319 
eligibility with respect to such child (as described in 
paragraph (1)(B)(ii)) on an annual basis. 
‘‘(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 
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shall issue regulations or other guidance to establish 
procedures under which— 
‘‘(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 
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6 months to which this section applies, the Secretary 
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 Amer-
ican Samoa under subparagraph (A) of 
section 24A(h)(3) with respect to taxable 
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 mak-
ing monthly advance child payments under 
rules similar to the rules of this section. 
‘‘(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. 
‘‘(i) APPLICATION OF CERTAIN DEFINITIONS AND 
RULES APPLICABLE TO CHILD TAX CREDIT.— 
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‘‘(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 
taxpayers who improperly claimed credit or received 
monthly advance child payments, see section 24A(f). 
‘‘(j) NOTICE OF PAYMENTS.— 
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‘‘(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-
ments under this section with respect to any specified 
child, the Secretary shall, to the maximum extent prac-
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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.’’. 
(c) TERMINATION OF ANNUAL CHILD TAX CRED-
IT.—Section 24 is amended by adding at the end the fol-
lowing new subsection: 
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‘‘(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, 
2025.’’. 
(d) DISCLOSURE OF INFORMATION RELATING TO AD-
VANCE
PAYMENT
OF
CHILD
TAX
CREDIT.—Section 
6103(e) 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-
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. 
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‘‘(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: 
‘‘(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 
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‘‘(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) is amended by striking 
‘‘and’’ at the end of subparagraph (Y), by striking 
the period at the end of subparagraph (Z) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new subparagraph: 
‘‘(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) is amended to read 
as follows: 
‘‘(ii) the credits under sections 24, 
24A, and 24B and the payments under 
sections 7527A,’’. 
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(3) Section 3402(f)(1)(C) is amended by insert-
ing ‘‘or section 24A (determined after application of 
subsection (g) thereof)’’ after ‘‘section 24 (deter-
mined after application of subsection (j) thereof)’’. 
(4) Section 6103(l)(13)(A)(v) is amended by in-
serting ‘‘or section 24A, as the case may be’’ after 
‘‘section 24’’. 
(5) Section 6211(b)(4)(A) is amended by insert-
ing ‘‘24A by reason of subsection (d) thereof,’’ after 
‘‘24 by reason of subsections (d) and (i)(1) there-
of,’’. 
(6) Section 6213(g)(2)(I) is amended by insert-
ing ‘‘or section 24A(e) (relating to monthly child tax 
credit)’’ after ‘‘section 24(e) (relating to child tax 
credit)’’. 
(7) Section 6213(g)(2)(L) is amended by insert-
ing ‘‘24A,’’ after ‘‘24,’’. 
(8) Section 6213(g)(2)(P) is amended— 
(A) by inserting ‘‘or 24A(f)(2)’’ after ‘‘sec-
tion 24(g)(2)’’, 
(B) by inserting ‘‘or 24A’’ after ‘‘under 
section 24’’, and 
(C) by striking ‘‘subsection (g)(1) thereof’’ 
and inserting ‘‘section 24(g)(1) or section 
24A(f)(1), respectively’’. 
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(9) Section 6695(g)(2) is amended by inserting 
‘‘24A,’’ after ‘‘24,’’. 
(10) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting 
‘‘24A,’’ after ‘‘24,’’. 
(11) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 24 the fol-
lowing new items: 
‘‘Sec. 24A. Monthly child tax credit. 
‘‘Sec. 24B. Credit for certain other dependents.’’. 
(12) The table of sections for chapter 77 is 
amended by striking the item relating 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, 2025. 
(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 
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(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, 2025. 
(3) INFORMATION
DISCLOSURE.—The amend-
ment made by subsection (d) shall take effect on the 
date of the enactment of this Act. 
Subtitle B—Child and Dependent 
Care 
SEC. 32001. ENHANCEMENT OF CHILD AND DEPENDENT 
CARE TAX CREDIT. 
(a) IN GENERAL.—Paragraph (2) of section 21(a) is 
amended to read as follows: 
‘‘(2) APPLICABLE PERCENTAGE.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the term ‘applicable percentage’ 
means 50 percent reduced (but not below the 
phaseout percentage) by 1 percentage point for 
each $2,000 (or fraction thereof) by which the 
taxpayer’s adjusted gross income for the taxable 
year exceeds $125,000. 
‘‘(B) PHASEOUT PERCENTAGE.—For pur-
poses of subparagraph (A), the term ‘phaseout 
percentage’ means 20 percent reduced (but not 
below zero) by 1 percentage point for each 
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349 
$2,000 (or fraction thereof) by which the tax-
payer’s adjusted gross income for the taxable 
year exceeds $400,000.’’. 
(b) INCREASE IN DOLLAR LIMIT ON AMOUNT CRED-
ITABLE.—Subsection (c) of section 21 is amended— 
(1) in paragraph (1), by striking ‘‘$3,000’’ and 
inserting ‘‘$8,000’’; and 
(2) in paragraph (2), by striking ‘‘$6,000’’ and 
inserting ‘‘$16,000’’. 
(c) SPECIAL RULE FOR MARRIED COUPLES FILING 
SEPARATE RETURNS.—Paragraph (2) of section 21(e) is 
amended to read as follows: 
‘‘(2) MARRIED COUPLES FILING SEPARATE RE-
TURNS.— 
‘‘(A) IN GENERAL.—In the case of married 
individuals who do not file a joint return for the 
taxable year— 
‘‘(i) the applicable percentage under 
subsection (a)(2) and the number of quali-
fying individuals and aggregate amount ex-
cludable under section 129 for purposes of 
subsection (c) shall be determined with re-
spect to each such individual as if the indi-
vidual had filed a joint return with the in-
dividual’s spouse, and 
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‘‘(ii) the aggregate amount of the 
credits allowed under this section for such 
taxable year with respect to both spouses 
shall not exceed the amount which would 
have been allowed under this section if the 
individuals had filed a joint return. 
‘‘(B) REGULATIONS.—The Secretary shall 
prescribe such regulations or other guidance as 
is necessary to carry out the purposes of this 
subsection.’’. 
(d) ADJUSTMENT FOR INFLATION.—Section 21 is 
amended by adding at the end the following new sub-
section: 
‘‘(i) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of a calendar 
year beginning after 2026, the $125,000 amount in 
paragraph (2) of subsection (a) and the dollar 
amounts in subsection (c) shall each be increased by 
an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2025’ for 
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‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(2) ROUNDING.—If any dollar amount, after 
being increased under paragraph (1), is not a mul-
tiple of $100, such dollar amount shall be rounded 
to the next lowest multiple of $100.’’. 
(e) CREDIT MADE REFUNDABLE.—Section 21(g) is 
amended to read as follows: 
‘‘(g) CREDIT MADE REFUNDABLE FOR CERTAIN IN-
DIVIDUALS.—If the taxpayer (in the case of a joint return, 
either spouse) has a principal place of abode in the United 
States (determined as provided in section 32) for more 
than one-half of the taxable year, the credit allowed under 
subsection (a) shall be treated as a credit allowed under 
subpart C (and not allowed under this subpart).’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 32002. INCREASED MAXIMUM CONTRIBUTION TO DE-
PENDENT CARE ASSISTANCE PROGRAMS. 
(a) IN GENERAL.—Section 129(a)(2)(A) is amended 
by striking ‘‘$5,000 ($2,500’’ and inserting ‘‘$10,000 
($5,000’’. 
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(b) COST-OF-LIVING ADJUSTMENT.—Section 129 is 
amended by adding at the end the following new sub-
section: 
‘‘(f) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—Each dollar amount in this 
section shall be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which such taxable year begins, deter-
mined by substituting ‘calendar year 2024’ for 
‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(2) ROUNDING.—If any increase under para-
graph (1) is not a multiple of $50, such increase 
shall be rounded to the nearest multiple of $50.’’. 
(c) REMOVING DEADWOOD.—Section 129(a)(2) is 
amended by striking subparagraph (D). 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar years beginning after 
December 31, 2025. 
SEC. 32003. CREDIT FOR WORKING FAMILY CAREGIVERS. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 25E the following new section: 
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‘‘SEC. 25F. WORKING FAMILY CAREGIVERS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli-
gible caregiver, there shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an 
amount equal to 30 percent of the qualified expenses paid 
by the taxpayer during the taxable year to the extent that 
such expenses exceed $2,000. 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The amount allowed as a 
credit under subsection (a) for the taxable year shall 
not exceed $5,000. 
‘‘(2) ADJUSTMENT
FOR
INFLATION.—In the 
case of any taxable year beginning after 2026, the 
dollar amount contained in paragraph (1) shall be 
increased by an amount equal to the product of— 
‘‘(A) such dollar amount, and 
‘‘(B) the medical care cost adjustment de-
termined under section 213(d)(10)(B)(ii) for 
the calendar year in which the taxable year be-
gins, determined by substituting ‘2025’ for 
‘1996’ in subclause (II) thereof. 
If any increase determined under the preceding sen-
tence is not a multiple of $50, such increase shall 
be rounded to the next lowest multiple of $50. 
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‘‘(c) ELIGIBLE CAREGIVER.—For purposes of this 
section, the term ‘eligible caregiver’ means an individual 
who— 
‘‘(1) during the taxable year pays or incurs 
qualified expenses in connection with providing care 
for a qualified care recipient, and 
‘‘(2) has earned income (as defined in section 
32(c)(2)) for the taxable year in excess of $7,500. 
‘‘(d) QUALIFIED CARE RECIPIENT.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘qualified care re-
cipient’ means, with respect to any taxable year, any 
individual who— 
‘‘(A) is the spouse of the eligible caregiver, 
or any other person who bears a relationship to 
the eligible caregiver described in any of sub-
paragraphs 
(A) 
through 
(H) 
of 
section 
152(d)(2), and 
‘‘(B) has been certified, before the due 
date for filing the return of tax for the taxable 
year, by a licensed health care practitioner (as 
defined in section 7702B(c)(4)) as being an in-
dividual with long-term care needs described in 
paragraph (3) for a period— 
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‘‘(i) which is at least 180 consecutive 
days, and 
‘‘(ii) a portion of which occurs within 
the taxable year. 
‘‘(2) PERIOD
FOR
MAKING
CERTIFICATION.— 
Notwithstanding paragraph (1)(B), a certification 
shall not be treated as valid unless it is made within 
the 391⁄2-month period ending on such due date (or 
such other period as the Secretary prescribes). 
‘‘(3) INDIVIDUALS
WITH
LONG-TERM
CARE 
NEEDS.—An individual is described in this para-
graph if the individual meets any of the following re-
quirements: 
‘‘(A) The individual is at least 6 years of 
age and— 
‘‘(i) is unable to perform (without 
substantial assistance from another indi-
vidual) at least 2 activities of daily living 
(as defined in section 7702B(c)(2)(B)) due 
to a loss of functional capacity, or 
‘‘(ii) requires substantial supervision 
to protect such individual from threats to 
health and safety due to severe cognitive 
impairment and is unable to perform, with-
out reminding or cuing assistance, at least 
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1 activity of daily living (as so defined) or 
to the extent provided in regulations pre-
scribed by the Secretary (in consultation 
with the Secretary of Health and Human 
Services), is unable to engage in age ap-
propriate activities. 
‘‘(B) The individual is at least 2 but not 
6 years of age and is unable due to a loss of 
functional capacity to perform (without sub-
stantial assistance from another individual) at 
least 2 of the following activities: eating, trans-
ferring, or mobility. 
‘‘(C) The individual is under 2 years of age 
and requires specific durable medical equipment 
by reason of a severe health condition or re-
quires a skilled practitioner trained to address 
the individual’s condition to be available if the 
individual’s parents or guardians are absent. 
‘‘(e) QUALIFIED EXPENSES.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—Subject to paragraph (4), 
the term ‘qualified expenses’ means expenditures for 
goods, services, and supports that— 
‘‘(A) assist a qualified care recipient with 
accomplishing activities of daily living (as de-
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fined in section 7702B(c)(2)(B)) and instru-
mental activities of daily living (as defined in 
section 1915(k)(6)(F) of the Social Security 
Act (42 U.S.C. 1396n(k)(6)(F))), and 
‘‘(B) are provided solely for use by such 
qualified care recipient. 
‘‘(2) ADJUSTMENT
FOR
OTHER
TAX
BENE-
FITS.—The amount of qualified expenses otherwise 
taken into account under paragraph (1) with respect 
to an individual shall be reduced by the sum of any 
amounts paid for the benefit of such individual for 
the taxable year which are— 
‘‘(A) taken into account under section 21 
or 213, or 
‘‘(B) excluded from gross income under 
section 129, 223(f), or 529A(c)(1)(B). 
‘‘(3) GOODS, SERVICES, AND SUPPORTS.—For 
purposes of paragraph (1), goods, services, and sup-
ports (as defined by the Secretary) shall include— 
‘‘(A) human assistance, supervision, cuing 
and standby assistance, 
‘‘(B) assistive technologies and devices (in-
cluding remote health monitoring), 
‘‘(C) environmental modifications (includ-
ing home modifications), 
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‘‘(D) health maintenance tasks (such as 
medication management), 
‘‘(E) information, 
‘‘(F) transportation of the qualified care 
recipient, 
‘‘(G) non-health items (such as inconti-
nence supplies), and 
‘‘(H) coordination of and services for peo-
ple who live in their own home, a residential 
setting, or a nursing facility, as well as the cost 
of care in these or other locations. 
‘‘(4) QUALIFIED
EXPENSES
FOR
ELIGIBLE 
CAREGIVERS.—For purposes of paragraph (1), the 
following shall be treated as qualified expenses if 
paid or incurred by an eligible caregiver: 
‘‘(A) Expenditures for respite care for a 
qualified care recipient. 
‘‘(B) Expenditures for counseling, support 
groups, or training relating to caring for a 
qualified care recipient. 
‘‘(C) Lost wages for unpaid time off due to 
caring for a qualified care recipient as verified 
by an employer. 
‘‘(D) Travel costs of the eligible caregiver 
related to caring for a qualified care recipient. 
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‘‘(E) Expenditures for technologies, as de-
termined by the Secretary, that assist an eligi-
ble caregiver in providing care for a qualified 
care recipient. 
‘‘(5) HUMAN ASSISTANCE.—The term ‘human 
assistance’ includes the costs of a direct care worker. 
‘‘(6) DOCUMENTATION.—An expense shall not 
be taken into account under this section unless the 
eligible caregiver substantiates such expense under 
such regulations or guidance as the Secretary shall 
provide. 
‘‘(7) MILEAGE RATE.—For purposes of this sec-
tion, the mileage rate for the use of a passenger 
automobile shall be the standard mileage rate used 
to calculate the deductible costs of operating an 
automobile for medical purposes. Such rate may be 
used in lieu of actual automobile-related travel ex-
penses. 
‘‘(8) COORDINATION WITH ABLE ACCOUNTS.— 
Qualified expenses for a taxable year shall not in-
clude contributions to an ABLE account (as defined 
in section 529A). 
‘‘(f) PHASE OUT BASED ON ADJUSTED GROSS IN-
COME.—For purposes of this section— 
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‘‘(1) IN GENERAL.—The amount of the credit 
allowable under subsection (a) shall be reduced (but 
not below zero) by $100 for each $1,000 (or fraction 
thereof) by which the taxpayer’s modified adjusted 
gross income exceeds the threshold amount. 
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.— 
The term ‘modified adjusted gross income’ means 
adjusted gross income increased by any amount ex-
cluded from gross income under section 911, 931, or 
933. 
‘‘(3) THRESHOLD AMOUNT.—The term ‘thresh-
old amount’ means— 
‘‘(A) $150,000 in the case of a joint re-
turn, and 
‘‘(B) $75,000 in any other case. 
‘‘(4) INDEXING.—In the case of any taxable 
year beginning in a calendar year after 2026, each 
dollar amount contained in paragraph (3) shall be 
increased by an amount equal to the product of— 
‘‘(A) such dollar amount, and 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2025’ for 
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‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(5) ROUNDING RULE.—If any increase deter-
mined under paragraph (4) is not a multiple of $50, 
such increase shall be rounded to the next lowest 
multiple of $50. 
‘‘(g) IDENTIFICATION REQUIREMENTS.—No credit 
shall be allowed under this section to a taxpayer with re-
spect to any qualified care recipient unless the taxpayer 
includes the name and taxpayer identification number of 
such individual, and the identification number of the li-
censed health care practitioner certifying such individual, 
on the return of tax for the taxable year.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part IV of subchapter A of chapter 1 
is amended by inserting after the item relating to section 
25E the following new item: 
‘‘Sec. 25F. Working family caregivers.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 32004. LICENSED FAMILY CHILD CARE CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
36D the following new section: 
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‘‘SEC. 36E. LICENSED FAMILY CHILD CARE CREDIT. 
‘‘(a) IN GENERAL.—In the case of a qualified tax-
payer, there shall be allowed as a credit against the tax 
imposed by this subtitle for any taxable year an amount 
equal to so much of the qualified child care startup ex-
penses of the taxpayer for such taxable year or for the 
preceding taxable year as do not exceed $5,000. 
‘‘(b) QUALIFIED TAXPAYER.—For purposes of this 
section, the term ‘qualified taxpayer’ means, with respect 
to a taxable year, a taxpayer that operates a qualified fam-
ily child care provider. 
‘‘(c) QUALIFIED FAMILY CHILD CARE PROVIDER.— 
For purposes of this section, the term ‘qualified family 
child care provider’ means a family child care provider 
that, with respect to a taxable year— 
‘‘(1) provides child care services for compensa-
tion that, as of the last day of such taxable year, is 
licensed or registered under State law and satisfies 
State and local requirements applicable to the child 
care services it provides, 
‘‘(2) primarily provides child care at the tax-
payer’s primary residence, and 
‘‘(3) provided child care services to not less 
than 2 children (excluding children of such taxpayer) 
for a significant portion of such taxable year. 
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‘‘(d) QUALIFIED
CHILD
CARE
STARTUP
EX-
PENSES.—For purposes of this section, the term ‘qualified 
child care startup expenses’ means amounts paid or in-
curred for any of the following in order to establish and 
operate a qualified family child care provider: 
‘‘(1) Child care licensing fees. 
‘‘(2) Child care supplies including diapers, food, 
toys, and learning materials. 
‘‘(3) Liability insurance. 
‘‘(4) Fencing and installation of such fencing. 
‘‘(5) Outdoor playground equipment and instal-
lation of such equipment. 
‘‘(6) Furniture necessary to provide child care. 
‘‘(7) Salary of an employee other than the tax-
payer. 
‘‘(8) Printer and computers. 
‘‘(9) Professional training required as a condi-
tion of State licensure or registration. 
‘‘(10) Remediation or renovation of the tax-
payer’s primary residence required as a condition of 
State licensure or registration. 
‘‘(e) LIMITATIONS.—No credit shall be allowed under 
subsection (a) to any taxpayer to whom a credit was al-
lowed under such subsection in any other taxable year. 
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‘‘(f) DENIAL OF DOUBLE BENEFIT.—No credit shall 
be allowed under subsection (a) for any expense for which 
a deduction or credit is allowed under any other provision 
of this chapter. 
‘‘(g) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out the purposes of this section, includ-
ing regulations relating to such information reporting and 
coordination with state and local licensing or registration 
entities as the Secretary determines appropriate. 
‘‘(h) SUNSET.—No credit shall be allowed under sub-
section (a) for any taxable year beginning after the date 
that is 7 years after the date of the enactment of this 
section.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A), as amended by the 
preceding provisions of this Act, is amended by in-
serting ‘‘36E,’’ after ‘‘36D,’’. 
(2) Section 1324(b)(2) of title 31, United 
States Code, as amended by the preceding provisions 
of this Act, is amended by inserting ‘‘36E,’’ after 
‘‘36D,’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart C of part IV of subchapter A of chapter 1, 
as amended by the preceding provisions of this Act, is 
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365 
amended by inserting after the item relating to section 
36B the following new item: 
‘‘Sec. 36E. Licensed family child care credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
the date of the enactment of this Act. 
Subtitle C—Ensuring Affordable 
Adoptions 
SEC. 33001. REFUNDABLE ADOPTION TAX CREDIT. 
(a) CREDIT MADE REFUNDABLE.— 
(1) CREDIT MOVED TO SUBPART RELATING TO 
REFUNDABLE
CREDITS.—The 
Internal 
Revenue 
Code of 1986, as amended by the preceding provi-
sions of this Act, is amended— 
(A) by redesignating section 23 as section 
36F, and 
(B) by moving section 36F (as so redesig-
nated) from subpart A of part IV of subchapter 
A of chapter 1 to the location immediately be-
fore section 37 in subpart C of part IV of sub-
chapter A of chapter 1. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 25(e)(1)(C) is amended by 
striking ‘‘sections 23 and 25D’’ and inserting 
‘‘section 25D’’. 
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(B) Section 36E, as so redesignated, is 
amended— 
(i) in subsection (b)(2)(A), by striking 
‘‘(determined without regard to subsection 
(c))’’, 
(ii) by striking subsection (c), and 
(iii) by redesignating subsections (d) 
through (i) as subsections (c) through (h), 
respectively. 
(C) Section 137 is amended— 
(i) in subsection (d), by striking ‘‘sec-
tion 
23(d)’’ 
and 
inserting 
‘‘section 
36F(c)’’, and 
(ii) in subsection (e), by striking ‘‘sub-
sections (e), (f), and (g) of section 23’’ and 
inserting ‘‘subsections (d), (e), and (f) of 
section 36F’’. 
(D) Section 1016(a)(26) is amended by 
striking ‘‘23(g)’’ and inserting ‘‘36F(f)’’. 
(E) Section 6211(b)(4)(A), as amended by 
the preceding provisions of this Act, is amended 
by inserting ‘‘36F,’’ after ‘‘36E,’’. 
(F) The table of sections for subpart A of 
part IV of subchapter A of chapter 1 is amend-
ed by striking the item relating to section 23. 
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367 
(G) Paragraph (2) of section 1324(b) of 
title 31, United States Code, as amended by the 
preceding provisions of this Act, is amended by 
inserting ‘‘36F,’’ after ‘‘36E,’’. 
(H) Paragraph (33) of section 471(a) of 
the Social Security Act (42 U.S.C. 671(a)) is 
amended by striking ‘‘section 23’’ and inserting 
‘‘section 36F’’. 
(I) The table of sections for subpart C of 
part IV of subchapter A of chapter 1, as 
amended by the preceding provisions of this 
Act, is amended by inserting after the item re-
lating to section 36E the following new item: 
‘‘Sec. 36F. Adoption expenses.’’. 
(b) THIRD-PARTY AFFIDAVITS.—Section 36F(h), as 
redesignated and moved by subsection (a), is amended— 
(1) by striking ‘‘such regulations’’ and inserting 
‘‘such regulations and guidance’’, 
(2) by striking ‘‘including regulations which 
treat’’ and inserting ‘‘including regulations and 
guidance which— 
‘‘(1) treat’’, 
(3) by striking the period at the end and insert-
ing ‘‘, and’’, and 
(4) by adding at the end the following: 
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‘‘(2) provide for a standardized third-party affi-
davit for purposes of verifying a legal adoption— 
‘‘(A) of a type with respect to which quali-
fied adoption expenses may be paid or incurred, 
or 
‘‘(B) involving a child with special needs 
for purposes of subsection (a)(3).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
(d) TRANSITIONAL RULE TO TREAT CARRYFORWARD 
AS REFUNDABLE CREDIT.—In the case of any excess de-
scribed in section 23(c) of the Internal Revenue Code of 
1986 with respect to any taxpayer for the taxable year 
which precedes the first taxable year to which the amend-
ments made by this section apply, such excess shall be 
added to the credit allowable under section 36F(a) of such 
Code with respect to such taxpayer for such first taxable 
year. 
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369 
TITLE IV—EDUCATION AND 
WORKFORCE TRAINING 
Subtitle A—Ensuring Affordable 
Higher Education 
SEC. 41001. AMERICAN OPPORTUNITY CREDIT EXPANDED 
TO 6 YEARS, MADE TEMPORARILY FULLY RE-
FUNDABLE. 
(a) IN GENERAL.—Section 25A(i) is amended— 
(1) in subsection (b)(2)— 
(A) in subparagraph (A)— 
(i) in the heading, by striking ‘‘4 TAX-
ABLE YEARS’’ and inserting ‘‘6 TAXABLE 
YEARS’’, and 
(ii) by striking ‘‘4 prior taxable years’’ 
and inserting ‘‘6 taxable years’’, and 
(B) in subparagraph (C)— 
(i) in the heading, by striking ‘‘FIRST 
4 YEARS’’ and inserting ‘‘FIRST 6 YEARS’’, 
and 
(ii) by striking ‘‘the first 4 years’’ and 
inserting ‘‘the first 6 years’’, and 
(2) by redesignating subsection (j) as sub-
section (k) and by inserting after subsection (i) the 
following: 
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‘‘(j) AMERICAN OPPORTUNITY TAX CREDIT MADE 
FULLY REFUNDABLE FOR 2026.—In the case of a taxable 
year beginning after December 31, 2025, and before Jan-
uary 1, 2027, subsection (i) shall be applied by sub-
stituting ‘100 percent’ for ‘forty percent’.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2025. 
(c) OUTREACH CAMPAIGN.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury (or the Secretary’s delegate) shall conduct an 
outreach campaign to— 
(A) provide information to the public re-
garding the expansion of the American Oppor-
tunity Credit under section 25A of the Internal 
Revenue Code of 1986, as amended by this Act, 
and 
(B) assist individuals with claiming such 
credit. 
(2) METHODS.—With respect to the outreach 
campaign described in paragraph (a), the Secretary 
shall— 
(A) provide relevant information on the 
public website of the Internal Revenue Service, 
and 
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(B) send communications via direct mail-
ing and electronic mail to individuals who have 
been identified as eligible for such credit for the 
taxable year. 
SEC. 41002. EXPANSION OF PELL GRANT EXCLUSION FROM 
GROSS INCOME. 
(a) IN GENERAL.—Section 117(b)(1) is amended by 
striking ‘‘received by an individual’’ and all that follows 
and inserting ‘‘received by an individual— 
‘‘(A) as a scholarship or fellowship grant 
to the extent the individual establishes that, in 
accordance with the conditions of the grant, 
such amount was used for qualified tuition and 
related expenses, or 
‘‘(B) as a Federal Pell Grant under section 
401 of the Higher Education Act of 1965 (as 
in effect on the date of the enactment of this 
subparagraph).’’. 
(b) NO ADJUSTMENT UNDER AMERICAN OPPOR-
TUNITY
AND LIFETIME LEARNING CREDITS.—Section 
25A(g)(2)(A) is amended by striking ‘‘a qualified scholar-
ship which’’ and inserting ‘‘a qualified scholarship which 
is described in section 117(b)(1)(A) and which’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 41003. EXPANSION OF AMERICAN OPPORTUNITY AND 
LIFETIME LEARNING CREDITS. 
(a) IN GENERAL.—Section 25A is amended— 
(1) in subsection (f)(1)— 
(A) in subparagraph (A), by striking ‘‘tui-
tion and fees’’ and inserting ‘‘tuition, fees, com-
puter or peripheral equipment, child and de-
pendent care expenses, and course materials’’, 
(B) by striking subparagraph (D), and 
(C) by adding at the end the following new 
subparagraphs: 
‘‘(D) CHILD AND DEPENDENT CARE EX-
PENSES.—For purposes of this paragraph— 
‘‘(i) IN
GENERAL.—The term ‘child 
and dependent care expenses’ means 
amounts paid for the following expenses, 
but only if such expenses are incurred to 
enable the taxpayer to be enrolled in an el-
igible educational institution for any period 
for which there are 1 or more qualifying 
individuals with respect to the taxpayer: 
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‘‘(I) expenses for household serv-
ices, and 
‘‘(II) expenses for the care of a 
qualifying individual. 
Such term shall not include any amount 
paid for services outside the taxpayer’s 
household at a camp where the qualifying 
individual stays overnight. 
‘‘(ii) QUALIFYING
INDIVIDUAL.—The 
term ‘qualifying individual’ has the mean-
ing given such term in section 21(b)(1). 
‘‘(iii) EXCEPTION, DEPENDENT CARE 
CENTERS.—Rules similar to the rules of 
subparagraphs (B), (C), and (D) of section 
21(b)(2) shall apply, except the term ‘child 
and dependent care expenses’ shall be sub-
stituted for the term ‘employment-related 
expenses’ each place it appears in such 
subparagraphs. 
‘‘(E) CHILD AND DEPENDENT CARE EX-
PENSES
ONLY
QUALIFIED
EXPENSES
WHEN 
CLAIMED
BY
ELIGIBLE
STUDENT.—Amounts 
paid for an expense described in subparagraph 
(E) may not be taken into account under this 
paragraph for a taxable year unless required for 
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the enrollment or attendance of an individual 
described in subparagraph (A)(i) or subpara-
graph (A)(ii). 
‘‘(F) COMPUTER OR PERIPHERAL EQUIP-
MENT.— 
‘‘(i) DEFINED.—For purposes of this 
paragraph, the term ‘computer or periph-
eral equipment’ means expenses for the 
purchase of computer or peripheral equip-
ment (as defined in section 168(i)(2)(B), 
computer software (as defined in section 
197(e)(3)(B))), or internet access and re-
lated services, if such equipment, software, 
or services are to be used primarily by the 
individual during any of the years the indi-
vidual is enrolled at an eligible educational 
institution. 
‘‘(ii) DOLLAR
LIMIT
ON
AMOUNT 
CREDITABLE.—The 
aggregate 
of 
the 
amounts paid or expenses incurred for 
computer or peripheral equipment which 
may be taken into account under this para-
graph for a taxable year by the taxpayer 
shall not exceed $1,000.’’, and 
(2) in subsection (g)(5)— 
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375 
(A) in the heading, by adding ‘‘OR CRED-
IT’’ at the end, and 
(B) by inserting ‘‘or credit’’ after ‘‘a de-
duction’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 41004. ELIMINATION OF DENIAL OF AMERICAN OP-
PORTUNITY 
TAX 
CREDIT 
FOR 
STUDENTS 
CONVICTED OF A FELONY DRUG OFFENSE. 
(a) IN GENERAL.—Section 25A(b)(2) is amended by 
striking subparagraph (D). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 41005. MODIFICATION OF TREATMENT OF STUDENT 
LOAN FORGIVENESS. 
(a) IN GENERAL.—Section 108(f) is amended— 
(1) by amending paragraph (1) to read as fol-
lows: 
‘‘(1) IN
GENERAL.—In the case of an indi-
vidual, gross income does not include any amount 
which (but for this subsection) would be includible in 
gross income by reasons of the discharge (in whole 
or in part) of— 
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‘‘(A) any loan provided expressly for post-
secondary educational expenses, regardless of 
whether provided through the educational insti-
tution or directly to the borrower, if such loan 
was made, insured, or guaranteed by— 
‘‘(i) the United States, or an instru-
mentality or agency thereof, 
‘‘(ii) a State, territory, or possession 
of the United States, or the District of Co-
lumbia, or any political subdivision thereof, 
or 
‘‘(iii) any institution of higher edu-
cation, 
‘‘(B) any private education loan (as de-
fined in section 140(a)(7) of the Truth in Lend-
ing Act), 
‘‘(C) any loan made by any educational or-
ganization described in section 170(b)(1)(A)(ii) 
if such loan is made— 
‘‘(i) pursuant to an agreement with 
any entity described in subparagraph (A) 
or any private education lender (as defined 
in section 140(a) of the Truth in Lending 
Act) under which the funds from which the 
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loan was made were provided to such edu-
cational organization, or 
‘‘(ii) pursuant to a program of such 
educational organization which is designed 
to encourage its students to serve in occu-
pations with unmet needs or in areas with 
unmet needs and under which the services 
provided by the students (or former stu-
dents) are for or under the direction of a 
governmental unit or an organization de-
scribed in section 501(c)(3) and exempt 
from tax under section 501(a), or 
‘‘(D) any loan made by an educational or-
ganization described in section 170(b)(1)(A)(ii) 
or by an organization exempt from tax under 
section 501(a) to refinance a loan to an indi-
vidual to assist the individual in attending any 
such educational organization but only if the re-
financing loan is pursuant to a program of the 
refinancing organization which is designed as 
described in subparagraph (C)(ii).’’, 
(2) by striking paragraphs (2) and (5), 
(3) by redesignating paragraphs (3) and (4) as 
paragraphs (2) and (3), respectively, and 
(4) in paragraph (2), as so redesignated, by— 
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(A) striking ‘‘made by an organization de-
scribed in paragraph (2)(D)’’ and inserting 
‘‘made by an organization described in para-
graph (1)(C) or made by a private education 
lender (as defined in section 140(a)(7) of the 
Truth in Lending Act)’’, and 
(B) inserting ‘‘or for such private edu-
cation lender’’ after ‘‘either such organization’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to discharges of loans after Decem-
ber 31, 2025. 
SEC. 41006. STUDENT LOAN INTEREST DEDUCTION LIMITA-
TION 
APPLIED 
SEPARATELY 
TO 
EACH 
SPOUSE. 
(a) IN GENERAL.—Section 221(b)(1) is amended to 
read as follows: 
‘‘(1) IN GENERAL.—The interest taken into ac-
count with respect to a taxpayer for a taxable year 
under subsection (a) for indebtedness incurred by an 
individual shall not exceed $2,500.’’. 
(b) CONFORMING AMENDMENTS.—Section 221 is 
amended— 
(1) in subsection (b), by striking the heading 
and inserting ‘‘DOLLAR LIMITATIONS’’, and 
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(2) by amending subsection (e) to read as fol-
lows: 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowed under this section for any amount for 
which a deduction is allowable under any other provision 
of this chapter.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
Subtitle B—Supporting Our 
Workforce 
SEC. 42001. EDUCATOR EXPENSE DEDUCTION TO INCLUDE 
EARLY CHILDHOOD EDUCATORS. 
(a) IN GENERAL.—Section 62 is amended— 
(1) in subsection (a)(2)(D), by striking the 
heading and inserting ‘‘CERTAIN
EXPENSES
OF 
EARLY CHILDHOOD, ELEMENTARY, AND SECONDARY 
SCHOOL TEACHERS.’’; 
(2) in subsection (d)(1)(A), by striking ‘‘kinder-
garten through grade 12 teacher’’ and inserting, 
‘‘early childhood educator, kindergarten through 
grade 12 teacher’’; and 
(3) in subsection (d)(1)(B), by striking ‘‘ele-
mentary education or secondary education (kinder-
garten through grade 12)’’ and inserting, ‘‘early 
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380 
childhood education, elementary education, or sec-
ondary education (pre-kindergarten through grade 
12)’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenses incurred in taxable 
years beginning after December 31, 2025. 
SEC. 42002. ALLOWANCE OF DEDUCTION FOR CERTAIN EX-
PENSES OF THE TRADE OR BUSINESS OF 
BEING AN EMPLOYEE. 
(a) ABOVE-THE-LINE DEDUCTION FOR UNION DUES 
AND EXPENSES.—Section 62(a)(1) is amended by adding 
at the end the following new sentence: ‘‘The limitation 
under the preceding sentence shall not apply to deductions 
which are attributable to a trade or business consisting 
of the performance of services by the taxpayer as an em-
ployee if such deductions are for union dues and ex-
penses.’’. 
(b) ALLOWANCE OF MISCELLANEOUS ITEMIZED DE-
DUCTION
FOR OTHER EXPENSES
OF
THE TRADE
OR 
BUSINESS OF BEING AN EMPLOYEE.—Section 67(g) is 
amended— 
(1) by striking ‘‘2025.—Notwithstanding sub-
section (a),’’ and inserting ‘‘2025.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(a), except as provided in paragraph (2),’’; and 
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(2) by adding at the end the following: 
‘‘(2) EXCEPTION
FOR
EXPENSES
OF
THE 
TRADE OR BUSINESS OF BEING AN EMPLOYEE.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to miscellaneous itemized deductions 
for any taxable year which are itemized deduc-
tions attributable to a trade or business carried 
on by the taxpayer which consists of the per-
formance of services by the taxpayer as an em-
ployee. 
‘‘(B) APPLICATION OF 2-PERCENT TEST.— 
In applying subsection (a) for any taxable year 
to which this paragraph applies, only the 
itemized deductions described in subparagraph 
(A) shall be taken into account as miscellaneous 
itemized deductions.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 42003. MODIFICATION OF DEDUCTION FOR CASH TIPS. 
(a) MADE PERMANENT.—Section 224 is amended by 
striking subsection (h). 
(b) APPLICATION OF LIMITATION ON INDIVIDUAL 
BASIS.—Section 224(b)(1) is amended by inserting ‘‘to an 
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individual’’ after ‘‘amount allowed as a deduction under 
this section’’. 
(c) TREATMENT OF AUTOMATIC GRATUITIES.—Sec-
tion 224(d) is amended by adding at the end the following 
new paragraph: 
‘‘(4) TREATMENT OF CERTAIN AUTOMATIC GRA-
TUITIES.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual engaged in an occupation in hospitality, 
food and beverage service, or cosmetology, the 
term ‘qualified tips’ shall include automatic gra-
tuities. 
‘‘(B) AUTOMATIC
GRATUITY.—For pur-
poses of this paragraph, the term ‘automatic 
gratuity’ means, with respect to an individual, 
any amount which— 
‘‘(i) would be a qualified tip with re-
spect to the individual but for paragraph 
(2)(A), and 
‘‘(ii) is a mandatory or suggested 
amount paid pursuant to a uniform policy 
of the employer, under which such entire 
amount is received by the individual or, 
under State or local law, is pooled and re-
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ceived only by employees of the employer 
under a tip-sharing arrangement.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 42004. DEDUCTION FOR CERTAIN OVERTIME COM-
PENSATION. 
(a) IN GENERAL.—Section 225(c)(1) is amended to 
read as follows: 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified overtime compensation’ 
means— 
‘‘(A) any overtime compensation paid to an 
individual required under section 7 of the Fair 
Labor Standards Act of 1938 that is in excess 
of the regular rate (as used in such section) at 
which such individual is employed, or 
‘‘(B) any compensation paid to an indi-
vidual that is in excess of the regular rate at 
which such individual is employed if— 
‘‘(i) such compensation is paid for 
work for a single employer pursuant to an 
agreement between the employee (or labor 
organization representing such employee) 
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and employer entered into before the per-
formance of the work, and 
‘‘(ii) either— 
‘‘(I) such work is in excess of a 
standard number of hours of such 
work for a specified period of time, 
and such agreement specifies that 
such standard number of hours for a 
specified period of time is not less 
than 40 hours for a 7-day work pe-
riod, or 
‘‘(II) if the employee (including 
any crewmember or flight crew-
member, or rail operating craft em-
ployee) and employer referred to in 
clause (i) are both covered by the 
Railway Labor Act, such work is be-
yond scheduled or anticipated hours 
on duty or for hours on duty that ex-
ceed a maximum number of hours 
with respect to a specified period of 
time (as determined pursuant to such 
agreement).’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 42005. ABOVE-THE-LINE DEDUCTION OF EXPENSES OF 
PERFORMING ARTISTS. 
(a) IN GENERAL.—Section 62(a)(2)(B) is amend-
ed— 
(1) by striking ‘‘PERFORMING
ARTISTS.—The 
deductions’’ and inserting the following: ‘‘PER-
FORMING ARTISTS.— 
‘‘(i) IN GENERAL.—The deductions’’, 
and 
(2) by adding at the end the following new 
clauses: 
‘‘(ii) PHASEOUT.—The amount of ex-
penses taken into account under clause (i) 
shall be reduced (but not below zero) by 10 
percentage points for each $2,000 ($4,000 
in the case of a joint return), or fraction 
thereof, by which the taxpayer’s gross in-
come 
for 
the 
taxable 
year 
exceeds 
$100,000 (200 percent of such amount in 
the case of a joint return). 
‘‘(iii) 
COST-OF-LIVING
ADJUST-
MENT.—In the case of any taxable year be-
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386 
ginning in a calendar year after 2026, the 
$100,000 amount under clause (ii) shall be 
increased by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for the calendar year in which the tax-
able year begins, determined by sub-
stituting ‘calendar year 2025’ for ‘cal-
endar year 2016’ in subparagraph 
(A)(ii) thereof. 
If any amount after adjustment under the 
preceding sentence is not a multiple of 
$1,000, such amount shall be rounded to 
the nearest multiple of $1,000.’’. 
(b) CLARIFICATION REGARDING COMMISSION PAID 
TO PERFORMING ARTIST’S MANAGER OR AGENT.—Sec-
tion 62(a)(2)(B)(i), as amended by subsection (a), is 
amended by inserting before the period at the end the fol-
lowing: ‘‘, including any commission paid to the per-
forming artist’s manager or agent’’. 
(c) INCREASE IN THRESHOLD FOR DETERMINING 
NOMINAL EMPLOYERS.—Section 62(b)(2) is amended— 
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(1) by striking ‘‘An individual’’ and inserting 
the following: 
‘‘(A) IN GENERAL.—An individual’’, 
(2) by striking ‘‘$200’’ and inserting ‘‘$500’’, 
and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) COST-OF-LIVING
ADJUSTMENT.—In 
the case of any taxable year beginning in a cal-
endar year after 2026, the $500 amount under 
subparagraph (A) shall be increased by an 
amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2025’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
If any amount after adjustment under the pre-
ceding sentence is not a multiple of $50, such 
amount shall be rounded to the nearest multiple 
of $50.’’. 
(d) CONFORMING AMENDMENTS.— 
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(1) Section 62(a)(2)(B)(i), as amended by the 
preceding provisions of this Act, is amended by 
striking ‘‘by him’’ and inserting ‘‘by the performing 
artist’’. 
(2) Section 62(b)(1) is amended by inserting 
‘‘and’’ at the end of subparagraph (A), by striking 
‘‘, and’’ at the end of subparagraph (B) and insert-
ing a period, and by striking subparagraph (C). 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 42006. PERMANENT EXTENSION OF EARNED INCOME 
CREDIT RULES FOR INDIVIDUALS WITHOUT 
QUALIFYING CHILDREN. 
(a) DECREASE IN MINIMUM AGE FOR CREDIT.— 
(1) IN
GENERAL.—Subclause (II) of section 
32(c)(1)(A)(ii) is amended by striking ‘‘age 25’’ and 
inserting ‘‘the applicable minimum age’’. 
(2) APPLICABLE
MINIMUM
AGE.—Paragraph 
(1) of section 32(c) is amended by adding at the end 
the following new subparagraph: 
‘‘(F) APPLICABLE
MINIMUM
AGE.—For 
purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘applica-
ble minimum age’ means— 
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‘‘(I) except as otherwise provided 
in this clause, age 19, 
‘‘(II) in the case of a student (as 
defined in section 152(f)(2)), other 
than a qualified former foster youth 
or a qualified homeless youth, age 24, 
and 
‘‘(III) in the case of a qualified 
former foster youth or a qualified 
homeless youth, age 18. 
‘‘(ii) QUALIFIED
FORMER
FOSTER 
YOUTH.—For purposes of this subpara-
graph, the term ‘qualified former foster 
youth’ means an individual who— 
‘‘(I) on or after the date that 
such individual attained age 14, was 
in foster care provided under the su-
pervision or administration of an enti-
ty administering (or eligible to admin-
ister) a plan under part B or part E 
of title IV of the Social Security Act 
(without regard to whether Federal 
assistance was provided with respect 
to such child under such part E), and 
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‘‘(II) provides (in such manner 
as the Secretary may provide) consent 
for entities which administer a plan 
under part B or part E of title IV of 
the Social Security Act to disclose to 
the Secretary information related to 
the status of such individual as a 
qualified former foster youth. 
‘‘(iii) 
QUALIFIED
HOMELESS 
YOUTH.—For purposes of this subpara-
graph, the term ‘qualified homeless youth’ 
means, with respect to any taxable year, 
an individual who certifies, in a manner as 
provided by the Secretary, that such indi-
vidual is either an unaccompanied youth 
who is a homeless child or youth, or is un-
accompanied, at risk of homelessness, and 
self-supporting.’’. 
(b) ELIMINATION OF MAXIMUM AGE FOR CREDIT.— 
Subclause (II) of section 32(c)(1)(A)(ii) is amended by 
striking ‘‘but not attained age 65’’. 
(c) INCREASE IN CREDIT AND PHASEOUT PERCENT-
AGES.—The table contained in paragraph (1) of section 
32(b) is amended by striking ‘‘7.65’’ each place it appears 
and inserting ‘‘15.3’’. 
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(d) INCREASE IN EARNED INCOME AND PHASEOUT 
AMOUNTS.—The table contained in subparagraph (A) of 
section 32(b)(2) is amended— 
(1) 
by 
striking 
‘‘$4,220’’ 
and 
inserting 
‘‘$9,820’’, and 
(2) 
by 
striking 
‘‘$5,280’’ 
and 
inserting 
‘‘$11,610’’. 
(e) INFLATION ADJUSTMENTS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
32(j) is amended to read as follows: 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after— 
‘‘(A) 2021, in the case of the dollar 
amount in subsection (i)(1), 
‘‘(B) 2026, in the case of the dollar 
amounts in the third row of the table in sub-
section (b)(2)(A), and 
‘‘(C) 2015, in any other case, 
each of the dollar amounts in subsections (b)(2) and 
(i)(1) shall be increased by an amount equal to the 
inflation amount.’’. 
(2) INFLATION AMOUNT.—Subsection (j) of sec-
tion 32 is amended by adding at the end the fol-
lowing new paragraph: 
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‘‘(3) INFLATION
AMOUNT.—For purposes of 
paragraph (1), the inflation amount with respect to 
any dollar amount for any taxable year is the 
amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the percentage (if any) by which— 
‘‘(i) the CPI (as defined in section 
1(f)(4)) for the calendar year preceding 
the year in which the taxable year begins, 
exceeds 
‘‘(ii) the CPI (as so defined) for— 
‘‘(I) in the case of amounts in 
the third row of the table in sub-
section (b)(2)(A), 2025, 
‘‘(II) in the case of any other 
amount in subsection (b)(2)(A), 1995, 
‘‘(III) in the case of the $5,000 
amount in subsection (b)(2)(B), 2008, 
and 
‘‘(IV) in the case of the $10,000 
amount in subsection (i)(1), 2020.’’. 
(f) CONFORMING
AMENDMENT.—Section 32 is 
amended by striking subsection (n). 
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(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 42007. APPLICATION OF EARNED INCOME CREDIT TO 
POSSESSIONS OF THE UNITED STATES. 
(a) PUERTO RICO.—Subparagraph (B) of section 
7530(a)(1) is amended by striking ‘‘in the case of calendar 
years 2021 through 2025,’’. 
(b) POSSESSIONS WITH MIRROR CODE TAX SYS-
TEMS.—Subparagraph (B) of section 7530(b)(1) is 
amended by striking ‘‘in the case of calendar years 2021 
through 2025,’’. 
(c) AMERICAN SAMOA.—Subparagraph (B) of section 
7530(c)(1) is amended by striking ‘‘in the case of calendar 
years 2021 through 2025,’’. 
SEC. 42008. ELECTION TO USE PRIOR YEAR EARNED IN-
COME FOR EARNED INCOME TAX CREDIT. 
(a) IN GENERAL.—Paragraph (2) of section 32(c) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(C) ELECTION
TO
USE
PRIOR
YEAR 
EARNED INCOME.— 
‘‘(i) IN GENERAL.—If the earned in-
come of the taxpayer for any taxable year 
is less than the earned income of the tax-
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394 
payer for the preceding taxable year, the 
credit allowed under subsection (a) may, at 
the election of the taxpayer, be determined 
by substituting— 
‘‘(I) such earned income for such 
preceding taxable year, for 
‘‘(II) such earned income for the 
taxable year for which such credit is 
being determined. 
‘‘(ii) APPLICATION
TO
JOINT
RE-
TURNS.—For purposes of clause (i), in the 
case of a joint return, the earned income 
of the taxpayer for the preceding taxable 
year shall be the sum of the earned income 
of each spouse for such taxable year. 
‘‘(iii) SPECIAL RULES.— 
‘‘(I) ERRORS TREATED AS MATH-
EMATICAL ERRORS.—For purposes of 
section 6213, an incorrect use on a re-
turn of earned income pursuant to 
clause (i) shall be treated as a mathe-
matical or clerical error. 
‘‘(II) NO
EFFECT
ON
DETER-
MINATION OF GROSS INCOME, ETC.— 
Except as otherwise provided in this 
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395 
subparagraph, this title shall be ap-
plied without regard to any substi-
tution under clause (i).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
TITLE V—HEALTHCARE 
SEC. 50001. INCREASE IN ELIGIBILITY FOR HEALTH INSUR-
ANCE PREMIUM ASSISTANCE TAX CREDIT. 
(a) IN GENERAL.—Subparagraph (A) of section 
36B(c)(1) is amended by striking ‘‘but does not exceed 
400 percent’’. 
(b) APPLICABLE PERCENTAGES.— 
(1) IN GENERAL.—Subparagraph (A) of section 
36B(b)(3) is amended to read as follows: 
‘‘(A) APPLICABLE PERCENTAGE.—The ap-
plicable percentage for any taxable year shall be 
the percentage such that the applicable percent-
age for any taxpayer whose household income is 
within an income tier specified in the following 
table shall increase, on a sliding scale in a lin-
ear manner, from the initial premium percent-
age to the final premium percentage specified in 
such table for such income tier: 
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‘‘In the case of household income 
(expressed as a percent of poverty line) 
within the following income tier: 
The initial 
premium 
percentage 
is— 
The final 
premium 
percentage 
is— 
Up to 150 percent ..................................................
150 percent up to 200 percent ...............................
2.0
200 percent up to 250 percent ...............................
2.0 
4.0
250 percent up to 300 percent ...............................
4.0 
6.0
300 percent up to 400 percent ...............................
6.0 
8.5
400 percent and higher ..........................................
8.5 
8.5.’’. 
(2) CONFORMING AMENDMENTS RELATING TO 
AFFORDABILITY OF COVERAGE.— 
(A) Paragraph (1) of section 36B(c) is 
amended by striking subparagraph (E). 
(B) Subparagraph (C) of section 36B(c)(2) 
is amended by striking clause (iv). 
(C) Paragraph (4) of section 36B(c) is 
amended by striking subparagraph (F). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 50002. FILLING THE COVERAGE GAP. 
(a) ENSURING AFFORDABILITY OF COVERAGE FOR 
CERTAIN LOW-INCOME POPULATIONS.—Section 1402 of 
the Patient Protection and Affordable Care Act (42 
U.S.C. 18071) is amended— 
(1) in subsection (b)— 
(A) in paragraph (2), by inserting ‘‘(or, 
with respect to plan years 2026, 2027, and 
2028, whose household income does not exceed 
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397 
400 percent of the poverty line for a family of 
the size involved)’’ before the period; and 
(B) in the matter following paragraph (2), 
by adding at the end the following new sen-
tence: ‘‘In the case of an individual who is de-
termined at any point to have a household in-
come for 2025 that does not exceed 138 percent 
of the poverty line for a family of the size in-
volved, such individual shall, for each month 
during such year, be treated as having a house-
hold income equal to 100 percent for purposes 
of applying this section.’’; and 
(2) in subsection (c)— 
(A) in paragraph (1)(A), in the matter 
preceding clause (i), by inserting ‘‘, with respect 
to eligible insureds (other than, with respect to 
plan years 2026, 2027, and 2028, specified en-
rollees (as defined in paragraph (6)(C))),’’ after 
‘‘first be achieved’’; 
(B) in paragraph (2), in the matter pre-
ceding subparagraph (A), by inserting ‘‘with re-
spect to eligible insureds (other than, with re-
spect to plan years 2026, 2027, and 2028, spec-
ified enrollees)’’ after ‘‘under the plan’’; 
(C) in paragraph (3)— 
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(i) in subparagraph (A), by striking 
‘‘this subsection’’ and inserting ‘‘paragraph 
(1) or (2)’’; and 
(ii) in subparagraph (B), by striking 
‘‘this section’’ and inserting ‘‘paragraphs 
(1) and (2)’’; and 
(D) by adding at the end the following new 
paragraph: 
‘‘(6) SPECIAL RULE FOR SPECIFIED ENROLL-
EES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish procedures under which the issuer of 
a qualified health plan to which this section ap-
plies shall reduce cost-sharing under the plan 
with respect to months occurring during plan 
years 2026, 2027, and 2028 for enrollees who 
are specified enrollees (as defined in subpara-
graph (C)) in a manner sufficient to increase 
the plan’s share of the total allowed costs of 
benefits provided under the plan to 99 percent 
of such costs. 
‘‘(B) METHODS
FOR
REDUCING
COST 
SHARING.— 
‘‘(i) IN
GENERAL.—An issuer of a 
qualified health plan making reductions 
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