II 

116TH CONGRESS 

1ST SESSION S. 1599 

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

credit for foster families, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 22, 2019 

Mr. KAINE (for himself and Mr. JONES) 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 refundable tax credit for foster families, 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 ‘‘Foster Care Tax Cred5 it Act’’. 

6 SEC. 2. FOSTER CARE TAX CREDIT. 

7 (a) ALLOWANCE OF CREDIT.— 

8 (1) IN GENERAL.—Subpart C 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 36B 

2 the following new section: 

3 ‘‘SEC. 36C. FOSTER CARE TAX CREDIT. 

4 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli5 gible taxpayer, there shall be allowed as a credit against 

6 the tax imposed by this chapter for the taxable year an 

7 amount equal to $850. 

8 ‘‘(b) LIMITATION.— 

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

10 allowable under subsection (a) (determined without 

11 regard to this subsection) shall be reduced (but not 

12 below zero) by the amount which bears the same 

13 ratio to such credit (as so determined) as— 

14 ‘‘(A) the excess of— 

15 ‘‘(i) the taxpayer’s modified adjusted 

16 gross income for such taxable year, over 

17 ‘‘(ii) the threshold amount, bears to 

18 ‘‘(B) $17,000. 

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

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

21 ‘‘(A) $250,000, in the case of a joint re22 turn, 

23 ‘‘(B) $150,000, in the case of an individual 

24 who is not married, and 


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1 ‘‘(C) $125,000, in the case of a married 

2 individual filing a separate return. 

3 For purposes of this paragraph, marital status shall 

4 be determined under section 7703. 

5 ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.— 

6 For purposes of this subsection, the term ‘modified 

7 adjusted gross income’ means the adjusted gross in8 come of the taxpayer for the taxable year increased 

9 by any amount excluded from gross income under 

10 section 911, 931, or 933. 

11 ‘‘(c) ELIGIBLE TAXPAYER.—For purposes of this sec12 tion— 

13 ‘‘(1) IN GENERAL.—The term ‘eligible taxpayer’ 

14 means, with respect to any taxable year, any tax15 payer— 

16 ‘‘(A) with whom a qualifying foster child 

17 was placed for a period of not less than 1 

18 month during such taxable year, and 

19 ‘‘(B) for whom a credit under section 24 

20 with respect to such eligible foster child is not 

21 allowed for such taxable year. 

22 ‘‘(2) QUALIFYING FOSTER CHILD.—The term 

23 ‘qualifying foster child’ means an eligible foster child 

24 (within the meaning of section 152(f)(1)(C))— 

25 ‘‘(A) who has not attained age 17, and 


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1 ‘‘(B) who is a citizen, national, or resident 

2 of the United States. 

3 ‘‘(3) CALENDAR MONTH.—For purposes of this 

4 paragraph (1)(A), if a foster child resides in the 

5 home of the taxpayer for more than 15 consecutive 

6 days of a calendar month but fewer than the total 

7 number of days in such calendar month, such foster 

8 child shall be treated as residing in the home of the 

9 taxpayer for the full calendar month. 

10 ‘‘(d) RESTRICTIONS ON TAXPAYERS WHO IMPROP11 ERLY CLAIMED CREDIT IN PRIOR YEAR.— 

12 ‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT

13 OR RECKLESS CLAIMS.— 

14 ‘‘(A) IN GENERAL.—No credit shall be al15 lowed under this section for any taxable year in 

16 the disallowance period. 

17 ‘‘(B) DISALLOWANCE PERIOD.—For pur18 poses of subparagraph (A), the disallowance pe19 riod is— 

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

21 after the most recent taxable year for 

22 which there was a final determination that 

23 the taxpayer’s claim of credit under this 

24 section was due to fraud, and 


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

2 after the most recent taxable year for 

3 which there was a final determination that 

4 the taxpayer’s claim of credit under this 

5 section was due to reckless or intentional 

6 disregard of rules and regulations (but not 

7 due to fraud). 

8 ‘‘(2) TAXPAYERS MAKING IMPROPER PRIOR

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

10 credit under this section for any taxable year as a 

11 result of the deficiency procedures under subchapter 

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

13 this section for any subsequent taxable year unless 

14 the taxpayer provides such information as the Sec15 retary may require to demonstrate eligibility for 

16 such credit.’’. 

17 (2) CONFORMING AMENDMENTS.— 

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

19 Revenue Code of 1986 is amended by inserting 

20 ‘‘36C,’’ after ‘‘36B,’’. 

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

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

23 after ‘‘25A,’’. 

24 (C) The table of sections for subpart C of 

25 part IV of subchapter A of chapter 1 of the InVerDate Sep 11 2014 17:47 Jun 04, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1599.IS S1599

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1 ternal Revenue Code of 1986 is amended by in2 serting after the item relating to section 36B 

3 the following new item: 

‘‘Sec. 36C. Foster care tax credit.’’. 

4 (b) INFORMATION RETURNS RELATING TO FOSTER

5 CHILD PLACEMENT.— 

6 (1) IN GENERAL.—Subpart A of part III of 

7 subchapter A of chapter 61 of the Internal Revenue 

8 Code of 1986 is amended by inserting after section 

9 6039J the following new section: 

10 ‘‘SEC. 6039K. INFORMATION REPORTING WITH RESPECT TO 

11 FOSTER CHILD PLACEMENT. 

12 ‘‘(a) IN GENERAL.—Every authorized placement 

13 agency and court which places a qualifying foster child 

14 with a person during a calendar year shall, at such time 

15 as the Secretary shall prescribe, make a return described 

16 in subsection (b). 

17 ‘‘(b) FORM AND MANNER OF RETURN.—A return is 

18 described in this subsection if such return— 

19 ‘‘(1) is in such form as the Secretary may pre20 scribe, and 

21 ‘‘(2) contains, with respect to each qualifying 

22 foster child placed during the calendar year— 

23 ‘‘(A) the name, address, and TIN of each 

24 individual with whom such qualifying foster 

25 child was placed, 


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1 ‘‘(B) the name of the qualifying foster 

2 child, and 

3 ‘‘(C) the dates during which such place4 ment occurred. 

5 ‘‘(c) STATEMENTS TO BE FURNISHED TO FOSTER

6 PARENTS.— 

7 ‘‘(1) IN GENERAL.—Every person required to 

8 make a return under subsection (a) shall furnish to 

9 each individual whose name is required to be set 

10 forth under subsection (b)(2)(A) a written statement 

11 showing— 

12 ‘‘(A) the name and address of the person 

13 required to make such return and the phone 

14 number of the information contact for such per15 son, and 

16 ‘‘(B) the information required to be shown 

17 on the return with respect to such individual. 

18 ‘‘(2) TIME FOR FURNISHING STATEMENTS.— 

19 The written statement required under paragraph (1) 

20 shall be furnished on or before January 31 of the 

21 year following the calendar year for which the return 

22 under subsection (a) was required to be made. 

23 ‘‘(d) QUALIFYING FOSTER CHILD.—For purposes of 

24 this section, the term ‘qualifying foster child’ has the 

25 meaning given such term under section 36C(c)(2).’’. 


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1 (2) ASSESSABLE PENALTIES.— 

2 (A) Section 6724(d)(1)(B) of such Code is 

3 amended by striking ‘‘or’’ at the end of clause 

4 (xxv), by striking ‘‘and’’ at the end of clause 

5 (xxvi) and inserting ‘‘or’’, and by inserting after 

6 clause (xxvi) the following new clause: 

7 ‘‘(xxvii) section 6039K (relating to in8 formation returns with respect to foster 

9 child placement),’’. 

10 (B) Section 6724(d)(2) of such Code is 

11 amended by redesignating the second subpara12 graph (JJ) as subparagraph (KK), by striking 

13 ‘‘or’’ at the end of subparagraph (II), by strik14 ing the period at the end of the first subpara15 graph (JJ), by striking the period at the end of 

16 subparagraph (KK) (as so redesignated) and 

17 inserting a comma, and by inserting after such 

18 subparagraph (KK) the following new subpara19 graph: 

20 ‘‘(LL) section 6039K(c) (relating to state21 ments with respect to foster child placement).’’. 

22 (3) CLERICAL AMENDMENT.—The table of sec23 tions of subpart A of part III of subchapter A of 

24 chapter 61 of such Code is amended by inserting 


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1 after the item relating to section 6039J the fol2 lowing new item: 

‘‘Sec. 6039K. Information reporting with respect to foster child placement.’’. 

3 (c) ELECTION NOT TO TAKE CHILD TAX CREDIT.— 

4 Section 24(h)(4) of the Internal Revenue Code of 1986 

5 is amended by adding at the end the following new sub6 paragraph: 

7 ‘‘(D) ELECTION NOT TO TAKE CREDIT.— 

8 A taxpayer may elect not to have this para9 graph apply with respect to any dependent of 

10 the taxpayer to whom a credit would otherwise 

11 be allowed by reason of subparagraph (A). In 

12 any case in which a taxpayer makes an election 

13 under this subparagraph, the credit allowed 

14 under this section shall be treated as not al15 lowed with respect to such dependent.’’. 

16 (d) APPLICATION OF TAX RETURN PREPARER DUE

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

18 Revenue Code of 1986 is amended by striking ‘‘or 32’’ 

19 and inserting ‘‘32, or 36C’’. 

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

21 this section shall apply to calendar months beginning after 

22 December 31, 2019, in taxable years beginning after such 

23 date. 

24 (f) EDUCATION.— 


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1 (1) IN GENERAL.—The Secretary of Health and 

2 Human Services (or the Secretary’s delegate), in co3 ordination with the Secretary of the Treasury or 

4 such Secretary’s delegate, shall identify provisions in 

5 the Internal Revenue Code of 1986 that can be used 

6 by or can benefit foster families, and shall increase 

7 outreach efforts to provide information and edu8 cational materials regarding such provisions to State 

9 and Indian tribal foster care agencies and to foster 

10 families. 

11 (2) AUTHORIZATION OF APPROPRIATIONS.— 

12 There are authorized to be appropriated such sums 

13 as necessary for the purposes of carrying out para14 graph (1). 

15 SEC. 3. STUDY AND REPORT ON EMERGENCY AND SHORT16 TERM FOSTER PLACEMENTS. 

17 (a) STUDY.—The Secretary of Health and Human 

18 services, in coordination with the Secretary of the Treas19 ury (or the Secretary’s delegate), shall conduct a study 

20 on— 

21 (1) the costs and financial burdens on foster 

22 families who experience multiple emergency and 

23 short-term foster placements annually; and 


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1 (2) challenges to verifying and documenting the 

2 placement of children in emergency and short-term 

3 placement. 

4 For purposes of this subsection, a short-term placement 

5 is a placement that lasts less than 1 week. 

6 (b) REPORT.—Not later than 1 year after the date 

7 of the enactment of this Act, the Secretary of Health and 

8 Human Services shall submit to Congress a report on the 

9 study conducted under subsection (a). 

Æ 


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