Child CARE Act

To amend the Internal Revenue Code of 1986 to increase and improve the credit for dependent care expenses and to provide a credit for education of employees of child care centers. 1. Short title This Act may be cited as the Child Care Access and Refundability Expansion Act Child CARE Act 2. Credit for dependent care expenses (a) Credit made refundable (1) In general The Internal Revenue Code of 1986 is amended by redesignating section 21 as section 36C and by moving such section after section 36B. (2) Credit not allowed for services provided outside the United States Section 36C(b)(2)(A) of such Code, as redesignated by this section, is amended by adding at the end the following: Such term shall not include any amount paid for services provided outside the United States. (3) Conforming amendments (A) Section 23(f)(1) of such Code is amended by striking section 21(e) section 36C(e) (B) Section 35(g)(6) of such Code is amended by striking section 21(e) section 36C(e) (C) Section 36C(a)(1) of such Code, as redesignated by this section, is amended by striking this chapter this subtitle (D) Section 129(a)(2)(C) of such Code is amended by striking section 21(e) section 36C(e) (E) Section 129(b)(2) of such Code is amended by striking section 21(d)(2) section 36C(d)(2) (F) Section 129(e)(1) of such Code is amended by striking section 21(b)(2) section 36C(b)(2) (G) Section 213(e) of such Code is amended by striking section 21 section 36C (H) Section 6211(b)(4)(A) of such Code is amended by inserting 36C, 36B, (I) Section 6213(g)(2)(H) of such Code is amended by striking section 21 section 36C (J) Section 6213(g)(2)(L) of such Code is amended by striking section 21, 24, 32, or 6428 section 24, 32, 36C, or 6428 (K) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 36C, 36B, (L) The table of sections for subpart A of part IV of subchapter A of chapter 1 section 21 (M) The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 36B the following new item: Sec. 36C. Expenses for household and dependent care services necessary for gainful employment. . (b) Increase in dollar limitation Section 36C(c) of such Code, as redesignated by this section, is amended— (1) by striking $3,000 $8,000 (2) by striking $6,000 twice the dollar amount in effect under paragraph (1) (c) Credit allowed for 50 percent of qualified expenses Section 36C(a)(2) of such Code, as redesignated by this section, is amended by striking 35 percent 50 percent. (d) Income limitation Section 36C(a) of such Code, as redesignated by this section, is amended by adding at the end the following new paragraph: (3) Income limitation No credit shall be allowed under paragraph (1) with respect to any taxpayer for any taxable year if the taxpayer’s adjusted gross income for such taxable year exceeds $200,000. . (e) Inflation adjustment of dollar and income limitations Section 36C(e) of such Code, as redesignated by this section, is amended by adding at the end the following new paragraph: (11) Inflation adjustment (A) In general In the case of any taxable year beginning in a calendar year after 2015, the $8,000 amount in subsection (c)(1) and the $200,000 amount in subsection (a)(3) shall each be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) 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 2014 calendar year 1992 (B) Rounding Any increase determined under subparagraph (A) shall be rounded to the nearest multiple of $100. . (f) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 3. Credit for education of employees of child care centers (a) In general Subpart D of part IV of subchapter A of chapter 1 45S. Child care center education credit (a) In general For the purposes of section 38, the child care center education credit determined under this section for the taxable year is an amount equal to 50 percent of so much of the child care educational expenses paid or incurred by the taxpayer with respect to the operation of a qualified child care center during the taxable year. (b) Limitation The child care educational expenses taken into account under subsection (a) with respect to any eligible employee of the taxpayer for any taxable year shall not exceed $1,000. (c) Definitions For purposes of this section— (1) Child care educational expenses (A) In general The term child care educational expenses (B) Eligible employee The term eligible employee (2) Qualified child care center The term qualified child care center (d) Denial of double benefit No deduction shall be allowed under this chapter for the portion of the expenses otherwise allowable as a deduction that are taken into account in determining the credit under this section for the taxable year. . (b) Credit To be part of general business credit Subsection (b) of section 38 of such Code is amended by striking plus , plus (37) the child care center education credit determined under section 45S(a). . (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 45S. Child care center education credit. . (d) Effective date The amendments made by this section shall apply to expenses paid or incurred after the date of the enactment of this Act, in taxable years ending after such date.

Summary: Child Care Access and Refundability Expansion Act or the Child CARE Act This bill amends the Internal Revenue Code, with respect to the tax credit for employment-related expenses incurred for the care of a taxpayer's dependent, to: (1) make such credit refundable, (2) deny such credit for services provided outside the United States, (3) increase the dollar limit on the allowable amount of such credit and the percentage rate for qualified expenses, (4) deny such credit for taxpayers whose adjusted gross income exceeds $200,000 in a taxable year; and (5) allow an annual inflation adjustment to the threshold amount for reducing such credit and the maximum allowable credit amount, beginning after 2015. The bill also allows a new tax credit for 50% of the child care educational expenses, up to a maximum of $1,000 in any taxable year, paid with respect to the operation of a qualified child care center.