I 
119TH CONGRESS 
1ST SESSION H. R. 2763 
To amend the Internal Revenue Code of 1986 to establish a refundable 
child tax credit with monthly advance payment. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 9, 2025 
Ms. DELAURO (for herself, Ms. DELBENE, Mr. TORRES of New York, Mr. 
MCGOVERN, Ms. NORTON, Ms. CHU, Ms. SCHAKOWSKY, Mr. MRVAN, 
Mrs. RAMIREZ, Ms. ADAMS, Mr. HORSFORD, Mr. FOSTER, Mr. THOMP-
SON of Mississippi, Mr. FIELDS, Ms. LEE of Pennsylvania, Mr. AMO, Mr. 
DAVIS of Illinois, Mr. CASTEN, Mr. MCGARVEY, Ms. SCANLON, Ms. 
MOORE of Wisconsin, Mrs. FOUSHEE, Ms. TLAIB, Mr. EVANS of Pennsyl-
vania, Ms. WILLIAMS of Georgia, Ms. BALINT, Mr. JOHNSON of Georgia, 
Mrs. MCBATH, Ms. GARCIA of Texas, Mr. RASKIN, Ms. OMAR, Mr. SOTO, 
Mr. LARSON of Connecticut, Mr. HIMES, Mr. BEYER, Ms. SEWELL, Ms. 
ROSS, Ms. JACOBS, Mr. DOGGETT, Ms. WASSERMAN SCHULTZ, Ms. 
BROWN, Mr. MOULTON, Ms. MCCLELLAN, Ms. BUDZINSKI, Mr. 
SWALWELL, Ms. PINGREE, Mrs. DINGELL, Ms. DEXTER, Mr. BOYLE of 
Pennsylvania, Mr. CARSON, Ms. ESCOBAR, Mr. MORELLE, Ms. SA´NCHEZ, 
Mr. CONNOLLY, Mr. QUIGLEY, Mr. COURTNEY, Mr. ESPAILLAT, Ms. 
STANSBURY, Mr. DELUZIO, Mr. LARSEN of Washington, Mr. CASAR, Mr. 
PALLONE, Ms. KELLY of Illinois, Mr. BISHOP, Mr. POCAN, Mr. VEASEY, 
Ms. SALINAS, Mr. SCOTT of Virginia, Ms. TITUS, Mr. SUBRAMANYAM, 
Mrs. HAYES, Ms. MCBRIDE, Ms. BROWNLEY, Mr. STANTON, Ms. 
MCCOLLUM, Mr. CASE, Mrs. TORRES of California, Ms. LOFGREN, Mr. 
TONKO, Ms. OCASIO-CORTEZ, Ms. DEAN
of Pennsylvania, Mr. 
LANDSMAN, Mr. LEVIN, Mr. SHERMAN, Ms. HOULAHAN, Mr. COSTA, Mr. 
IVEY, Ms. MATSUI, Mr. FROST, Ms. TOKUDA, Mr. KENNEDY of New 
York, Ms. CASTOR of Florida, Ms. PETTERSEN, Mr. GARAMENDI, Mr. 
GOTTHEIMER, Mr. JACKSON of Illinois, Ms. RANDALL, Ms. LEE of Ne-
vada, Ms. HOYLE of Oregon, Mr. NEGUSE, Ms. WILSON of Florida, Mr. 
THANEDAR, Mrs. TRAHAN, Mr. SCHNEIDER, Mrs. BEATTY, Mr. CARTER 
of Louisiana, Mr. OLSZEWSKI, Mr. GOLDMAN of New York, Mr. 
CARBAJAL, Mr. PETERS, Mr. VARGAS, Mrs. MCCLAIN DELANEY, Ms. 
LOIS FRANKEL of Florida, Mrs. WATSON COLEMAN, Mr. MULLIN, Ms. 
CLARK of Massachusetts, Mrs. CHERFILUS-MCCORMICK, Ms. BARRAGA´N, 
Ms. VELA´ZQUEZ, Mrs. MCIVER, Ms. STRICKLAND, Ms. PRESSLEY, Ms. 
MENG, Ms. CLARKE of New York, Mr. AUCHINCLOSS, Mr. KHANNA, Mr. 
GARCIA of California, Mr. AGUILAR, Ms. LEGER FERNANDEZ, Mr. 
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VINDMAN, Ms. WATERS, Mr. TAKANO, Mr. LATIMER, Ms. BONAMICI, Ms. 
JAYAPAL, Ms. MCDONALD RIVET, Mr. DAVID SCOTT of Georgia, Ms. 
STEVENS, Mr. SMITH of Washington, Mr. KEATING, Mr. LIEU, Ms. MOR-
RISON, Mr. PANETTA, Mr. LYNCH, Mr. DESAULNIER, Mr. SORENSEN, 
Ms. BYNUM, Ms. SIMON, Ms. UNDERWOOD, Mr. TRAN, Ms. DEGETTE, 
Ms. SHERRILL, Mr. SUOZZI, Mr. CLEAVER, Mr. MENENDEZ, Mr. MIN, 
Ms. ANSARI, Ms. POU, Mr. GOMEZ, Ms. FRIEDMAN, Mr. BERA, Mr. 
GARCI´A of Illinois, Mr. NADLER, Mr. RUIZ, Mr. HUFFMAN, Mr. CASTRO 
of Texas, Mr. FIGURES, Ms. ELFRETH, Mr. MFUME, Mr. CISNEROS, Mr. 
RYAN, Mr. VASQUEZ, Ms. SCHRIER, Mr. COHEN, Ms. SCHOLTEN, Mr. 
RILEY
of New York, Ms. CRAIG, Ms. JOHNSON
of Texas, Mr. 
WHITESIDES, Mr. MOSKOWITZ, Mr. HOYER, Mr. CUELLAR, Mr. 
LICCARDO, Mr. GRAY, Ms. GOODLANDER, Mr. CONAWAY, Mr. CORREA, 
Mr. MAGAZINER, Mrs. FLETCHER, Ms. PELOSI, Mr. BELL, Ms. CROCK-
ETT, Mrs. SYKES, Ms. KAPTUR, Mr. GREEN of Texas, Ms. PLASKETT, 
Mr. MANNION, Mr. JEFFRIES, Mr. CROW, Ms. KAMLAGER-DOVE, Mr. 
CLYBURN, Mr. KRISHNAMOORTHI, Mr. NORCROSS, Mr. DAVIS of North 
Carolina, Mr. VICENTE GONZALEZ of Texas, Ms. DAVIDS of Kansas, Ms. 
RIVAS, Mr. MEEKS, Mr. PAPPAS, Mr. HARDER of California, and Mr. 
HERNA´NDEZ) 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 establish 
a refundable child tax credit with monthly advance payment. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘American Family Act’’. 
SEC. 2. ESTABLISHMENT OF REFUNDABLE CHILD TAX 
CREDIT WITH MONTHLY ADVANCE PAYMENT. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 24 the fol-
lowing new sections: 
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‘‘SEC. 24A. MONTHLY CHILD TAX CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year the sum of the monthly specified child 
allowances determined with respect to the taxpayer under 
subsection (b) for each calendar month during such tax-
able year. 
‘‘(b) MONTHLY SPECIFIED CHILD ALLOWANCE.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘monthly specified child allowance’ 
means, with respect to any taxpayer for any cal-
endar month, the sum of— 
‘‘(A) $300, with respect to each specified 
child of such taxpayer who will (as of the close 
of such month) have attained age 6, plus 
‘‘(B) 120 percent of the dollar amount in 
effect for such month under subparagraph (A), 
with respect to each specified child of such tax-
payer who will not (as of the close of such 
month) have attained age 6. 
In the case of any specified child of such taxpayer 
who will not (as of the close of such month) have at-
tained the age of 1 month, subparagraph (B) shall 
be applied by substituting ‘800 percent’ for ‘120 
percent’. 
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‘‘(2) LIMITATIONS
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.— 
‘‘(A) INITIAL
REDUCTION.—The monthly 
specified child allowance otherwise determined 
under paragraph (1) with respect to any tax-
payer for any calendar month shall be reduced 
(but not below zero) by 1⁄12 of 5 percent of the 
excess (if any) of the taxpayer’s modified ad-
justed gross income for the applicable taxable 
year over the initial threshold amount in effect 
for such applicable taxable year. 
‘‘(B) LIMITATION
ON
INITIAL
REDUC-
TION.—The amount of the reduction under sub-
paragraph (A) shall not exceed the lesser of— 
‘‘(i) the excess (if any) of— 
‘‘(I) the monthly specified child 
allowance with respect to the taxpayer 
for such calendar month (determined 
without regard to this paragraph), 
over 
‘‘(II) the amount which would be 
determined under subclause (I) if the 
dollar amounts in effect under sub-
paragraphs (A) and (B) of paragraph 
(1) were each equal to $166.67, or 
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ceding taxable year or the second pre-
ceding taxable year (as specified in 
such election). 
‘‘(iv) MODIFIED ADJUSTED GROSS IN-
COME.—The term ‘modified adjusted gross 
income’ means adjusted gross income in-
creased by any amount excluded from 
gross income under section 911, 931, or 
933. 
‘‘(3) INFLATION ADJUSTMENTS.— 
‘‘(A) MONTHLY SPECIFIED CHILD ALLOW-
ANCE.—In the case of any month beginning 
after December 31, 2025, the $300 amount in 
paragraph (1)(A) shall be increased by an 
amount equal to— 
‘‘(i) such dollar amount, multiplied 
by— 
‘‘(ii) the percentage (if any) by 
which— 
‘‘(I) the CPI (as defined in sec-
tion 1(f)(4)) for the calendar year 
preceding the calendar year in which 
such month begins, exceeds 
‘‘(II) the CPI (as so defined) for 
calendar year 2024. 
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‘‘(B) INITIAL
THRESHOLD
AMOUNT.—In 
the case of any taxable year beginning after De-
cember 31, 2024, the dollar amounts in sub-
clauses (I) and (III) of paragraph (2)(D)(i) 
shall each be increased by an amount equal 
to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the percentage (if any) which 
would be determined under subparagraph 
(A)(ii) if subclause (II) thereof were ap-
plied by substituting ‘2022’ for ‘2024’. 
‘‘(C) ROUNDING.— 
‘‘(i) MONTHLY SPECIFIED CHILD AL-
LOWANCE.—Any increase under subpara-
graph (A) which is not a multiple of $10 
shall be rounded to the nearest multiple of 
$10. 
‘‘(ii) INITIAL THRESHOLD AMOUNT.— 
Any increase under subparagraph (B) 
which is not a multiple of $5,000 shall be 
rounded to the nearest multiple of $5,000. 
‘‘(c) SPECIFIED CHILD.—For purposes of this sec-
tion— 
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‘‘(1) IN GENERAL.—The term ‘specified child’ 
means, with respect to any taxpayer for any cal-
endar month, an individual— 
‘‘(A) who has the same principal place of 
abode as the taxpayer for more than one-half of 
such month, 
‘‘(B) who is younger than the taxpayer and 
will not, as of the close of such month, have at-
tained age 18, 
‘‘(C) who receives care from the taxpayer 
during such month that is not compensated, 
‘‘(D) who is not the spouse of the taxpayer 
at any time during such month, and 
‘‘(E) who either— 
‘‘(i) is a citizen, national, or resident 
of the United States, or 
‘‘(ii) if the taxpayer is a citizen or na-
tional of the United States, such individual 
is a legally adopted individual of such tax-
payer or is lawfully placed with such tax-
payer for legal adoption by such taxpayer. 
‘‘(2) CERTAIN
INDIVIDUALS
INELIGIBLE.—In 
the case of an individual who is a specified child 
with respect to another taxpayer for any calendar 
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month, such individual shall be treated for such cal-
endar month as having no specified children. 
‘‘(3) CARE FROM THE TAXPAYER.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided by the Secretary, whether any indi-
vidual receives care from the taxpayer (within 
the meaning of paragraph (1)(C)) shall be de-
termined on the basis of facts and cir-
cumstances with respect to the following fac-
tors: 
‘‘(i) The supervision provided by the 
taxpayer regarding the daily activities and 
needs of the individual. 
‘‘(ii) The maintenance by the taxpayer 
of a secure environment at which the indi-
vidual resides. 
‘‘(iii) The provision or arrangement by 
the taxpayer of, and transportation by the 
taxpayer to, medical care at regular inter-
vals and as required for the individual. 
‘‘(iv) The involvement by the taxpayer 
in, and financial and other support by the 
taxpayer for, educational or similar activi-
ties of the individual. 
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‘‘(v) Any other factor that the Sec-
retary determines to be appropriate to de-
termine whether the individual receives 
care from the taxpayer. 
‘‘(B) DETERMINATION OF WHETHER CARE 
IS
COMPENSATED.—For purposes of deter-
mining if care is compensated within the mean-
ing of paragraph (1)(C), compensation from the 
Federal Government, a State or local govern-
ment, a Tribal government, or any possession of 
the United States shall not be taken into ac-
count. 
‘‘(4) APPLICATION OF TIE-BREAKER RULES.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (D), if any individual would (but 
for this paragraph) be a specified child of 2 or 
more taxpayers for any month, such individual 
shall be treated as the specified child only of 
the taxpayer who is— 
‘‘(i) the parent of the individual (or, if 
such individual would (but for this para-
graph) be a specified child of 2 or more 
parents of the individual for such month, 
the parent of the individual determined 
under subparagraph (B)), 
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‘‘(ii) if the individual is not a specified 
child of any parent of the individual (deter-
mined without regard to this paragraph), 
the specified relative of the individual with 
the highest adjusted gross income for the 
taxable year which includes such month, or 
‘‘(iii) if the individual is neither a 
specified child of any parent of the indi-
vidual nor a specified child of any specified 
relative of the individual (in both cases de-
termined without regard to this para-
graph), the taxpayer with the highest ad-
justed gross income for the taxable year 
which includes such month. 
‘‘(B) TIE-BREAKER AMONG PARENTS.—If 
any individual would (but for this paragraph) 
be the specified child of 2 or more parents of 
the individual for any month, such child shall 
be treated only as the specified child of— 
‘‘(i) the parent with whom the child 
resided for the longest period of time dur-
ing such month, or 
‘‘(ii) if the child resides with both par-
ents for the same amount of time during 
such month, the parent with the highest 
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adjusted gross income for the taxable year 
which includes such month. 
‘‘(C) SPECIFIED RELATIVE.—For purposes 
of this paragraph, the term ‘specified relative’ 
means an individual who is— 
‘‘(i) an ancestor of a parent of the 
specified child, 
‘‘(ii) a brother or sister of a parent of 
the specified child, or 
‘‘(iii) a brother, sister, stepbrother, or 
stepsister of the specified child. 
‘‘(D) CERTAIN
PARENTS
OR
SPECIFIED 
RELATIVES NOT TAKEN INTO ACCOUNT.—This 
paragraph shall be applied without regard to 
any parent or specified relative of an individual 
for any month if— 
‘‘(i) such parent or specified relative 
elects to have such individual not be treat-
ed as a specified child of such parent or 
specified relative for such month, 
‘‘(ii) in the case of a parent of such 
individual, the adjusted gross income of 
the taxpayer (with respect to whom such 
individual would be treated as a specified 
child after application of this subpara-
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graph) for the taxable year which includes 
such month is higher than the highest ad-
justed gross income of any parent of the 
individual for any taxable year which in-
cludes such month (determined without re-
gard to any parent with respect to whom 
such individual is not a specified child, de-
termined without regard to subparagraphs 
(A) and (B) and after application of this 
subparagraph), and 
‘‘(iii) in the case of a specified relative 
of such individual, the adjusted gross in-
come of the taxpayer (with respect to 
whom such individual would be treated as 
a specified child after application of this 
subparagraph) for the taxable year which 
includes such month is higher than the 
highest adjusted gross income of any par-
ent and any specified relative of the indi-
vidual for any taxable year which includes 
such month (determined without regard to 
any parent and any specified relative with 
respect to whom such individual is not a 
specified child, determined without regard 
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to subparagraphs (A) and (B) and after 
application of this subparagraph). 
‘‘(E) TREATMENT OF JOINT RETURNS.— 
For purposes of this paragraph, with respect to 
any month, the adjusted gross income of each 
person who files a joint return for the taxable 
year which includes such month is the total ad-
justed gross income shown on the joint return 
for the taxable year. 
‘‘(F) PARENT.—Except as otherwise pro-
vided by the Secretary, the term ‘parent’ shall 
have the same meaning as when used in section 
152(c)(4). 
‘‘(5) TREATMENT OF TEMPORARY ABSENCES.— 
Except as provided in regulations or other guidance 
issued by the Secretary, for purposes of this sub-
section— 
‘‘(A) IN GENERAL.—In the case of any in-
dividual’s temporary absence from such individ-
ual’s principal place of abode, each day com-
posing the temporary absence shall— 
‘‘(i) be treated as a day at such indi-
vidual’s principal place of abode, 
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‘‘(ii) be treated as satisfying the care 
requirement described in paragraph (1)(C) 
for each day described in clause (i), and 
‘‘(iii) not be treated as a day at any 
other location. 
‘‘(B) TEMPORARY
ABSENCE.—For pur-
poses of subparagraph (A), an absence shall be 
treated as temporary if— 
‘‘(i) the individual would have resided 
at the place of abode but for the absence, 
and 
‘‘(ii) 
under 
the 
facts 
and 
cir-
cumstances, it is reasonable to assume that 
the individual will return to reside at the 
place of abode. 
‘‘(6) SPECIAL RULE FOR DIVORCED PARENTS, 
ETC.—Rules similar to the rules section 152(e) shall 
apply for purposes of this subsection. 
‘‘(7) ELIGIBILITY DETERMINED ON BASIS OF 
PRESUMPTIVE ELIGIBILITY.— 
‘‘(A) IN
GENERAL.—If a period of pre-
sumptive eligibility is established under section 
7527A(c) with respect to any taxpayer and 
child— 
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‘‘(i) such child shall be treated as the 
specified child of such taxpayer for any 
month in such period of presumptive eligi-
bility, and 
‘‘(ii) such child shall not be treated as 
the specified child of any other taxpayer 
with respect to whom a period of presump-
tive eligibility has not been established for 
any such month. 
‘‘(B) ABILITY OF CREDIT CLAIMANTS TO 
ESTABLISH PRESUMPTIVE ELIGIBILITY.—Noth-
ing in section 7527A(c) shall be interpreted to 
preclude a taxpayer from establishing a period 
of presumptive eligibility (including any period 
described in subparagraph (D) with respect to 
which payment could be made) with respect to 
any specified child for purposes of this section 
solely because such taxpayer affirmatively elects 
not to receive monthly advance child payments 
under section 7527A. 
‘‘(C) EXCEPTION FOR INCOME-BASED TIE- 
BREAKER RULES.—If a period of presumptive 
eligibility is established under section 7527A(c) 
for any individual with respect to any taxpayer 
and such individual is not the specified child of 
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such taxpayer for any month in such period by 
reason of such taxpayer failing to be described 
in clause (i), (ii), or (iii) of paragraph (4)(A) 
for the taxable year which includes such month, 
subparagraph (A) shall not apply with respect 
to such month. 
‘‘(D) TREATMENT
OF
CERTAIN
RETRO-
ACTIVE PAYMENTS.—If any payment is made 
under subparagraph (A) or (B) of section 
7527A(f)(3) or paragraph (1) or (2) of section 
7527A(g), with respect to any taxpayer and 
child for any period, such period shall be treat-
ed as a period of presumptive eligibility estab-
lished under section 7527A(c) with respect to 
such taxpayer and child for purposes of apply-
ing subparagraph (A). 
‘‘(E) FRAUD
AND
INTENTIONAL
DIS-
REGARD OF RULES OR REGULATIONS.—If the 
Secretary determines that the taxpayer com-
mitted fraud or intentionally disregarded rules 
or regulations in establishing or maintaining 
any period of presumptive eligibility, the 
months with respect to which such fraud or in-
tentional disregard relates shall not be treated 
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as a period of presumptive eligibility for pur-
poses of subparagraph (A). 
‘‘(d) CREDIT REFUNDABLE.—If the taxpayer (in the 
case of a joint return, either spouse) has a principal place 
of abode (determined as provided in section 32) in the 
United States or Puerto Rico for more than one-half of 
any calendar month during the taxable year, so much of 
the credit otherwise allowed under subsection (a) as is at-
tributable to monthly specified child allowances with re-
spect to any such calendar month shall be allowed under 
subpart C (and not allowed under this subpart). 
‘‘(e) IDENTIFICATION REQUIREMENTS.— 
‘‘(1) QUALIFYING CHILD IDENTIFICATION RE-
QUIREMENT.—No credit shall be allowed under this 
section to a taxpayer with respect to any qualifying 
child unless the taxpayer includes the name and tax-
payer identification number of such qualifying child 
on the return of tax for the taxable year and such 
taxpayer identification number was issued on or be-
fore the due date for filing such return. 
‘‘(2) TAXPAYER
IDENTIFICATION
REQUIRE-
MENT.—No credit shall be allowed under this section 
if the taxpayer identification number of the taxpayer 
was issued after the due date for filing the return 
for the taxable year. 
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‘‘(f) RESTRICTIONS ON TAXPAYERS WHO IMPROP-
ERLY
CLAIMED
CREDIT
OR
IMPROPERLY
RECEIVED 
MONTHLY ADVANCE CHILD PAYMENT.— 
‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT 
OR RECKLESS CLAIMS.— 
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section for any taxable year 
(and no payment shall be made under section 
7527A for any month) in the disallowance pe-
riod. 
‘‘(B) DISALLOWANCE
PERIOD.—For pur-
poses of subparagraph (A), the disallowance pe-
riod is— 
‘‘(i) the period of 120 calendar 
months after the most recent calendar 
month for which there was a final deter-
mination that the taxpayer’s claim of cred-
it under this section or section 24 (or pay-
ment received under section 7527A) was 
due to fraud, and 
‘‘(ii) the period of 24 calendar months 
after the most recent calendar month for 
which there was a final determination that 
the taxpayer’s claim of credit under this 
section or section 24 (or payment received 
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under section 7527A) was due to reckless 
or intentional disregard of rules and regu-
lations (but not due to fraud). 
‘‘(2) TAXPAYERS
MAKING
IMPROPER
PRIOR 
CLAIMS.—In the case of a taxpayer who is denied 
credit under this section or section 24 for any tax-
able year as a result of the deficiency procedures 
under subchapter B of chapter 63, no credit shall be 
allowed under this section for any subsequent tax-
able year (and no payment shall be made under sec-
tion 7527A for any subsequent month) unless the 
taxpayer provides such information as the Secretary 
may require to demonstrate eligibility for such cred-
it. 
‘‘(3) COORDINATION
WITH
POSSESSIONS
OF 
THE UNITED STATES.—For purposes of this sub-
section, a taxpayer’s claim of credit under this sec-
tion or section 24 (or payment received under sec-
tion 7527A) includes a claim of credit under this 
section or section 24 of the income tax law of any 
jurisdiction other than the United States (or similar 
payment received under section 7527A of such in-
come tax law), and a claim made or a payment re-
ceived from American Samoa pursuant to a plan de-
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scribed 
in 
subsection 
(h)(3)(B) 
or 
section 
24(k)(3)(B). 
‘‘(g) RECONCILIATION OF CREDIT AND MONTHLY 
ADVANCE CHILD PAYMENTS.— 
‘‘(1) IN GENERAL.—The amount otherwise de-
termined under subsection (a) with respect to any 
taxpayer for any taxable year shall be reduced (but 
not below zero) by the aggregate amount of pay-
ments made under section 7527A to such taxpayer 
for one or more calendar months in such taxable 
year. Any failure to so reduce the credit shall be 
treated as arising out of a mathematical or clerical 
error and assessed according to section 6213(b)(1). 
‘‘(2) INCREASE IN TAX EQUAL TO EXCESS AD-
VANCE PAYMENTS IN CERTAIN CIRCUMSTANCES.—If 
the aggregate amount of payments made to the tax-
payer under section 7527A for one or more calendar 
months in such taxable year exceeds the amount al-
lowed as a credit under subpart C by reason of this 
section with respect to such taxpayer for such tax-
able year (without regard to paragraph (1) of this 
subsection), the tax imposed by this chapter for such 
taxable year shall be increased by so much of such 
excess as is attributable to one or more of the fol-
lowing: 
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‘‘(A) Fraud, or reckless or intentional dis-
regard of rules and regulations, by the tax-
payer. 
‘‘(B) Changes in the taxpayer’s modified 
adjusted gross income or filing status that af-
fect the application of the limitation imposed by 
subsection (b)(2). 
‘‘(C) Payments under section 7527A which 
were made for months which were not part of 
a period of presumptive eligibility. 
‘‘(D) A failure to be the taxpayer described 
in clause (i), (ii), or (iii) of subsection 
(c)(4)(A). 
‘‘(E) A failure to satisfy the requirements 
of subsection (d). 
‘‘(F) A failure to satisfy the requirements 
of paragraphs (1) or (2) of subsection (e), ex-
cept that a failure to satisfy the requirements 
of subsection (e)(1) shall not be taken into ac-
count under this subparagraph if the taxpayer 
demonstrates to the satisfaction of the Sec-
retary that it is reasonable to expect that the 
qualifying child will be issued a taxpayer identi-
fication number and that the delay in such 
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issuance was due to reasonable cause and not 
willful neglect. 
‘‘(G) Such other circumstances as the Sec-
retary identifies for purposes of this subpara-
graph to facilitate the administration and en-
forcement by the Secretary of section 7527A, to 
minimize the amount of advance payments 
made under section 7527A to ineligible individ-
uals, and to prevent abuse. 
‘‘(H) Payments subject to treatment as ex-
cess advance payments after notice under sec-
tion 7527A(j)(2). 
‘‘(3) JOINT
RETURNS.—Except as otherwise 
provided by the Secretary, in the case of an advance 
payment made under section 7527A with respect to 
a joint return, half of such payment shall be treated 
as having been made to each individual filing such 
return. 
‘‘(4) COORDINATION
WITH
POSSESSIONS
OF 
THE UNITED STATES.—For purposes of this sub-
section, payments made under section 7527A include 
payments made by any jurisdiction other than the 
United States under section 7527A of the income 
tax law of such jurisdiction, and advance payments 
made by American Samoa pursuant to a plan de-
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scribed in subsection (h)(3)(B). Any increase in tax 
imposed on a taxpayer by reason of paragraph (2) 
of the income tax law of a jurisdiction other than 
the United States shall be considered to reduce the 
aggregate amount of payments made to such tax-
payer by such jurisdiction. In carrying out this sec-
tion, the Secretary shall coordinate with each posses-
sion of the United States to prevent any application 
of this paragraph that is inconsistent with the pur-
poses of this subsection. 
‘‘(h) APPLICATION OF CREDIT IN POSSESSIONS.— 
‘‘(1) MIRROR CODE POSSESSIONS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
pay to each possession of the United States 
with a mirror code tax system amounts equal to 
the loss (if any) to that possession by reason of 
the application of this section (determined with-
out regard to this subsection) with respect to 
taxable years beginning in calendar years after 
2024. Such amounts shall be determined by the 
Secretary based on information provided by the 
government of the respective possession. 
‘‘(B) COORDINATION
WITH
CREDIT
AL-
LOWED
AGAINST
UNITED
STATES
INCOME 
TAXES.—No credit shall be allowed under this 
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section for any taxable year to any individual to 
whom a credit is allowable against taxes im-
posed by a possession of the United States with 
a mirror code tax system by reason of the appli-
cation of this section in such possession for 
such taxable year. 
‘‘(C) MIRROR
CODE
TAX
SYSTEM.—For 
purposes of this paragraph, the term ‘mirror 
code tax system’ means, with respect to any 
possession of the United States, the income tax 
system of such possession if the income tax li-
ability of the residents of such possession under 
such system is determined by reference to the 
income tax laws of the United States as if such 
possession were the United States. 
‘‘(2) CROSS REFERENCES RELATED TO APPLI-
CATION
OF
CREDIT
TO
RESIDENTS
OF
PUERTO 
RICO.— 
‘‘(A) For application of refundable credit 
to residents of Puerto Rico, see subsection (d). 
‘‘(B) For application of advance payment 
to residents of Puerto Rico, see section 
7527A(b)(5). 
‘‘(3) AMERICAN SAMOA.— 
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‘‘(A) IN
GENERAL.—The Secretary shall 
pay to American Samoa amounts estimated by 
the Secretary as being equal to the aggregate 
benefits that would have been provided to resi-
dents of American Samoa by reason of the ap-
plication of this section for taxable years begin-
ning in calendar years after 2024 if the provi-
sions of this section had been in effect in Amer-
ican Samoa (applied as if American Samoa 
were the United States and without regard to 
the application of this section to residents of 
Puerto Rico under subsection (d)). 
‘‘(B) DISTRIBUTION REQUIREMENT.—Sub-
paragraph (A) shall not apply unless American 
Samoa has a plan, which has been approved by 
the Secretary, under which American Samoa 
will promptly distribute such payments to its 
residents. 
‘‘(C) COORDINATION
WITH
CREDIT
AL-
LOWED
AGAINST
UNITED
STATES
INCOME 
TAXES.— 
‘‘(i) IN GENERAL.—In the case of a 
taxable year with respect to which a plan 
is approved under subparagraph (B), this 
section (other than this subsection) shall 
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not apply to any individual eligible for a 
distribution under such plan. 
‘‘(ii) APPLICATION
OF
SECTION
IN 
EVENT
OF
ABSENCE
OF
APPROVED 
PLAN.—In the case of a taxable year with 
respect to which a plan is not approved 
under subparagraph (B), subsection (d) 
shall be applied by substituting ‘, Puerto 
Rico, or American Samoa’ for ‘or Puerto 
Rico’. 
‘‘(4) TREATMENT
OF
PAYMENTS.—For pur-
poses of section 1324 of title 31, United States 
Code, the payments under this subsection shall be 
treated in the same manner as a refund due from 
a credit provision referred to in subsection (b)(2) of 
such section. 
‘‘(i) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as the Secretary determines 
necessary or appropriate to carry out the purposes of this 
section, including regulations or other guidance— 
‘‘(1) for determining whether an individual re-
ceives care from a taxpayer for purposes of sub-
section (c)(1)(C), and 
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‘‘(2) to coordinate or modify the application of 
this section, section 24, and section 7527A in the 
case of any taxpayer— 
‘‘(A) whose taxable year is other than a 
calendar year, 
‘‘(B) whose filing status for a taxable year 
is different from the status used for deter-
mining one or more monthly payments under 
section 7527A during such taxable year, or 
‘‘(C) whose principal place of abode for 
any month is different from the principal place 
of abode used for determining the monthly pay-
ment under section 7527A for such month. 
‘‘SEC. 24B. CREDIT FOR CERTAIN OTHER DEPENDENTS. 
‘‘(a) IN GENERAL.—There shall be allowed as a cred-
it against the tax imposed by this chapter for the taxable 
year an amount equal to $500 with respect to each speci-
fied dependent of such taxpayer for such taxable year. 
‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN GENERAL.—The amount of the credit 
allowable under subsection (a) shall be reduced (but 
not below zero) by $50 for each $1,000 (or fraction 
thereof) by which the taxpayer’s modified adjusted 
gross income exceeds the threshold amount. 
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‘‘(2) THRESHOLD AMOUNT.—For purposes of 
this 
subsection, 
the 
term 
‘threshold 
amount’ 
means— 
‘‘(A) $400,000, in the case of a joint re-
turn or surviving spouse (as defined in section 
2(a)), 
‘‘(B) $200,000, in the case of a married 
individual filing a separate return, and 
‘‘(C) $300,000, in any other case. 
‘‘(3) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of this subsection, the term ‘modified 
adjusted gross income’ means adjusted gross income 
increased by any amount excluded from gross in-
come under section 911, 931, or 933. 
‘‘(c) SPECIFIED DEPENDENT.—For purposes of this 
section, the term ‘specified dependent’ means, with respect 
to any taxpayer for any taxable year, any dependent of 
such taxpayer (as defined in section 152) for such taxable 
year unless such dependent— 
‘‘(1) is a specified child of the taxpayer, or any 
other taxpayer, for any month during such taxable 
year, or 
‘‘(2) would not be a dependent if subparagraph 
(A) of section 152(b)(3) were applied without regard 
to all that follows ‘resident of the United States’. 
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‘‘(d) SPECIAL RULE FOR TAXABLE YEAR CHILD AT-
TAINS AGE 18.—If any dependent of the taxpayer attains 
age 18 during the taxable year— 
‘‘(1) whether such dependent is a specified de-
pendent shall be determined without regard to para-
graph (1) of subsection (c), and 
‘‘(2) with respect to such dependent, subsection 
(a) shall be applied by substituting an amount for 
‘$500’ that bears the same ratio to $500 as— 
‘‘(A) the excess of— 
‘‘(i) 12, over 
‘‘(ii) the number of months during 
such taxable year with respect to which 
such dependent is a specified child of the 
taxpayer or any other taxpayer, bears to 
‘‘(B) 12. 
‘‘(e) IDENTIFICATION REQUIREMENTS.—Rules simi-
lar to the rules of section 24A(e) shall apply for purposes 
of this section. 
‘‘(f) TAXABLE YEAR MUST BE FULL TAXABLE 
YEAR.—Except in the case of a taxable year closed by rea-
son of the death of the taxpayer, no credit shall be allow-
able under this section in the case of a taxable year cov-
ering a period of less than 12 months. 
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‘‘(g) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as the Secretary determines 
necessary or appropriate to carry out the purposes of this 
section.’’. 
(b) MONTHLY PAYMENT OF CHILD TAX CREDIT.— 
Section 7527A of such Code is amended to read as follows: 
‘‘SEC. 7527A. MONTHLY PAYMENTS OF CHILD TAX CREDIT. 
‘‘(a) IN GENERAL.—The Secretary shall pay to each 
taxpayer, during each calendar month which is during a 
period of presumptive eligibility with respect to the tax-
payer and any child, an amount equal to the monthly ad-
vance child payment determined with respect to such tax-
payer for such month. 
‘‘(b) MONTHLY ADVANCE CHILD PAYMENT.—The 
term ‘monthly advance child payment’ means, with respect 
to any taxpayer for any calendar month, the amount (if 
any) which is estimated by the Secretary as being equal 
to the monthly specified child allowance which would be 
determined under section 24A(b) with respect to such tax-
payer for such calendar month if— 
‘‘(1) the only specified children of such taxpayer 
for such calendar month are the specified children of 
such taxpayer for the reference month (determined 
without regard to section 24A(c)(7)), 
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‘‘(2) the ages of such children (and the status 
of such children as specified children) are deter-
mined for such calendar month by taking into ac-
count the passage of time since such reference 
month, 
‘‘(3) each child is only taken into account as a 
specified child for such calendar month if such cal-
endar month is during a period of presumptive eligi-
bility with respect to the taxpayer and such child, 
‘‘(4) the limitations of section 24A(b)(2) were 
applied with respect to the reference taxable year 
rather than with respect to the applicable taxable 
year, and 
‘‘(5) no monthly specified child allowance were 
determined with respect to such taxpayer for such 
calendar month unless the taxpayer (in the case of 
a joint return, either spouse) has a principal place 
of abode (determined as provided in section 32) in 
the United States or Puerto Rico for more than one- 
half of the reference month. 
‘‘(c) PERIOD OF PRESUMPTIVE ELIGIBILITY.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘period of presumptive eligibility’ 
means, with respect to any taxpayer and any child, 
the period— 
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‘‘(A) beginning with the calendar month 
following the calendar month during which the 
taxpayer provides the Secretary with sufficient 
information for the Secretary to— 
‘‘(i) determine that such child was a 
specified child of the taxpayer for the ref-
erence month (determined without regard 
to section 24A(c)(7)), and 
‘‘(ii) estimate the monthly advance 
child payment for such calendar month, 
and 
‘‘(B) ending with the earliest of— 
‘‘(i) the month beginning immediately 
after the month on which the Secretary 
sends the taxpayer a written notice that 
the taxpayer’s period of presumptive eligi-
bility with respect to such child is being 
terminated by reason of information known 
to the Secretary (including a failure to pro-
vide annual information under paragraph 
(2)) which casts doubt on such taxpayer’s 
status as being allowed the monthly speci-
fied child allowance under section 24A for 
such child (determined without regard to 
section 24A(c)(7)) with respect to one or 
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more 
months 
following 
the 
reference 
month, 
‘‘(ii) any month with respect to which 
the taxpayer notifies the Secretary that 
such taxpayer is not allowed a monthly 
specified child allowance for such month 
under section 24A(b) (determined without 
regard to section 24A(c)(7)), and 
‘‘(iii) the month beginning imme-
diately before the first month of a new pe-
riod of presumptive eligibility with respect 
to such taxpayer and such child which is 
established on the basis of a reference 
month more recent than the reference 
month with respect to which such prior pe-
riod was established (including on the basis 
of an annual renewal described in para-
graph (2)). 
‘‘(2) ANNUAL RENEWAL.—The Secretary shall 
terminate a taxpayer’s period of presumptive eligi-
bility with respect to any child under paragraph 
(1)(B)(i) unless such taxpayer provides information 
sufficient to establish a new period of presumptive 
eligibility with respect to such child (as described in 
paragraph (1)(B)(ii)) on an annual basis. 
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‘‘(3) AUTOMATIC ELIGIBILITY FOR BIRTH OF 
CHILD.—The Secretary shall issue regulations or 
other guidance to establish procedures pursuant to 
which, to the maximum extent administratively prac-
ticable— 
‘‘(A) a parent of a child born during a cal-
endar month shall be treated as automatically 
establishing a period of presumptive eligibility 
with respect to such child, 
‘‘(B) the month for which such period be-
gins, and the month by which the first annual 
renewal described in paragraph (2) must be 
completed, are determined, and 
‘‘(C) if the first monthly advance child 
payment with respect to such child is made 
after the calendar month in which such child is 
born, such payment is increased to properly 
take into account the months in such period of 
presumptive eligibility which precede the month 
in which such payment is made. 
‘‘(4) PRESUMPTIVE
ELIGIBILITY
BASED
ON 
CERTAIN GOVERNMENT PROGRAMS.—The Secretary 
shall issue regulations or other guidance to establish 
procedures under which— 
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‘‘(A) based on information provided to the 
Secretary by one or more government entities, 
a parent or specified relative of a child is treat-
ed as automatically establishing a period of pre-
sumptive eligibility with respect to such child, 
and 
‘‘(B) the month for which such period be-
gins, the month by which the first annual re-
newal described in paragraph (2) must be com-
pleted, and any additional circumstances under 
which such period will terminate, are deter-
mined. 
‘‘(5) TAXPAYER
RESPONSIBILITY
TO
NOTIFY 
SECRETARY.—In the event that any taxpayer is not 
allowed a monthly specified child allowance under 
section 24A(b) (determined without regard to sec-
tion 24A(c)(7)) for any month in a period of pre-
sumptive eligibility with respect to such taxpayer, 
such taxpayer shall notify the Secretary under para-
graph (1)(B)(ii) at such time and in such manner as 
the Secretary may provide. 
‘‘(6) TRANSITION RULE.—With respect periods 
of presumptive eligibility beginning during the first 
6 months to which this section applies, the Secretary 
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shall issue regulations or other guidance to establish 
procedures pursuant to which— 
‘‘(A) based on information known to the 
Secretary including returns of tax for either of 
the last 2 taxable years ending before such 
month, a parent or specified relative of a child 
is treated as automatically establishing a period 
of presumptive eligibility with respect to such 
child, and 
‘‘(B) the month for which such period be-
gins, the month by which the first annual re-
newal described in paragraph (2) must be com-
pleted, and any additional circumstances under 
which such period will terminate, are deter-
mined. 
‘‘(d) DETERMINATION OF REFERENCE MONTH AND 
REFERENCE TAXABLE YEAR.—For purposes of this sec-
tion— 
‘‘(1) REFERENCE MONTH.—The term ‘reference 
month’ means, with respect to any calendar month 
in a period of presumptive eligibility with respect to 
a taxpayer, the most recent of— 
‘‘(A) in the case of a taxpayer who filed a 
return of tax for the last taxable year ending 
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before such calendar month, the last month of 
such taxable year, 
‘‘(B) in the case of a taxpayer who filed a 
return of tax for the taxable year preceding the 
taxable year described in subparagraph (A), the 
last month of such preceding taxable year, and 
‘‘(C) in the case of a taxpayer who other-
wise provides the information referred to in 
subsection (c)(1)(A), the month with respect to 
which such information is provided. 
‘‘(2) REFERENCE TAXABLE YEAR.—The term 
‘reference taxable year’ means, with respect to any 
calendar month in a period of presumptive eligibility 
with respect to a taxpayer— 
‘‘(A) if the reference month with respect to 
such calendar month is determined under sub-
paragraph (A) or (B) of paragraph (1), the tax-
able year referred to in such subparagraph, re-
spectively, and 
‘‘(B) if the reference month with respect to 
such calendar month is determined under sub-
paragraph (1)(C), the last taxable year ending 
before such reference month. 
‘‘(e) METHODS OF PROVIDING INFORMATION TO ES-
TABLISH A PERIOD OF PRESUMPTIVE ELIGIBILITY.— 
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‘‘(1) IN GENERAL.—The Secretary shall ensure 
the information described in subsection (c)(1)(A) 
may be provided on the return of tax for the taxable 
year ending before the calendar year which includes 
the month for which such period would begin, 
through the on-line portal described in paragraph 
(2), or in such other manner as the Secretary may 
provide. 
‘‘(2) ON-LINE
INFORMATION
PORTAL.—The 
Secretary shall establish an on-line portal (available 
in multiple languages) which allows taxpayers to— 
‘‘(A) subject to such restrictions as the 
Secretary may provide, elect to begin or cease 
receiving payments under this section, and 
‘‘(B) provide the information described in 
subsection (c)(1)(A). 
‘‘(f) RESOLUTION OF COMPETING CLAIMS OF PRE-
SUMPTIVE
ELIGIBILITY
WITH
RESPECT
TO
SAME 
CHILD.— 
‘‘(1) IN GENERAL.—If there is a period of pre-
sumptive eligibility with respect to any taxpayer and 
child (hereafter referred to as the ‘original claim’), 
a period of presumptive eligibility would (without re-
gard to this subsection) be established with respect 
another taxpayer and such child (hereafter referred 
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to as the ‘challenge claim’), and the period of such 
challenge claim would overlap with the period of 
such original claim— 
‘‘(A) such challenge claim shall not be 
taken into account under this section unless the 
reference month with respect to which the chal-
lenge claim would be established is at least as 
recent as the reference month with respect to 
which the original claim is established, 
‘‘(B) such challenge claim shall not begin 
before the original claim is terminated, and 
‘‘(C) the Secretary shall establish proce-
dures under which the Secretary expeditiously 
adjudicates such claims on the basis of the 
most recent feasible reference month. 
‘‘(2) PROVISIONS
RELATED
TO
ADJUDICA-
TION.— 
‘‘(A) CHALLENGE CLAIM MUST RELATE TO 
AT
LEAST
MONTHS
PROSPECTIVELY.—The 
procedures established under paragraph (1)(C) 
shall require that the taxpayer establishing the 
challenge claim express a reasonable expectation 
and intent that such taxpayer would be allowed 
a monthly specified child allowance under sec-
tion 24A(b) (determined without regard to sec-
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tion 24A(c)(7)) for at least the first 2 months 
following the reference month referred to in 
paragraph (1)(C). 
‘‘(B) EXPEDITED
PROCESS; APPEALS.— 
The procedures established under paragraph 
(1)(C) shall include— 
‘‘(i) an expedited process for tax-
payers who meet such requirements as the 
Secretary may establish for such expedited 
process, and 
‘‘(ii) procedures for adjudicating an 
appeal of an adverse decision. 
‘‘(C) INFORMATION RECEIPT AND COORDI-
NATION.—For purposes of obtaining informa-
tion relevant to any adjudication under this 
paragraph, the Secretary may enter into agree-
ments to receive information from, and other-
wise coordinate with— 
‘‘(i) Federal agencies (including the 
Social Security Administration and the De-
partment of Agriculture), 
‘‘(ii) any State, local government, 
Tribal government, or possession of the 
United States, and 
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‘‘(iii) any other individual or entity 
that the Secretary determines to be appro-
priate for such purposes. 
‘‘(D) ADJUDICATION NOT TREATED AS AS-
SESSMENT.—Any adjudication under this para-
graph shall not be treated as an assessment de-
scribed in section 6201. 
‘‘(E) ADJUDICATION NOT TREATED AS IN-
SPECTION
OF
TAXPAYER’S
BOOKS
OF
AC-
COUNT.—The inspection of a taxpayer’s books 
of account in connection with any adjudication 
under this paragraph shall not be treated as an 
examination or inspection of a taxpayer’s books 
of account for purposes of section 7605(b). 
‘‘(3) RETROACTIVE PAYMENTS RELATED TO AD-
JUDICATION.— 
‘‘(A) DELAY IN ESTABLISHMENT OF CHAL-
LENGE CLAIM.—If the challenge claim is estab-
lished pursuant to the procedures established 
under paragraph (1)(C), the Secretary shall 
make a one-time payment to the taxpayer with 
respect to such claim equal to the aggregate 
amount of increases in the monthly advance 
child payments which would have been made to 
such taxpayer if such challenge claim had been 
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allowed to take effect without regard to this 
subsection. Any payment under this subpara-
graph shall be in addition to any payment made 
under subsection (g). 
‘‘(B) TERMINATION AND REINSTATEMENT 
OF ORIGINAL CLAIM.—If, pursuant to the pro-
cedures established under paragraph (1)(C), the 
original claim is terminated under subsection 
(c)(1)(B)(i) and a new period of presumptive 
eligibility is subsequently established pursuant 
to such procedures with respect the same tax-
payer and child as for such original claim, the 
Secretary shall make a one-time payment to the 
taxpayer with respect to such claim equal to the 
aggregate amount of increases in the monthly 
advance child payments which would have been 
made to such taxpayer if such original claim 
had never been terminated. 
‘‘(g) RULES RELATED
TO GRACE PERIODS
AND 
HARDSHIPS.— 
‘‘(1) AUTOMATIC GRACE PERIOD.— 
‘‘(A) IN GENERAL.—If a taxpayer estab-
lishes a period of presumptive eligibility with re-
spect to any child, elects the application of this 
paragraph, and demonstrates to the satisfaction 
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of the Secretary that such taxpayer would be al-
lowed a monthly specified child allowance under 
section 24A(b) (determined without regard to 
section 24A(c)(7)) for one or more of the 3 
months immediately preceding the first month 
of such period, the Secretary shall make a one- 
time payment to the taxpayer equal to the ag-
gregate amount of increases in the monthly ad-
vance child payments which would have been 
made to such taxpayer if such months were 
part of such period. The preceding sentence 
shall not apply to the extent that the Secretary 
determines that the failure to establish the pe-
riod of presumptive eligibility with respect to 
such child for any such month was due to fraud 
or reckless or intentional disregard of rules and 
regulations. 
‘‘(B) 
LIMITATION.—Subparagraph 
(A) 
shall not apply with respect to any taxpayer 
more than once during any 36-month period. 
‘‘(2) HARDSHIP.—If a taxpayer establishes a 
period of presumptive eligibility with respect to any 
child, elects the application of this paragraph (and 
does not elect the application of paragraph (1) with 
respect to the establishment of such period), dem-
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onstrates to the satisfaction of the Secretary that 
such taxpayer would be allowed a monthly specified 
child allowance under section 24A(b) (determined 
without regard to section 24A(c)(7)) for one or more 
of the 6 months immediately preceding the first 
month of such period, and the Secretary determines 
that the failure to establish the period of presump-
tive eligibility with respect to such child for such 
months was due to domestic violence, serious illness, 
natural disaster, or any other hardship, the Sec-
retary shall make a one-time payment to the tax-
payer equal to the aggregate amount of increases in 
the monthly advance child payments which would 
have been made to such taxpayer if such months 
were part of such period. 
‘‘(3) COORDINATION WITH RETROACTIVE PAY-
MENT
FOR
DELAY
IN
ESTABLISHMENT
OF
CHAL-
LENGE CLAIM.—For purposes of applying paragraph 
(1) or (2) with respect to any challenge claim to 
which subsection (f)(3)(A) applies, the period of pre-
sumptive eligibility shall be treated as including the 
period for which payment is made under such sub-
section. 
‘‘(h) PROVISIONS RELATED TO FORM, MANNER, AND 
TREATMENT OF PAYMENTS.— 
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‘‘(1) APPLICATION OF ELECTRONIC FUNDS PAY-
MENT REQUIREMENT.—The payments made by the 
Secretary under subsection (a) shall be made by 
electronic funds transfer to the same extent and in 
the same manner as if such payments were Federal 
payments not made under this title. 
‘‘(2) 
DELIVERY
OF
PAYMENTS.—Notwith-
standing any other provision of law, the Secretary 
may certify and disburse refunds payable under this 
section electronically to— 
‘‘(A) any account to which the payee au-
thorized, on or after January 1, 2024, the deliv-
ery of a refund of taxes under this title or of 
a Federal payment (as defined in section 3332 
of title 31, United States Code), 
‘‘(B) any account belonging to a payee 
from which that individual, on or after January 
1, 2024, made a payment of taxes under this 
title, or 
‘‘(C) any Treasury-sponsored account (as 
defined in section 208.2 of title 31, Code of 
Federal Regulations). 
‘‘(3) WAIVER
OF
CERTAIN
RULES.—Notwith-
standing section 3325 of title 31, United States 
Code, or any other provision of law, with respect to 
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any payment of a refund under this section, a dis-
bursing official in the executive branch of the United 
States Government may modify payment information 
received from an officer or employee described in 
section 3325(a)(1)(B) of such title for the purpose 
of facilitating the accurate and efficient delivery of 
such payment. Except in cases of fraud or reckless 
neglect, no liability under sections 3325, 3527, 
3528, or 3529 of title 31, United States Code, shall 
be imposed with respect to payments made under 
this paragraph. 
‘‘(4) EXCEPTION
FROM
REDUCTION
OR
OFF-
SET.—Any applicable payment (as defined in para-
graph (5)(E)(iii)) shall not be— 
‘‘(A) subject to reduction or offset pursu-
ant to section 3716 or 3720A of title 31, 
United States Code, 
‘‘(B) subject to reduction or offset pursu-
ant to subsection (c), (d), (e), or (f) of section 
6402, or 
‘‘(C) reduced or offset by other assessed 
Federal taxes that would otherwise be subject 
to levy or collection. 
‘‘(5) ASSIGNMENT OF BENEFITS.— 
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‘‘(A) IN GENERAL.—The right of any per-
son to any applicable payment shall not be 
transferable or assignable, at law or in equity, 
and no applicable payment shall be subject to, 
execution, levy, attachment, garnishment, or 
other legal process, or the operation of any 
bankruptcy or insolvency law. 
‘‘(B) ENCODING
OF
PAYMENTS.—In the 
case of an applicable payment described in sub-
paragraph (E)(iii)(I) that is paid electronically 
by direct deposit through the Automated Clear-
ing House (ACH) network, the Secretary of the 
Treasury (or the Secretary’s delegate) shall— 
‘‘(i) issue the payment using a unique 
identifier that is reasonably sufficient to 
allow a financial institution to identify the 
payment as an applicable payment, and 
‘‘(ii) further encode the payment pur-
suant to the same specifications as re-
quired for a benefit payment defined in 
section 212.3 of title 31, Code of Federal 
Regulations. 
‘‘(C) GARNISHMENT.— 
‘‘(i) ENCODED
PAYMENTS.—In the 
case of a garnishment order that applies to 
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an account that has received an applicable 
payment that is encoded as provided in 
subparagraph (B), a financial institution 
shall follow the requirements and proce-
dures set forth in part 212 of title 31, 
Code of Federal Regulations, except— 
‘‘(I) 
notwithstanding 
section 
212.4 of title 31, Code of Federal 
Regulations (and except as provided 
in subclause (II)), a financial institu-
tion shall not fail to follow the proce-
dures of sections 212.5 and 212.6 of 
such title with respect to a garnish-
ment order merely because such order 
has attached, or includes, a notice of 
right to garnish Federal benefits 
issued by a State child support en-
forcement agency, and 
‘‘(II) a financial institution shall 
not, with regard to any applicable 
payment, be required to provide the 
notice referenced in sections 212.6 
and 212.7 of title 31, Code of Federal 
Regulations. 
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‘‘(ii) OTHER PAYMENTS.—In the case 
of a garnishment order (other than an 
order that has been served by the United 
States) that has been received by a finan-
cial institution and that applies to an ac-
count into which an applicable payment 
that has not been encoded as provided in 
subparagraph (B) has been deposited elec-
tronically on any date during the lookback 
period or into which an applicable payment 
that has been deposited by check on any 
date in the lookback period, the financial 
institution, upon the request of the account 
holder, shall treat the amount of the funds 
in the account at the time of the request, 
up to the amount of the applicable pay-
ment (in addition to any amounts other-
wise protected under part 212 of title 31, 
Code of Federal Regulations), as exempt 
from a garnishment order without requir-
ing the consent of the party serving the 
garnishment order or the judgment cred-
itor. 
‘‘(iii) LIABILITY.—A financial institu-
tion that acts in good faith in reliance on 
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clauses (i) or (ii) shall not be subject to li-
ability or regulatory action under any Fed-
eral or State law, regulation, court or other 
order, or regulatory interpretation for ac-
tions concerning any applicable payments. 
‘‘(D) NO
RECLAMATION
RIGHTS.—This 
paragraph shall not alter the status of applica-
ble payments as tax refunds or other nonbenefit 
payments for purpose of any reclamation rights 
of the Department of the Treasury or the Inter-
nal Revenue Service as per part 210 of title 31, 
Code of Federal Regulations. 
‘‘(E) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) ACCOUNT
HOLDER.—The term 
‘account holder’ means a natural person 
whose name appears in a financial institu-
tion’s records as the direct or beneficial 
owner of an account. 
‘‘(ii) ACCOUNT
REVIEW.—The term 
‘account review’ means the process of ex-
amining deposits in an account to deter-
mine if an applicable payment has been de-
posited into the account during the 
lookback period. The financial institution 
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shall perform the account review following 
the procedures outlined in section 212.5 of 
title 31, Code of Federal Regulations and 
in accordance with the requirements of sec-
tion 212.6 of title 31, Code of Federal 
Regulations. 
‘‘(iii) APPLICABLE
PAYMENT.—The 
term ‘applicable payment’ means— 
‘‘(I) any payment made to an in-
dividual under this section (other than 
any payment made pursuant to para-
graph (6)), 
‘‘(II) any advance payment made 
by a possession of the United States 
with a mirror code tax system (as de-
fined in section 24(h)) pursuant to an 
election 
under 
paragraph 
(6)(B) 
which corresponds to a payment de-
scribed in subclause (I), and 
‘‘(III) 
any 
advance 
payment 
made by American Samoa pursuant to 
a program for making such payments 
which is described in paragraph 
(6)(C)(ii). 
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‘‘(iv) GARNISHMENT.—The term ‘gar-
nishment’ means execution, levy, attach-
ment, garnishment, or other legal process. 
‘‘(v) 
GARNISHMENT
ORDER.—The 
term ‘garnishment order’ means a writ, 
order, notice, summons, judgment, levy, or 
similar written instruction issued by a 
court, a State or State agency, a munici-
pality or municipal corporation, or a State 
child support enforcement agency, includ-
ing a lien arising by operation of law for 
overdue child support or an order to freeze 
the assets in an account, to effect a gar-
nishment against a debtor. 
‘‘(vi) LOOKBACK PERIOD.—The term 
‘lookback period’ means the two-month pe-
riod that begins on the date preceding the 
date of account review and ends on the 
corresponding date of the month two 
months earlier, or on the last date of the 
month two months earlier if the cor-
responding date does not exist. 
‘‘(6) APPLICATION OF ADVANCE PAYMENTS IN 
THE POSSESSIONS OF THE UNITED STATES.— 
‘‘(A) PUERTO RICO.— 
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‘‘(i) For application of child tax credit 
to residents of Puerto Rico, see section 
24A(d). 
‘‘(ii) For application of monthly ad-
vance child payments to residents of Puer-
to Rico, see subsection (b)(4). 
‘‘(B) MIRROR CODE POSSESSIONS.—In the 
case of any possession of the United States with 
a mirror code tax system (as defined in section 
24A(h)(1)(C)), this section shall not be treated 
as part of the income tax laws of the United 
States for purposes of determining the income 
tax law of such possession unless such posses-
sion elects to have this section be so treated. 
‘‘(C) ADMINISTRATIVE EXPENSES OF AD-
VANCE PAYMENTS.— 
‘‘(i) MIRROR CODE POSSESSIONS.—In 
the case of any possession described in 
subparagraph (B) which makes the elec-
tion described in such subparagraph, the 
amount otherwise paid by the Secretary to 
such 
possession 
under 
section 
24A(h)(1)(A) with respect to taxable years 
beginning in 2025, 2026, and 2027 shall 
each be increased by $300,000 if such pos-
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session has a plan, which has been ap-
proved by the Secretary, for making 
monthly advance child payments consistent 
with such election. 
‘‘(ii) 
AMERICAN
SAMOA.— 
The 
amount otherwise paid by the Secretary to 
American Samoa under subparagraph (A) 
of section 24A(h)(3) with respect to tax-
able years beginning in 2024, 2025, and 
2026 shall each be increased by $300,000 
if the plan described in subparagraph (B) 
of such section includes a program, which 
has been approved by the Secretary, for 
making monthly advance child payments 
under rules similar to the rules of this sec-
tion. 
‘‘(iii) TIMING
OF
PAYMENT.—The 
Secretary may pay, upon the request of the 
possession of the United States to which 
the payment is to be made, the amount of 
the increase determined under clause (i) or 
(ii), respectively, immediately upon ap-
proval of the plan with respect to which 
such payment relates. 
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‘‘(i) APPLICATION OF CERTAIN DEFINITIONS AND 
RULES APPLICABLE TO CHILD TAX CREDIT.— 
‘‘(1) DEFINITIONS.—Except as otherwise pro-
vided in this section, terms used in this section 
which are also used in section 24A shall have the 
same respective meanings as when used in section 
24A. 
‘‘(2) TREATMENT
OF
CERTAIN
DEATHS.—A 
child shall not be taken into account in determining 
the monthly advance child payment for any calendar 
month if the death of such child before the end of 
such month is known to the Secretary as of date on 
which the Secretary estimates such payment. 
‘‘(3) IDENTIFICATION
REQUIREMENTS.—Rules 
similar to the rules which apply under section 
24A(e) shall apply for purposes of this section ex-
cept that such rules shall apply with respect to the 
return of tax for the reference taxable year or, in the 
case of information provided through the on-line 
portal or otherwise, with respect to the information 
so provided. 
‘‘(4) RESTRICTIONS ON TAXPAYERS WHO IM-
PROPERLY CLAIMED CREDIT OR RECEIVED MONTHLY 
ADVANCE
CHILD
PAYMENTS.—For restrictions on 
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taxpayers who improperly claimed credit or received 
monthly advance child payments, see section 24A(f). 
‘‘(j) NOTICE OF PAYMENTS.— 
‘‘(1) IN GENERAL.—Not later than January 31 
of the calendar year following any calendar year dur-
ing which the Secretary makes one or more pay-
ments to any taxpayer under this section, the Sec-
retary shall provide such taxpayer with a written no-
tice which includes— 
‘‘(A) the taxpayer’s taxpayer identity (as 
defined in section 6103(b)(6)), 
‘‘(B) the aggregate amount of such pay-
ments made to such taxpayer during such cal-
endar year, and 
‘‘(C) such other information as the Sec-
retary determines appropriate. 
‘‘(2) CERTAIN PAYMENTS SUBJECT TO TREAT-
MENT AS EXCESS ADVANCE PAYMENTS.—In the case 
of any payments made to a taxpayer which the Sec-
retary has determined are subject to treatment as 
excess advance payments, the notice provided under 
paragraph (1) to such taxpayer shall include the 
amount of such payments. 
‘‘(k) NOTIFICATION OF CERTAIN EVENTS.—With re-
spect to any taxpayer receiving monthly advance child pay-
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ments under this section with respect to any specified 
child, the Secretary shall, to the maximum extent prac-
ticable, provide reasonable advance notice of each of the 
following: 
‘‘(1) Any month with respect to which such 
monthly advance child payment will increase (rel-
ative to the preceding month) by reason of an infla-
tion adjustment under section 24A(b)(3)(A). 
‘‘(2) Any month with respect to which such 
monthly advance child payment will be reduced (rel-
ative to the preceding month) by reason of such 
child ceasing to be a specified child by reason of at-
taining age 18. 
‘‘(3) In the case of a taxpayer with a specified 
child described in section 24A(b)(1)(A), any month 
with respect to which such monthly advance child 
payment will be reduced by reason of such child at-
taining age 6. 
‘‘(4) Such other events as the Secretary deter-
mines appropriate. 
‘‘(l) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as the Secretary determines 
necessary or appropriate to carry out the purposes of this 
section.’’. 
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(c) TERMINATION OF ANNUAL CHILD TAX CRED-
IT.—Section 24 of such Code is amended by adding at 
the end the following new subsection: 
‘‘(l) TERMINATION.—This section shall not apply to 
(and no payment shall be made under subsection (k) with 
respect to) any taxable year beginning after December 31, 
2024.’’. 
(d) DISCLOSURE OF INFORMATION RELATING TO AD-
VANCE
PAYMENT
OF
CHILD
TAX
CREDIT.—Section 
6103(e) of such Code is amended by adding at the end 
the following new paragraph: 
‘‘(12) DISCLOSURE OF INFORMATION RELATING 
TO ADVANCE PAYMENT OF CHILD TAX CREDIT.— 
‘‘(A) JOINT FILERS.—In the case of any 
individual who is eligible for monthly advance 
child payments under section 7527A, if the ref-
erence taxable year (as defined in section 
7527A(d)(2)) that the Secretary uses to cal-
culate such payments is a year for which the in-
dividual filed an income tax return jointly with 
another individual, the Secretary may disclose 
to such individual any information which is rel-
evant in determining the monthly advance child 
payment under section 7527A, and the individ-
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ual’s eligibility for such payment, including in-
formation regarding any of the following: 
‘‘(i) The number of specified children, 
including by reason of the birth of a child. 
‘‘(ii) The name and TIN of specified 
children. 
‘‘(iii) Marital status. 
‘‘(iv) Modified adjusted gross income. 
‘‘(v) Principal place of abode. 
‘‘(vi) Such other information as the 
Secretary may provide. 
‘‘(B) COMPETING CLAIMANTS.—In the case 
of any adjudication under section 7527A(f), the 
Secretary may disclose return information pro-
vided by the individual with the original claim 
to the individual with the challenge claim, re-
turn information provided by the individual 
with the challenge claim to the individual with 
the original claim, and any other information 
considered by the Secretary in such adjudica-
tion to either or both such individuals. Such in-
formation shall be limited to the items specified 
in subparagraph (A) and the following: 
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‘‘(i) Information received under any 
agreements or coordination the Secretary 
entered into with— 
‘‘(I) any State, local government, 
Tribal government, or possession of 
the United States, or 
‘‘(II) any other individual or enti-
ty that the Secretary determines to be 
appropriate for purposes of adjudi-
cating claims under section 7527A(f). 
‘‘(ii) Information considered by the 
Secretary about where and with whom the 
specified child resided. 
‘‘(iii) Information considered by the 
Secretary about expenditures made by the 
claimants to the extent such payments re-
late to the original or challenge claim.’’. 
(e) CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2) of such Code is amended 
by striking ‘‘and’’ at the end of subparagraph (Y), 
by striking the period at the end of subparagraph 
(Z) and inserting ‘‘, and’’, and by adding at the end 
the following new subparagraph: 
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‘‘(AA) section 24A(g)(2) (relating to in-
crease in tax equal to excess advance payments 
in certain circumstances).’’. 
(2) Section 152(f)(6)(B)(ii) of such Code is 
amended to read as follows: 
‘‘(ii) the credits under sections 24, 
24A, and 24B and the payments under 
sections 7527A,’’. 
(3) Section 3402(f)(1)(C) of such Code is 
amended by inserting ‘‘or section 24A (determined 
after application of subsection (g) thereof)’’ after 
‘‘section 24 (determined after application of sub-
section (j) thereof)’’. 
(4) Section 6103(l)(13)(A)(v) of such Code is 
amended by inserting ‘‘or section 24A, as the case 
may be’’ after ‘‘section 24’’. 
(5) Section 6211(b)(4)(A) of such Code is 
amended by inserting ‘‘24A by reason of subsection 
(d) thereof,’’ after ‘‘24 by reason of subsections (d) 
and (i)(1) thereof,’’. 
(6) Section 6213(g)(2)(I) of such Code is 
amended by inserting ‘‘or section 24A(e) (relating to 
monthly child tax credit)’’ after ‘‘section 24(e) (re-
lating to child tax credit)’’. 
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ssavage on LAPJG3WLY3PROD with BILLS
to section 7527A and inserting the following new 
item: 
‘‘Sec. 7527A. Monthly payments of child tax credit.’’. 
(f) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2024. 
(2) MONTHLY
ADVANCE
CHILD
PAYMENTS.— 
The amendments made by subsection (b) shall apply 
to— 
(A) calendar months beginning after the 
date of the enactment of this Act, and 
(B) in the case of section 7527A(g) of the 
Internal Revenue Code of 1986 (relating to 
grace periods and hardships), calendar months 
beginning after December 31, 2024. 
(3) INFORMATION
DISCLOSURE.—The amend-
ment made by subsection (d) shall take effect on the 
date of the enactment of this Act. 
Æ 
VerDate Sep 11 2014 
23:22 May 02, 2025
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H2763
ssavage on LAPJG3WLY3PROD with BILLS