II

106TH CONGRESS

1ST SESSION S. 1518

To amend the Internal Revenue Code of 1986 to provide an income tax

credit to long-term caregivers.

IN THE SENATE OF THE UNITED STATES

AUGUST 5, 1999

Mr. BAYH 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 provide

an income tax credit to long-term caregivers.

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 ‘‘Caregivers Assistance

5 and Resources Enhancement (CARE) Tax Credit Act’’.

6 SEC. 2. LONG-TERM CARE TAX CREDIT.

7 (a) ALLOWANCE OF CREDIT.—

8 (1) IN GENERAL.—Section 24(a) of the Internal

9 Revenue Code of 1986 (relating to allowance of child

10 tax credit) is amended to read as follows:
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1 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al2 lowed as a credit against the tax imposed by this chapter

3 for the taxable year an amount equal to the sum of—

4 ‘‘(1) $500 multiplied by the number of quali5 fying children of the taxpayer, plus

6 ‘‘(2) $1,000 multiplied by the number of appli7 cable individuals with respect to whom the taxpayer

8 is an eligible caregiver for the taxable year.’’

9 (2) ADDITIONAL CREDIT FOR TAXPAYER WITH

10 3 OR MORE SEPARATE CREDIT AMOUNTS.—So much

11 of section 24(d) of such Code as precedes paragraph

12 (1)(A) thereof is amended to read as follows:

13 ‘‘(d) ADDITIONAL CREDIT FOR TAXPAYERS WITH 3

14 OR MORE SEPARATE CREDIT AMOUNTS.—

15 ‘‘(1) IN GENERAL.—If the sum of the number

16 of qualifying children of the taxpayer and the num17 ber of applicable individuals with respect to which

18 the taxpayer is an eligible caregiver is 3 or more for

19 any taxable year, the aggregate credits allowed

20 under subpart C shall be increased by the lesser

21 of—’’.

22 (3) CONFORMING AMENDMENTS.—

23 (A) The heading for section 32(n) of such

24 Code is amended by striking ‘‘CHILD’’ and in25 serting ‘‘FAMILY CARE’’.
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1 (B) The heading for section 24 of such

2 Code is amended to read as follows:

3 ‘‘SEC. 24. FAMILY CARE CREDIT.’’

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

5 part IV of subchapter A of chapter 1 of such

6 Code is amended by striking the item relating

7 to section 24 and inserting the following new

8 item:

‘‘Sec. 24. Family care credit.’’

9 (b) DEFINITIONS.—Section 24(c) of the Internal

10 Revenue Code of 1986 (defining qualifying child) is

11 amended to read as follows:

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

13 ‘‘(1) QUALIFYING CHILD.—

14 ‘‘(A) IN GENERAL.—The term ‘qualifying

15 child’ means any individual if—

16 ‘‘(i) the taxpayer is allowed a deduc17 tion under section 151 with respect to such

18 individual for the taxable year,

19 ‘‘(ii) such individual has not attained

20 the age of 17 as of the close of the cal21 endar year in which the taxable year of the

22 taxpayer begins, and

23 ‘‘(iii) such individual bears a relation24 ship to the taxpayer described in section

25 32(c)(3)(B).
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1 ‘‘(B) EXCEPTION FOR CERTAIN NONCITI2 ZENS.—The term ‘qualifying child’ shall not in3 clude any individual who would not be a de4 pendent if the first sentence of section

5 152(b)(3) were applied without regard to all

6 that follows ‘resident of the United States’.

7 ‘‘(2) APPLICABLE INDIVIDUAL.—

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

9 individual’ means, with respect to any taxable

10 year, any individual who has been certified, be11 fore the due date for filing the return of tax for

12 the taxable year (without extensions), by a phy13 sician (as defined in section 1861(r)(1) of the

14 Social Security Act) as being an individual with

15 long-term care needs described in subparagraph

16 (B) for a period—

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

18 days, and

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

20 the taxable year.

21 Such term shall not include any individual oth22 erwise meeting the requirements of the preceding sentence unless within the 391 23 ⁄2 month

24 period ending on such due date (or such other

25 period as the Secretary prescribes) a physician
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1 (as so defined) has certified that such indi2 vidual meets such requirements.

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

4 NEEDS.—An individual is described in this sub5 paragraph if the individual meets any of the fol6 lowing requirements:

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

8 of age and—

9 ‘‘(I) is unable to perform (with10 out substantial assistance from an11 other individual) at least 3 activities

12 of daily living (as defined in section

13 7702B(c)(2)(B)) due to a loss of

14 functional capacity, or

15 ‘‘(II) requires substantial super16 vision to protect such individual from

17 threats to health and safety due to se18 vere cognitive impairment and is un19 able to perform at least 1 activity of

20 daily living (as so defined) or to the

21 extent provided in regulations pre22 scribed by the Secretary (in consulta23 tion with the Secretary of Health and

24 Human Services), is unable to engage

25 in age appropriate activities.
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1 ‘‘(ii) The individual is at least 2 but

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

3 loss of functional capacity to perform

4 (without substantial assistance from an5 other individual) at least 2 of the following

6 activities: eating, transferring, or mobility.

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

8 of age and requires specific durable med9 ical equipment by reason of a severe health

10 condition or requires a skilled practitioner

11 trained to address the individual’s condi12 tion to be available if the individual’s par13 ents or guardians are absent.

14 ‘‘(3) ELIGIBLE CAREGIVER.—

15 ‘‘(A) IN GENERAL.—A taxpayer shall be

16 treated as an eligible caregiver for any taxable

17 year with respect to the following individuals:

18 ‘‘(i) The taxpayer.

19 ‘‘(ii) The taxpayer’s spouse.

20 ‘‘(iii) An individual with respect to

21 whom the taxpayer is allowed a deduction

22 under section 151 for the taxable year.

23 ‘‘(iv) An individual who would be de24 scribed in clause (iii) for the taxable year

25 if section 151(c)(1)(A) were applied by
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1 substituting for the exemption amount an

2 amount equal to the sum of the exemption

3 amount, the standard deduction under sec4 tion 63(c)(2)(C), and any additional stand5 ard deduction under section 63(c)(3) which

6 would be applicable to the individual if

7 clause (iii) applied.

8 ‘‘(v) An individual who would be de9 scribed in clause (iii) for the taxable year

10 if—

11 ‘‘(I) the requirements of clause

12 (iv) are met with respect to the indi13 vidual, and

14 ‘‘(II) the requirements of sub15 paragraph (B) are met with respect to

16 the individual in lieu of the support

17 test of section 152(a).

18 ‘‘(B) RESIDENCY TEST.—The require19 ments of this subparagraph are met if an indi20 vidual has as his principal place of abode the

21 home of the taxpayer and—

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

23 is an ancestor or descendant of the tax24 payer or the taxpayer’s spouse, is a mem-
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1 ber of the taxpayer’s household for over

2 half the taxable year, or

3 ‘‘(ii) in the case of any other indi4 vidual, is a member of the taxpayer’s

5 household for the entire taxable year.

6 ‘‘(C) SPECIAL RULES WHERE MORE THAN

7 1 ELIGIBLE CAREGIVER.—

8 ‘‘(i) IN GENERAL.—If more than 1 in9 dividual is an eligible caregiver with re10 spect to the same applicable individual for

11 taxable years ending with or within the

12 same calendar year, a taxpayer shall be

13 treated as the eligible caregiver if each

14 such individual (other than the taxpayer)

15 files a written declaration (in such form

16 and manner as the Secretary may pre17 scribe) that such individual will not claim

18 such applicable individual for the credit

19 under this section.

20 ‘‘(ii) NO AGREEMENT.—If each indi21 vidual required under clause (i) to file a

22 written declaration under clause (i) does

23 not do so, the individual with the highest

24 modified adjusted gross income (as defined
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1 in section 32(c)(5)) shall be treated as the

2 eligible caregiver.

3 ‘‘(iii) MARRIED INDIVIDUALS FILING

4 SEPARATELY.—In the case of married indi5 viduals filing separately, the determination

6 under this subparagraph as to whether the

7 husband or wife is the eligible caregiver

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

9 (whether or not one of them has filed a

10 written declaration under clause (i)).’’

11 (c) IDENTIFICATION REQUIREMENTS.—

12 (1) IN GENERAL.—Section 24(e) of the Internal

13 Revenue Code of 1986 is amended by adding at the

14 end the following new sentence: ‘‘No credit shall be

15 allowed under this section to a taxpayer with respect

16 to any applicable individual unless the taxpayer in17 cludes the name and taxpayer identification number

18 of such individual, and the identification number of

19 the physician certifying such individual, on the re20 turn of tax for the taxable year.’’

21 (2) ASSESSMENT.—Section 6213(g)(2)(I) of

22 such Code is amended—

23 (A) by inserting ‘‘or physician identifica24 tion’’ after ‘‘correct TIN’’, and
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1 (B) by striking ‘‘child’’ and inserting

2 ‘‘family care’’.

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

4 this section shall apply to taxable years beginning after

5 December 31, 1999.

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