I 

108TH CONGRESS 

2D SESSION H. R. 4025

To amend the Internal Revenue Code of 1986 to allow individuals a credit 

against income tax for medical expenses for dependents. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 24, 2004

Mr. PAUL introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to allow individuals a credit against income tax for medical expenses 

for dependents.

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 ‘‘Child Health Care Af5 fordability Act’’. 

6 SEC. 2. CREDIT FOR MEDICAL EXPENSES FOR DEPEND7 ENTS. 

8 (a) IN GENERAL.—Subpart A of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 (relating to nonrefundable personal credits) is 
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1 amended by inserting after section 25B the following new 

2 section: 

3 ‘‘SEC. 25C. MEDICAL EXPENSES FOR DEPENDENTS. 

4 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in5 dividual, there shall be allowed as a credit against the tax 

6 imposed by this chapter for the taxable year an amount 

7 equal to the expenses paid during the taxable year, not 

8 compensated for by insurance or otherwise, for medical 

9 care for any dependent of the taxpayer. 

10 ‘‘(b) LIMITATIONS.—

11 ‘‘(1) IN GENERAL.—Except as provided in para12 graph (2), the credit allowed by this section shall not 

13 exceed $500 per dependent for any taxable year. 

14 ‘‘(2) INCREASED CREDIT FOR TERMINAL DIS15 EASES, ETC.—In the case of expenses for medical 

16 care of a dependent who has a terminal disease, can17 cer (whether or not in remission), a disability, or 

18 any other health condition requiring hospitalization 

19 or other forms of specialized care, the credit allowed 

20 by this section shall not exceed $3,000 for each such 

21 dependent for any taxable year. 

22 ‘‘(c) PORTION OF CREDIT REFUNDABLE.—

23 ‘‘(1) IN GENERAL.—The aggregate credits al24 lowed to a taxpayer under subpart C shall be in25 creased by the lesser of—
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1 ‘‘(A) the credit which would be allowed 

2 under this section without regard to this sub3 section and the limitation under section 26(a), 

4 or 

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

6 amount of credits allowed by this subpart (de7 termined without regard to this subsection) 

8 would increase if the limitation imposed by sec9 tion 26(a) were increased by the the taxpayer’s 

10 social security taxes for the taxable year. 

11 ‘‘(2) COORDINATION WITH NONREFUNDABLE

12 CREDIT.—The amount of the credit allowed under 

13 this subsection shall not be treated as a credit al14 lowed under this subpart and shall reduce the 

15 amount of credit otherwise allowable under sub16 section (a) without regard to section 26(a). 

17 ‘‘(d) DEFINITIONS.—For purposes of this section—

18 ‘‘(1) MEDICAL CARE.—The term ‘medical care’ 

19 has the meaning given such term by section 213. 

20 ‘‘(2) DEPENDENT.—The term ‘dependent’ has 

21 the meaning given such term by section 152. 

22 ‘‘(3) DISABILITY.—The term ‘disability’ means 

23 a condition that requires qualified long-term care 

24 services (as defined in section 7702B(c)). 
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1 ‘‘(4) SOCIAL SECURITY TAXES.—The term ‘so2 cial security taxes’ has the meaning given such term 

3 by section 24(d)(2). 

4 ‘‘(e) EXCLUSION OF AMOUNTS ALLOWED FOR CARE

5 OF CERTAIN DEPENDENTS.—Any expense allowed as a 

6 credit under section 21 shall not be treated as an expense 

7 paid for medical care under this section. 

8 ‘‘(f) ADJUSTMENTS FOR INFLATION.—

9 ‘‘(1) IN GENERAL.—In the case of any taxable 

10 year beginning in a calendar year after 2003, the 

11 $500 amount contained in subsection (b)(1), and the 

12 $3,000 amount contained in subsection (b)(2), shall 

13 each be increased by an amount equal to—

14 ‘‘(A) such dollar amount, multiplied by 

15 ‘‘(B) the cost-of-living adjustment deter16 mined under section 1(f)(3) for the calendar 

17 year in which the taxable year begins by sub18 stituting ‘calendar year 2002’ for ‘calendar year 

19 1992’ in subparagraph (B) thereof. 

20 ‘‘(2) ROUNDING.—If any increase determined 

21 under paragraph (1) is not a multiple of $10, such 

22 increase shall be rounded to the next highest mul23 tiple of $10. 

24 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

25 regulations to carry out this section, including regulations 
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1 providing for claiming the credit under this section on 

2 Form 1040EZ.’’. 

3 (b) DENIAL OF DOUBLE BENEFIT FOR MEDICAL EX4 PENSES DEDUCTION.—Subsection (e) of section 213 of 

5 such Code is amended by inserting ‘‘or 25C’’ after ‘‘sec6 tion 21’’. 

7 (c) CONFORMING AMENDMENTS.—

8 (1) The table of sections for such subpart A is 

9 amended by inserting after the item relating to sec10 tion 25B the following new item:

‘‘Sec. 25C. Medical expenses for dependents.’’.

11 (2) Paragraph (2) of section 1324(b) of title 

12 31, United States Code, is amended by striking 

13 ‘‘section 35’’ and inserting ‘‘section 25C or 35’’. 

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

15 this section shall apply to amounts paid after the date of 

16 the enactment of this Act in taxable years ending after 

17 such date.

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