I 
109TH CONGRESS 
1ST SESSION H. R. 3080 
To amend the Internal Revenue Code of 1986 to increase tax benefits for 
parents with children, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 27, 2005 
Mr. TERRY (for himself, Mr. BARTLETT of Maryland, Mr. FORTENBERRY, Ms. 
FOXX, Mr. MILLER of Florida, Mrs. MUSGRAVE, Mr. DOOLITTLE, Mr. 
PENCE, Mr. GINGREY, Ms. GINNY BROWN-WAITE of Florida, Mr. PITTS, 
Mr. BOUSTANY, and Mr. MANZULLO) 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 increase 
tax benefits for parents with children, and for other 
purposes. 
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 ‘‘Parents’ Tax Relief 
Act of 2005’’.
SEC. 2. MINIMUM DEPENDENT CARE CREDIT FOR PARENTS 
CARING FOR CHILDREN AT HOME. 
(a) IN GENERAL.—Subsection (e) of section 21 of the 
Internal Revenue Code of 1986 (relating to special rules) 
is amended by adding at the end the following new para-
graph: 
‘‘(11) MINIMUM CREDIT ALLOWED FOR STAY- 
AT-HOME PARENTS.—In the case of any taxpayer 
with one or more qualifying individuals described in 
subparagraph (A) of subsection (b)(1) under the age 
of 6 at any time during the taxable year, such tax-
payer shall be deemed to have employment-related 
expenses with respect to each such qualifying indi-
vidual and earned income in an amount equal to the 
greater of— 
‘‘(A) the amount of employment-related ex-
penses incurred for such qualifying individuals 
for the taxable year (determined under this sec-
tion without regard to this paragraph), or 
‘‘(B) $250 for each month beginning in 
such taxable year with respect to which such 
qualifying individual has not attained age 6 as 
of the beginning of such month.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2004.
SEC. 3. INCREASE IN PERSONAL EXEMPTION AMOUNT. 
(a) IN GENERAL.—Paragraph (1) of section 151(d) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘$2,000’’ and inserting ‘‘$5,000’’ . 
(b) INFLATION ADJUSTMENT.—Subparagraph (A) of 
section 151(d)(4) of such Code is amended— 
(1) by striking ‘‘1989’’ and inserting ‘‘2005’’, 
and 
(2) by striking ‘‘1988’’ in clause (ii) and insert-
ing ‘‘2004’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
SEC. 4. ELIMINATION OF MARRIAGE PENALTY IN ALL RATE 
BRACKETS. 
(a) IN GENERAL.—Paragraph (8) of section 1(f) of 
the Internal Revenue Code of 1986 (relating to phaseout 
of marriage penalty in 15-percent bracket) is amended to 
read as follows: 
‘‘(8) ELIMINATION OF MARRIAGE PENALTY.— 
With respect to taxable years beginning after De-
cember 31, 2004, in prescribing the tables under 
paragraph (1)— 
‘‘(A) the minimum and maximum amounts 
of taxable income in each rate bracket in the 
table contained in subsection (a) shall be 200
percent of the minimum and maximum amounts 
of taxable income in the corresponding rate 
bracket in the table contained in subsection (c) 
(after any other adjustment under this sub-
section), and 
‘‘(B) 
the 
comparable 
taxable 
income 
amounts in the table contained in subsection 
(d) shall be 1/2 of the amounts determined 
under subparagraph (A).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section apply to taxable years beginning after Decem-
ber 31, 2004. 
SEC. 5. STANDARD DEDUCTION FOR BUSINESS USE OF 
HOME. 
(a) IN GENERAL.—Subsection (c) of section 280A of 
the Internal Revenue Code of 1986 (relating to disallow-
ance of certain expenses in connection with business use 
of home, rental of vacation homes, etc.) is amended by 
adding at the end the following new paragraph: 
‘‘(7) STANDARD HOME OFFICE DEDUCTION.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual that is allowed a deduction for the use of 
a home office because of a use described in 
paragraphs (1), (2), or (4) of this subsection, 
notwithstanding the limitations of paragraph
(5), such individual may elect to use the stand-
ard home office deduction for the taxable year. 
‘‘(B) STANDARD
HOME
OFFICE
DEDUC-
TION
AMOUNT.—For purposes of this para-
graph, the standard home office deduction is 
the lesser of— 
‘‘(i) $2,500, or 
‘‘(ii) the gross income derived from 
the individual’s trade or business for which 
such use occurs.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 6. INCREASE AND OTHER MODIFICATIONS IN CHILD 
TAX CREDIT MADE PERMANENT. 
(a) IN GENERAL.—Title IX of the Economic Growth 
and Tax Relief Reconciliation Act of 2001 shall not apply 
to the amendments made by section 201 of such Act (re-
lating to modifications to child tax credit). 
(b) CREDIT AMOUNT ADJUSTED FOR INFLATION.— 
Section 24 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new sub-
section: 
‘‘(g) INFLATION ADJUSTMENT.—In the case of any 
taxable year beginning in a calendar year after 2005, the
$1,000 amount contained in subsection (a) shall be in-
creased by an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) 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 2004’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
Any increase determined under the preceding sentence 
shall be rounded to the nearest multiple of $50.’’. 
SEC. 7. TELECOMMUTING TAX CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business related credits) is amended by 
adding at the end the following new section: 
‘‘SEC. 45J. TELECOMMUTING CREDIT. 
‘‘(a) DETERMINATION OF AMOUNT.—For purposes of 
section 38, the amount of the telecommuting credit deter-
mined under this section for the taxable year shall be 
equal to 40 percent of the qualified first-year wages for 
such year. 
‘‘(b) QUALIFIED FIRST-YEAR WAGES.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified first- 
year wages’ means, with respect to any individual,
qualified wages attributable to service rendered dur-
ing the 1-year period beginning with the day the in-
dividual begins work for the employer. 
‘‘(2) QUALIFIED WAGES.—The term ‘qualified 
wages’ means the wages paid or incurred by the em-
ployer during the taxable year to qualified telecom-
muters. 
‘‘(3) ONLY FIRST $6,000 OF WAGES PER YEAR 
TAKEN INTO ACCOUNT.—The amount of the quali-
fied first-year wages which may be taken into ac-
count with respect to any individual shall not exceed 
$6,000 per year. 
‘‘(c) QUALIFIED TELECOMMUTER.—For purposes of 
this section, the term ‘qualified telecommuter’ means any 
individual who renders not less than 40 percent of the 
service described in subsection (b)(2) from the individual’s 
principal residence. 
‘‘(d) WAGES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘wages’ has the 
meaning given to such term by subsection (b) of sec-
tion 3306 (determined without regard to any dollar 
limitation contained in such section). 
‘‘(2) ON-THE-JOB TRAINING AND WORK SUP-
PLEMENTATION PAYMENTS.—
‘‘(A) EXCLUSION FOR EMPLOYERS RECEIV-
ING
ON-THE-JOB
TRAINING
PAYMENTS.—The 
term ‘wages’ shall not include any amounts 
paid or incurred by an employer for any period 
to any individual for whom the employer re-
ceives federally funded payments for on-the-job 
training of such individual for such period. 
‘‘(B) REDUCTION FOR WORK SUPPLEMEN-
TATION
PAYMENTS
TO
EMPLOYERS.—The 
amount of wages which would (but for this sub-
paragraph) be qualified wages under this sec-
tion for an employer with respect to an indi-
vidual for a taxable year shall be reduced by an 
amount equal to the amount of the payments 
made to such employer (however utilized by 
such employer) with respect to such individual 
for such taxable year under a program estab-
lished under section 482(e) of the Social Secu-
rity Act. 
‘‘(e) SPECIAL RULES.—For purposes of this section, 
rules similar to the rules of section 52 and subsections 
(f), (g), (i), (j), and (k) of section 51 shall apply.’’. 
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of such Code is amended by striking ‘‘plus’’ 
at the end of paragraph (18), by striking the period at
the end of paragraph (19) and inserting ‘‘, plus’’, and by 
adding at the end the following new paragraph: 
‘‘(20) the telecommuting credit determined 
under section 45J(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 fol-
lowing new item: 
‘‘Sec. 45J. Telecommuting credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable year beginning after De-
cember 31, 2004. 
SEC. 8. EMPLOYER-PROVIDED COMPUTER EQUIPMENT 
TREATED AS FRINGE BENEFIT. 
(a) IN GENERAL.—Subsection (a) of section 132 of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘or’’ at the end of paragraph (7), by striking the period 
at the end of paragraph (8) and inserting ‘‘, or’’, and by 
adding at the end the following new paragraph: 
‘‘(9) 
qualified 
employer-provided 
computer 
equipment fringe.’’. 
(b) QUALIFIED EMPLOYER-PROVIDED COMPUTER 
EQUIPMENT FRINGE.—Section 132 of such Code is 
amended by adding at the end the following new sub-
section:
‘‘(o) QUALIFIED EMPLOYER-PROVIDED COMPUTER 
EQUIPMENT FRINGE.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘qualified em-
ployer-provided computer equipment fringe’ means 
any computer and related equipment and services 
provided to an employee by an employer if— 
‘‘(A) such computer and related equipment 
and services are necessary for the employee to 
perform work for the employer from the em-
ployee’s home, and 
‘‘(B) the employee makes substantial busi-
ness use of the equipment in the performance 
of work for the employer. 
‘‘(2) SUBSTANTIAL
USE.—For purposes of 
paragraph (1), the term ‘substantial business use’ 
includes standby use for periods when work from 
home may be required by the employer such as dur-
ing work closures caused by the threat of terrorism, 
inclement weather, or natural disasters.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004.
SEC. 9. INCREASED BENEFITS FOR INDIVIDUALS PRE-
CLUDED FROM PERFORMING REMUNERA-
TIVE WORK BY NEED TO PROVIDE CHILD 
CARE. 
Title II of the Social Security Act (42 U.S.C. 401 
et seq.) is amended by adding at the end the following 
new section: 
‘‘INCREASED
BENEFITS
FOR
INDIVIDUALS
PRECLUDED 
FROM PERFORMING REMUNERATIVE WORK BY NEED 
TO PROVIDE CHILD CARE 
‘‘SEC. 235. (a) GENERAL RULE.— For purposes of 
determining entitlement to and the amount of any monthly 
benefit or lump-sum death payment payable under this 
title on the basis of the wages and self-employment income 
of any individual, and for purposes of section 216(i)(3), 
if such individual— 
‘‘(1) is not otherwise credited under this title, 
for one or more of such individual’s elapsed years 
(referred to in section 215(b)(3)), with wages at 
least equal to the national average wage index (as 
defined in section 209(k)) for such year, and 
‘‘(2) is a qualified individual in connection with 
any such elapsed year after 2005, 
then such individual shall be credited under this title for 
such year after 2005 with additional wages in an amount 
necessary to increase the total wages credited to such indi-
vidual under this title for such year to an amount equal 
to the national average wage index (as so defined) for such 
year. 
‘‘(b) QUALIFIED INDIVIDUAL.— For purposes of this 
section, the term ‘qualified individual’ means, in connec-
tion with any year, any individual in any case in which— 
‘‘(1) such individual is married for a period 
during such year of not less than 90 days, 
‘‘(2) throughout such period during such year, 
such individual and such individual’s spouse live 
with a qualified child, and 
‘‘(3) more than 50 percent of the total remu-
neration of such individual and such individual’s 
spouse for such year which is attributable to wages 
or self-employment income earned or derived during 
the period during such year for which the require-
ments of paragraphs (1) and (2) are met consists of 
wages or self-employment income earned or derived 
away from home by such spouse. 
‘‘(c) QUALIFIED CHILD.—For purposes of this sec-
tion, the term ‘qualified child’ means, in connection with 
a qualified individual, a child of such individual (or such 
individual’s spouse referred to in subsection (b)(2)) who— 
‘‘(1) is less than 6 years of age, or
‘‘(2) is less than 10 years of age, is under a dis-
ability, and is unable to attend school. 
‘‘(d) LIMITATION TO 10 ELAPSED YEARS.—In any 
case in which the requirements of subsection (a) are met 
in connection with more than 10 elapsed years of an indi-
vidual, subsection (a) shall apply only with respect to those 
elapsed years, not in excess of 10, which, when taken into 
account in the application of subsection (a), result in the 
highest primary insurance amount for such individual, 
taking into account which years would be excluded from 
benefit computation years under section 215(b)(2)(B)(i). 
‘‘(e) PROTECTION OF TRUST FUND BALANCES.— 
There are authorized to be appropriated to each of the 
Trust Funds, consisting of the Federal Old-Age and Sur-
vivors Insurance Trust Fund, the Federal Disability In-
surance Trust Fund, and the Federal Hospital Insurance 
Trust Fund, for transfer on July 1 of each calendar year 
after 2005 to such Trust Fund from amounts in the gen-
eral fund in the Treasury not otherwise appropriated, an 
amount equal to the total of the additional amounts which 
would be appropriated to such Trust Fund for the fiscal 
year ending September 30 of such calendar year under 
section 201 or 1817 of this Act if the amounts of the addi-
tional wages credited for such calendar year by reason of 
subsection (a) constituted remuneration for employment
(as defined in section 3121(b) of the Internal Revenue 
Code of 1986) for purposes of the taxes imposed by sec-
tions 3101 and 3111 of the Internal Revenue Code of 
1986. Amounts authorized to be appropriated under this 
subsection for transfer on July 1 of each calendar year 
shall be determined on the basis of estimates of the Com-
missioner of Social Security of the wages required to be 
credited for such calendar year under subsection (a); and 
proper adjustments shall be made in amounts authorized 
to be appropriated for subsequent transfer to the extent 
prior estimates were in excess of or were less than such 
wages so credited.’’. 
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