

5 ‘‘(B) during such taxable year, such indi6 vidual performs at least 1,200 hours of child 

7 care services at a facility if— 

8 ‘‘(i) the principal use of the facility is 

9 to provide child care services, 

10 ‘‘(ii) no more than 25 percent of the 

11 children receiving child care services at the 

12 facility are children (as defined in section 

13 152(f)) of the individual or such individ14 ual’s spouse, and 

15 ‘‘(iii) the facility meets the require16 ments of all applicable laws and regula17 tions of the State or local government in 

18 which it is located, including the licensing 

19 of the facility as a child care facility. 

20 Subparagraph (B)(i) shall not apply to a facil21 ity which is the principal residence (within the 

22 meaning of section 121) of the operator of the 

23 facility. 


kjohnson on DSK79L0C42 with BILLS
8 

•S 137 IS

1 ‘‘(2) CHILD CARE SERVICES.—The term ‘child 

2 care services’ means child care and early childhood 

3 education.’’. 

4 (b) CLERICAL AMENDMENT.—The table of sections 

5 for subpart A of part IV of subchapter A of chapter 1 

6 of the Internal Revenue Code of 1986 is amended by in7 serting after the item relating to section 25D the following 

8 new item: 

‘‘Sec. 25E. Right Start Child Care and Education Credit.’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2018. 

12 SEC. 5. INCREASE IN EXCLUSION FOR EMPLOYER-PRO13 VIDED DEPENDENT CARE ASSISTANCE. 

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

15 129(a)(2) of the Internal Revenue Code of 1986 is amend16 ed by striking ‘‘$5,000 ($2,500’’ and inserting ‘‘$7,500 

17 ($3,750’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to taxable years beginning after 

20 December 31, 2018. 

Æ 


kjohnson on DSK79L0C42 with BILLS