II

106TH CONGRESS

2D SESSION S. 2096

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

FEBRUARY 24, 2000

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.—

2 ‘‘(1) IN GENERAL.—There shall be allowed as a

3 credit against the tax imposed by this chapter for

4 the taxable year an amount equal to the sum of—

5 ‘‘(A) $500 multiplied by the number of

6 qualifying children of the taxpayer, plus

7 ‘‘(B) the applicable dollar amount multi8 plied by the number of applicable individuals

9 with respect to whom the taxpayer is an eligible

10 caregiver for the taxable year.

11 ‘‘(2) APPLICABLE DOLLAR AMOUNT.—For pur12 poses of paragraph (1)(B), the applicable dollar

13 amount for taxable years beginning in any calendar

14 year shall be determined in accordance with the fol15 lowing table:

Applicable

‘‘Calendar year: dollar amount:

2001 ......................................................................................... $1,000

2002 ......................................................................................... $1,500

2003 ......................................................................................... $2,000

2004 ......................................................................................... $2,500

2005 and thereafter ................................................................. $3,000.’’

16 (2) ADDITIONAL CREDIT FOR TAXPAYER WITH

17 3 OR MORE SEPARATE CREDIT AMOUNTS.—So much

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

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

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

21 OR MORE SEPARATE CREDIT AMOUNTS.—
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1 ‘‘(1) IN GENERAL.—If the sum of the number

2 of qualifying children of the taxpayer and the num3 ber of applicable individuals with respect to which

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

5 any taxable year, the aggregate credits allowed

6 under subpart C shall be increased by the lesser

7 of—’’.

8 (3) CONFORMING AMENDMENTS.—

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

10 Code is amended by striking ‘‘CHILD’’ and in11 serting ‘‘FAMILY CARE’’.

12 (B) The heading for section 24 of such

13 Code is amended to read as follows:

14 ‘‘SEC. 24. FAMILY CARE CREDIT.’’

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

16 part IV of subchapter A of chapter 1 of such

17 Code is amended by striking the item relating

18 to section 24 and inserting the following new

19 item:

‘‘Sec. 24. Family care credit.’’

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

21 Revenue Code of 1986 (defining qualifying child) is

22 amended to read as follows:

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

24 ‘‘(1) QUALIFYING CHILD.—
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1 ‘‘(A) IN GENERAL.—The term ‘qualifying

2 child’ means any individual if—

3 ‘‘(i) the taxpayer is allowed a deduc4 tion under section 151 with respect to such

5 individual for the taxable year,

6 ‘‘(ii) such individual has not attained

7 the age of 17 as of the close of the cal8 endar year in which the taxable year of the

9 taxpayer begins, and

10 ‘‘(iii) such individual bears a relation11 ship to the taxpayer described in section

12 32(c)(3)(B).

13 ‘‘(B) EXCEPTION FOR CERTAIN NONCITI14 ZENS.—The term ‘qualifying child’ shall not in15 clude any individual who would not be a de16 pendent if the first sentence of section

17 152(b)(3) were applied without regard to all

18 that follows ‘resident of the United States’.

19 ‘‘(2) APPLICABLE INDIVIDUAL.—

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

21 individual’ means, with respect to any taxable

22 year, any individual who has been certified, be23 fore the due date for filing the return of tax for

24 the taxable year (without extensions), by a phy25 sician (as defined in section 1861(r)(1) of the
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1 Social Security Act) as being an individual with

2 long-term care needs described in subparagraph

3 (B) for a period—

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

5 days, and

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

7 the taxable year.

8 Such term shall not include any individual oth9 erwise meeting the requirements of the preceding sentence unless within the 391 10 ⁄2 month

11 period ending on such due date (or such other

12 period as the Secretary prescribes) a physician

13 (as so defined) has certified that such indi14 vidual meets such requirements.

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

16 NEEDS.—An individual is described in this sub17 paragraph if the individual meets any of the fol18 lowing requirements:

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

20 of age and—

21 ‘‘(I) is unable to perform (with22 out substantial assistance from an23 other individual) at least 3 activities

24 of daily living (as defined in section
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1 7702B(c)(2)(B)) due to a loss of

2 functional capacity, or

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

5 threats to health and safety due to se6 vere cognitive impairment and is un7 able to perform at least 1 activity of

8 daily living (as so defined) or to the

9 extent provided in regulations pre10 scribed by the Secretary (in consulta11 tion with the Secretary of Health and

12 Human Services), is unable to engage

13 in age appropriate activities.

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 ‘‘(3) ELIGIBLE CAREGIVER.—

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

5 treated as an eligible caregiver for any taxable

6 year with respect to the following individuals:

7 ‘‘(i) The taxpayer.

8 ‘‘(ii) The taxpayer’s spouse.

9 ‘‘(iii) An individual with respect to

10 whom the taxpayer is allowed a deduction

11 under section 151 for the taxable year.

12 ‘‘(iv) An individual who would be de13 scribed in clause (iii) for the taxable year

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

15 substituting for the exemption amount an

16 amount equal to the sum of the exemption

17 amount, the standard deduction under sec18 tion 63(c)(2)(C), and any additional stand19 ard deduction under section 63(c)(3) which

20 would be applicable to the individual if

21 clause (iii) applied.

22 ‘‘(v) An individual who would be de23 scribed in clause (iii) for the taxable year

24 if—
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1 ‘‘(I) the requirements of clause

2 (iv) are met with respect to the indi3 vidual, and

4 ‘‘(II) the requirements of sub5 paragraph (B) are met with respect to

6 the individual in lieu of the support

7 test of section 152(a).

8 ‘‘(B) RESIDENCY TEST.—The require9 ments of this subparagraph are met if an indi10 vidual has as his principal place of abode the

11 home of the taxpayer and—

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

13 is an ancestor or descendant of the tax14 payer or the taxpayer’s spouse, is a mem15 ber of the taxpayer’s household for over

16 half the taxable year, or

17 ‘‘(ii) in the case of any other indi18 vidual, is a member of the taxpayer’s

19 household for the entire taxable year.

20 ‘‘(C) SPECIAL RULES WHERE MORE THAN

21 1 ELIGIBLE CAREGIVER.—

22 ‘‘(i) IN GENERAL.—If more than 1 in23 dividual is an eligible caregiver with re24 spect to the same applicable individual for

25 taxable years ending with or within the
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1 same calendar year, a taxpayer shall be

2 treated as the eligible caregiver if each

3 such individual (other than the taxpayer)

4 files a written declaration (in such form

5 and manner as the Secretary may pre6 scribe) that such individual will not claim

7 such applicable individual for the credit

8 under this section.

9 ‘‘(ii) NO AGREEMENT.—If each indi10 vidual required under clause (i) to file a

11 written declaration under clause (i) does

12 not do so, the individual with the highest

13 modified adjusted gross income (as defined

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

15 eligible caregiver.

16 ‘‘(iii) MARRIED INDIVIDUALS FILING

17 SEPARATELY.—In the case of married indi18 viduals filing separately, the determination

19 under this subparagraph as to whether the

20 husband or wife is the eligible caregiver

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

22 (whether or not one of them has filed a

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

24 (c) IDENTIFICATION REQUIREMENTS.—
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1 (1) IN GENERAL.—Section 24(e) of the Internal

2 Revenue Code of 1986 is amended by adding at the

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

4 allowed under this section to a taxpayer with respect

5 to any applicable individual unless the taxpayer in6 cludes the name and taxpayer identification number

7 of such individual, and the identification number of

8 the physician certifying such individual, on the re9 turn of tax for the taxable year.’’

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

11 such Code is amended—

12 (A) by inserting ‘‘or physician identifica13 tion’’ after ‘‘correct TIN’’, and

14 (B) by striking ‘‘child’’ and inserting

15 ‘‘family care’’.

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

17 this section shall apply to taxable years beginning after

18 December 31, 2000.

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