ACE Act

To amend the Internal Revenue Code of 1986 to make the Child and Dependent Care Tax Credit fully refundable, and for other purposes. 1. Short title This Act may be cited as the Access to Childcare Expansion Act ACE Act 2. Refundability of Child and Dependent Care Tax Credit (a) In general The Internal Revenue Code of 1986 is amended— (1) by redesignating section 21 as section 36C, and (2) by moving section 36C, as so redesignated, from subpart A of part IV of subchapter A of chapter 1 to the location immediately before section 37 in subpart C of part IV of subchapter A of chapter 1. (b) Technical amendments (1) Paragraph (1) of section 23(f) 21(e) 36C(e) (2) Paragraph (6) of section 35(g) of such Code is amended by striking 21(e) 36C(e) (3) Paragraph (1) of section 36C(a) of such Code (as redesignated by subsection (a)) is amended by striking this chapter this subtitle (4) Subparagraph (C) of section 129(a)(2) of such Code is amended by striking section 21(e) section 36C(e) (5) Paragraph (2) of section 129(b) of such Code is amended by striking section 21(d)(2) section 36C(d)(2) (6) Paragraph (1) of section 129(e) of such Code is amended by striking section 21(b)(2) section 36C(b)(2) (7) Subsection (e) of section 213 of such Code is amended by striking section 21 section 36C (8) Subparagraph (H) of section 6213(g)(2) of such Code is amended by striking section 21 section 36C (9) Subparagraph (L) of section 6213(g)(2) of such Code is amended by striking section 21, 24, or 32, section 24, 32, or 36C, (10) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 36C, 36B, (11) The table of sections for subpart C of part IV of subchapter A of chapter 1 Sec. 36C. Expenses for household and dependent care services necessary for gainful employment. . (12) The table of sections for subpart A of such part IV is amended by striking the item relating to section 21. (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016. 3. Enhancement of the Child and Dependent Care Tax Credit (a) In general Section 36C (1) in paragraph (1) of subsection (a), by striking 35 percent reduced (but not below 20 percent) 50 percent reduced (but not below 35 percent) (2) by redesignating subsection (f) as subsection (g), and (3) by inserting after subsection (e) the following new subsection: (f) Inflation adjustment (1) In general In the case of any taxable year beginning after 2016, each of the dollar amounts in subsections (a)(2) and (c) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2015 calendar year 1992 (2) Rounding If any increase determined under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016.

Summary: Access to Childcare Expansion Act or the ACE Act This bill amends the Internal Revenue Code, with respect to the tax credit for expenses for household and dependent care services necessary for gainful employment (known as the Child and Dependent Care Tax Credit), to: (1) make the credit refundable, (2) increase the rate for the credit, and (3) require the dollar amounts of such credit to be adjusted for inflation after 2016.