II 

113TH CONGRESS 

2D SESSION S. 2390 

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

foster families. 

IN THE SENATE OF THE UNITED STATES 

MAY 22, 2014 

Ms. HEITKAMP (for herself and Mr. KAINE) 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 tax credit for foster families. 

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) IN GENERAL.—Subpart A of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 is amended by inserting after section 25D the fol10 lowing new section: 


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1 ‘‘SEC. 25E. FOSTER CARE TAX CREDIT. 

2 ‘‘(a) ALLOWANCE OF CREDIT.—With respect to each 

3 qualifying foster child of an eligible taxpayer, for each cal4 endar month occurring during the taxable year that such 

5 child resides in the home of such taxpayer, there shall be 

6 allowed as a credit against the tax imposed by this chapter 

for the taxable year an amount equal to 1 7 ⁄12 of the amount 

8 determined under subsection (b). 

9 ‘‘(b) AMOUNT DETERMINED.— 

10 ‘‘(1) IN GENERAL.—The amount determined 

11 under this subsection with respect to an eligible tax12 payer and a taxable year is— 

13 ‘‘(A) $1,000, reduced by 

14 ‘‘(B) $50 for each $1,000 (or fraction 

15 thereof) by which the eligible taxpayer’s modi16 fied adjusted gross income exceeds the thresh17 old amount. 

18 For purposes of the preceding sentence, the term 

19 ‘modified adjusted gross income’ means adjusted 

20 gross income increased by any amount excluded 

21 from gross income under section 911, 931, or 933. 

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

23 paragraph (1), the term ‘threshold amount’ has the 

24 meaning given such term by section 24(b)(2). 

25 ‘‘(c) QUALIFYING FOSTER CHILD.—For purposes of 

26 this section, the term ‘qualifying foster child’ means an 


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1 eligible foster child (within the meaning of section 

2 152(f)(1)(C)) of the eligible taxpayer— 

3 ‘‘(1) who has not attained age 17, 

4 ‘‘(2) who is a citizen, national, or resident of 

5 the United States, 

6 ‘‘(3) who resides in the home of the eligible tax7 payer for not less than 1 calendar month during the 

8 taxable year, and 

9 ‘‘(4) with respect to whom the credit under sec10 tion 24 is not allowable to the eligible taxpayer or 

11 any other taxpayer who would be an eligible tax12 payer but for paragraph (3) of subsection (d). 

13 ‘‘(d) ELIGIBLE TAXPAYER.—For purposes of this 

14 section, the term ‘eligible taxpayer’ means any taxpayer, 

15 except that— 

16 ‘‘(1) no single household shall include more 

17 than 1 eligible taxpayer, 

18 ‘‘(2) married individuals filing a joint return 

19 shall be treated as 1 eligible taxpayer, and 

20 ‘‘(3) in the case of individuals not described in 

21 paragraph (2) who are members of the same house22 hold, only the taxpayer with the highest adjusted 

23 gross income for the taxable year shall be treated as 

24 an eligible taxpayer. 


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1 ‘‘(e) CALENDAR MONTH.—For purposes of this sec2 tion, if a foster child resides in the home of the taxpayer 

3 for more than 15 consecutive days of a calendar month 

4 but fewer than the total number of days in such calendar 

5 month, such foster child shall be treated as residing in 

6 the home of the taxpayer for the full calendar month. 

7 ‘‘(f) PORTION OF CREDIT REFUNDABLE.— 

8 ‘‘(1) IN GENERAL.—The aggregate credits al9 lowed to a taxpayer under subpart C shall be in10 creased by the lesser of— 

11 ‘‘(A) the credit which would be allowed 

12 under this section without regard to this sub13 section and the limitation under section 26(a) 

14 (determined after any reduction of the credit 

15 under section 24(a) by reason of section 24(d)), 

16 or 

17 ‘‘(B) the amount by which the aggregate 

18 amount of credits allowed by this subpart (de19 termined without regard to this subsection, and 

20 after any reduction of the credit under section 

21 24(a) by reason of section 24(d)) would in22 crease if the limitation imposed by section 26(a) 

23 were increased by the greater of— 

24 ‘‘(i) 15 percent of so much of the tax25 payer’s earned income (within the meaning 


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1 of section 32) which is taken into account 

2 in computing taxable income for the tax3 able year as exceeds $10,000, or 

4 ‘‘(ii) in the case of a taxpayer with 3 

5 or more qualifying foster children residing 

6 in the home of the taxpayer for all months 

7 in the taxable year (without regard to 

8 whether the same 3 children reside in the 

9 home of the taxpayer for all such months), 

10 the excess (if any) of— 

11 ‘‘(I) the taxpayer’s social security 

12 taxes for the taxable year, over 

13 ‘‘(II) the credit allowed under 

14 section 32 for the taxable year. 

15 The amount of the credit allowed under 

16 this subsection shall not be treated as a 

17 credit allowed under this subpart and shall 

18 reduce the amount of credit otherwise al19 lowable under subsection (a) without re20 gard to section 26(a). For purposes of sub21 paragraph (B), any amount excluded from 

22 gross income by reason of section 112 shall 

23 be treated as earned income which is taken 

24 into account in computing taxable income 

25 for the taxable year. 


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1 ‘‘(2) SOCIAL SECURITY TAXES.—For purposes 

2 of paragraph (1), the term ‘social security taxes’ has 

3 the same meaning as when used in section 24(d)(1). 

4 ‘‘(3) INFLATION ADJUSTMENT.—In the case of 

5 any taxable year beginning in a calendar year after 

6 2001, the $10,000 amount contained in paragraph 

7 (1)(B)(i) shall be adjusted in the same manner as 

8 the $10,000 amount under section 24(d)(1)(B) is 

9 adjusted under section 24(d)(3). 

10 ‘‘(g) IDENTIFICATION REQUIREMENT.—No credit 

11 shall be allowed under this section to an eligible taxpayer 

12 with respect to any qualifying foster child unless the tax13 payer includes the name and taxpayer identification num14 ber of such qualifying foster child on the return of tax 

15 for the taxable year.’’. 

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

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

18 of the Internal Revenue Code of 1986 is amended by in19 serting after the item relating to section 25D the following 

20 new item: 

‘‘Sec. 25E. Foster care tax credit.’’. 

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

22 this section shall apply to calendar months beginning after 

23 December 31, 2013, in taxable years beginning after such 

24 date. 


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1 (d) EDUCATION.—The Secretary of Health and 

2 Human Services (or the Secretary’s delegate), in coordina3 tion with the Secretary of the Treasury or such Sec4 retary’s delegate, shall identify provisions in the Internal 

5 Revenue Code of 1986 that can be used by or can benefit 

6 foster families, and shall increase outreach efforts to pro7 vide information and educational materials regarding such 

8 provisions to State and Indian tribal foster care agencies 

9 and to foster families. 

Æ 


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