I 
112TH CONGRESS 
2D SESSION 
H. R. 4397 
To amend the Internal Revenue Code of 1986 to allow a deduction for 
expenses paid for household and dependent care services necessary for 
gainful employment and to increase, and make refundable, the credit 
for such expenses. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 18, 2012 
Mrs. MALONEY 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 allow a 
deduction for expenses paid for household and dependent 
care services necessary for gainful employment and to 
increase, and make refundable, the credit for such ex-
penses. 
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 ‘‘Child Care Afford-
ability Act of 2012’’. 
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SEC. 2. ALLOWANCE OF DEDUCTION FOR EXPENSES FOR 
HOUSEHOLD AND DEPENDENT CARE SERV-
ICES NECESSARY FOR GAINFUL EMPLOY-
MENT. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions for individuals) is amended 
by redesignating section 224 as section 225 and inserting 
after section 223 the following new section: 
‘‘SEC. 224. EXPENSES FOR HOUSEHOLD AND DEPENDENT 
CARE SERVICES NECESSARY FOR GAINFUL 
EMPLOYMENT. 
‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an 
individual for whom there are 1 or more qualifying individ-
uals with respect to such individual, there shall be allowed 
as a deduction an amount equal to so much of the employ-
ment-related expenses paid by such individual during the 
taxable year as do not exceed— 
‘‘(1) $13,000 if there is 1 qualifying individual 
with respect to the taxpayer for such taxable year, 
or 
‘‘(2) 200 percent of the dollar amount in effect 
under paragraph (1) for the taxable year if there are 
2 or more qualifying individuals with respect to the 
taxpayer for such taxable year. 
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‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) QUALIFYING
INDIVIDUAL; EMPLOYMENT- 
RELATED
EXPENSES.—The terms ‘qualifying indi-
vidual’ and ‘employment-related expenses’ shall have 
the respective meanings given such terms by section 
21(b). 
‘‘(2) DENIAL OF DOUBLE BENEFIT.— 
‘‘(A) COORDINATION
WITH
DEPENDENT 
CARE ASSISTANCE PROGRAM.—The amount of 
employment-related expenses otherwise taken 
into account under subsection (a) shall be re-
duced by the aggregate amount excludable from 
gross income under section 129 for the taxable 
year. 
‘‘(B) COORDINATION
WITH
CREDIT
FOR 
EMPLOYMENT-RELATED EXPENSES.—No deduc-
tion shall be allowed under subsection (a) for a 
taxable year with respect to the employment-re-
lated expenses of the taxpayer if the taxpayer 
elects to have section 21 apply for such taxable 
year. 
‘‘(3) SPECIAL
RULE
FOR
SPOUSE
WHO
IS
A 
STUDENT
OR
INCAPABLE
OF
CARING
FOR
HIM-
SELF.—In the case of a spouse who is a student or 
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a 
qualified 
individual 
described 
in 
section 
21(b)(1)(C), for purposes of paragraph (4), such 
spouse shall be deemed for each month during which 
such spouse is a full-time student at an educational 
institution, or is such a qualifying individual, to be 
gainfully employed and to have earned income of not 
less than— 
‘‘(A) 1⁄12 of the amount in effect under 
subsection (a)(1) if such subsection applies for 
the taxable year, or 
‘‘(B) 1⁄12 of the amount in effect under 
subsection (a)(2) if such subsection applies for 
the taxable year. 
In the case of any husband and wife, this paragraph 
shall apply with respect to only one spouse for any 
one month. 
‘‘(4) OTHER SPECIAL RULES.—Rules similar to 
the rules of subsections (d)(1) and (e) of section 21 
shall apply for purposes of this section. 
‘‘(c) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of a taxable 
year beginning after 2013, the dollar amount under 
subsection (a)(1) shall be increased by an amount 
equal to— 
‘‘(A) such dollar amount, multiplied by 
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‘‘(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 2012’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any amount as adjusted 
under subparagraph (A) is not a multiple of $100, 
such amount shall be rounded to the next lowest 
multiple of $100. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary to carry out the pur-
poses of this section.’’. 
(b) DEDUCTIBLE WHETHER
OR NOT TAXPAYER 
ITEMIZES.—Subsection (a) of section 62 of such Code (de-
fining adjusted gross income) is amended by inserting 
after paragraph (21) the following new paragraph: 
‘‘(22) EXPENSES
FOR
HOUSEHOLD
AND
DE-
PENDENT CARE SERVICES NECESSARY FOR GAINFUL 
EMPLOYMENT.—The deduction allowed by section 
224.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Subsection (e) of section 213 is amended by 
inserting ‘‘or deduction under section 224’’ after 
‘‘section 21’’. 
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(2) Paragraph (2) of section 6213(g) is amend-
ed— 
(A) by striking ‘‘or’’ in subparagraph (H) 
and inserting ‘‘, section 224 (relating to ex-
penses for household and dependent care serv-
ices necessary for gainful employment), or’’, 
and 
(B) by striking ‘‘or 6428’’ in subparagraph 
(L) and inserting ‘‘224, or 6428’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenses paid in taxable years 
beginning after the date of the enactment of this Act. 
SEC. 3. MODIFICATION OF CREDIT FOR EXPENSES FOR 
HOUSEHOLD AND DEPENDENT CARE SERV-
ICES NECESSARY FOR GAINFUL EMPLOY-
MENT. 
(a) IN GENERAL.— 
(1) INCREASE
IN
CREDIT
LIMITATION.—Sub-
section (c) of section 21 of the Internal Revenue 
Code of 1986 (relating to dollar limit on amount 
creditable) is amended— 
(A) by striking ‘‘$3,000’’ in paragraph (1) 
and inserting ‘‘$13,000’’, and 
(B) by striking ‘‘$6,000’’ in paragraph (2) 
and inserting ‘‘200 percent of the dollar 
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amount in effect under paragraph (1) for the 
taxable year’’. 
(2) INFLATION
ADJUSTMENT.—Section 21 of 
such Code is amended by redesignating subsection 
(f) as subsection (g) and inserting after subsection 
(e) the following new subsection: 
‘‘(f) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of a taxable 
year beginning after 2013, the dollar amount under 
subsection (a)(1) 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 the taxable year begins, deter-
mined by substituting ‘calendar year 2012’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any amount as adjusted 
under subparagraph (A) is not a multiple of $100, 
such amount shall be rounded to the next lowest 
multiple of $100.’’. 
(3) INCREASE
IN
DEEMED
EARNED
INCOME 
AMOUNTS.—Paragraph (2) of section 21(d) of such 
Code (relating to special rules for spouse who is a 
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student or incapable of caring for himself) is amend-
ed— 
(A) by striking ‘‘$250 if subsection (c)(1)’’ 
in subparagraph (A) and inserting ‘‘1⁄12 of the 
amount in effect under subsection (c)(1) if such 
subsection’’, and 
(B) by striking ‘‘$500 if subsection (c)(2)’’ 
in subparagraph (B) and inserting ‘‘1⁄12 of the 
amount in effect under subsection (c)(2) if such 
subsection’’. 
(4) INCREASES
IN
CREDIT
NOT
SUBJECT
TO 
EGTRRA
SUNSET.—Section 901 of the Economic 
Growth and Tax Relief Reconciliation Act of 2001 
shall not apply to the amendments made by section 
204 of such Act. 
(b) COORDINATION WITH DEDUCTION FOR EMPLOY-
MENT-RELATED EXPENSES.—Subsection (e) of section 21 
of such Code (relating to special rules) is amended by add-
ing at the end the following new paragraph: 
‘‘(11) ELECTION TO HAVE SECTION APPLY.— 
This section shall apply to any taxpayer for any tax-
able year only if such taxpayer elects (at such time 
and in such manner as the Secretary may by regula-
tions prescribe) to have this section apply for such 
taxable year.’’. 
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(c) CREDIT MADE REFUNDABLE.— 
(1) CREDIT MOVED TO SUBPART RELATING TO 
REFUNDABLE CREDITS.—Such Code is amended— 
(A) by redesignating section 21, as amend-
ed by this section, as section 36B, and 
(B) by moving section 36B (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. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 224(b) of such Code, as added by 
this Act, is amended— 
(A) by striking ‘‘section 21(b)’’ in para-
graph (1) and inserting ‘‘section 36B(b)’’, 
(B) by striking ‘‘section 21’’ in paragraph 
(2)(B) and inserting ‘‘section 36B’’, 
(C) by striking ‘‘section 21(b)(1)(C)’’ in 
paragraph 
(3) 
and 
inserting 
‘‘section 
36B(b)(1)(C)’’, and 
(D) by striking ‘‘section 21’’ in paragraph 
(4) and inserting ‘‘section 36B’’. 
(2) Subsection (e) of section 213 of such Code 
is amended by striking ‘‘section 21’’ and inserting 
‘‘section 36B’’. 
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(3) Paragraph (2) of section 6213(g) of such 
Code is amended by striking ‘‘section 21’’ each place 
it appears and inserting ‘‘section 36B’’. 
(4) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting ‘‘, 
36B,’’ after ‘‘36A,’’. 
(5) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by striking the item 
relating to section 21. 
(6) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 36A the following new item: 
‘‘Sec. 36B. Expenses for household and dependent care services necessary for 
gainful employment.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenses paid in taxable years 
beginning after the date of the enactment of this Act. 
Æ 
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