1944 
(1) by striking ‘‘qualified’’ each place it appears 
in clause (iv)(II) and inserting ‘‘qualifying’’, and 
(2) by adding at the end the following new 
clause: 
‘‘(v) EXCEPTION FOR FRAUD AND IN-
TENTIONAL
DISREGARD
OF
RULES
AND 
REGULATIONS.— 
‘‘(I) IN GENERAL.—For purposes 
of 
determining 
the 
safe 
harbor 
amount under clause (iv) with respect 
to any taxpayer, an individual shall 
not be treated as taken into account 
in determining the annual advance 
amount of such taxpayer if the Sec-
retary determines that such individual 
was so taken into account due to 
fraud by the taxpayer or intentional 
disregard of rules and regulations by 
the taxpayer. 
‘‘(II) ARRANGEMENTS
TO
TAKE 
INDIVIDUAL
INTO
ACCOUNT
MORE 
THAN
ONCE.—For purposes of sub-
clause (I), a taxpayer shall not fail to 
be 
treated 
as 
intentionally 
dis-
regarding rules and regulations with 
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1945 
respect to any individual taken into 
account in determining the annual ad-
vance amount of such taxpayer if such 
taxpayer entered into a plan or other 
arrangement with, or expected, an-
other taxpayer to take such individual 
into account in determining the credit 
allowed under this section for the tax-
able year.’’. 
(b) TREATMENT OF JOINT RETURNS.—Section 24(j) 
is amended by adding at the end the following new para-
graph: 
‘‘(3) JOINT
RETURNS.—Except as otherwise 
provided by the Secretary, in the case of an advance 
payment made under section 7527A with respect to 
a joint return, half of such payment shall be treated 
as having been made to each individual filing such 
return.’’. 
(c) ANNUAL ADVANCE AMOUNT.—Section 7527A(b) 
is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A), by inserting ‘‘or 
based on any other information known to the 
Secretary’’ after ‘‘reference taxable year’’, 
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1946 
(B) in subparagraph (C), by inserting ‘‘un-
less determined by the Secretary based on any 
information known to the Secretary,’’ before 
‘‘the only children’’, and 
(C) in subparagraph (D), by inserting ‘‘un-
less determined by the Secretary based on any 
information known to the Secretary,’’ before 
‘‘the ages of’’, and 
(2) in paragraph (3)(A)(ii), by striking ‘‘ pro-
vided by the taxpayer’’ and inserting ‘‘provided, or 
known,’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning, and 
payments made, after December 31, 2020. 
SEC. 137102. EXTENSION AND MODIFICATION OF CHILD TAX 
CREDIT AND ADVANCE PAYMENT FOR 2022. 
(a) EXTENSIONS.— 
(1) EXTENSION OF CHILD TAX CREDIT.—Sec-
tion 24(i) is amended— 
(A) by striking ‘‘January 1, 2022’’ in the 
matter preceding paragraph (1) and inserting 
‘‘January 1, 2023’’, and 
(B) by inserting ‘‘AND 2022’’ after ‘‘2021’’ 
in the heading thereof. 
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1947 
(2) EXTENSION OF PROVISIONS RELATED TO 
POSSESSIONS OF THE UNITED STATES.— 
(A) Section 24(k)(2)(B) is amended— 
(i) by striking ‘‘December 31, 2021’’ 
in the matter preceding clause (i) and in-
serting ‘‘December 31, 2022’’, and 
(ii) by striking ‘‘AFTER 2021’’ in the 
heading thereof and inserting ‘‘AFTER 
2022’’. 
(B) Section 24(k)(3)(C)(ii) is amended— 
(i) in subclause (I), by inserting ‘‘or 
2022’’ after ‘‘2021’’, and 
(ii) in subclause (II), by striking ‘‘De-
cember 31, 2021’’ and inserting ‘‘Decem-
ber 31, 2022’’. 
(C) The heading of section 24(k)(2)(A) is 
amended by inserting ‘‘AND
2022’’ after 
‘‘2021’’. 
(3) EXTENSION OF ADVANCE PAYMENT.—Sec-
tion 7527A is amended— 
(A) in subsection (b)(1), by striking ‘‘50 
percent of’’, 
(B) in clauses (i) and (ii) of subsection 
(e)(4)(C), by inserting ‘‘or 2022’’ after ‘‘in 
2021’’, and 
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1948 
(C) in subsection (f), by striking ‘‘Decem-
ber 31, 2021’’ and inserting ‘‘December 31, 
2022’’. 
(b) REPEAL
OF SOCIAL SECURITY NUMBER RE-
QUIREMENT.—Section 24(h) is amended by striking para-
graph (7). 
(c) APPLICATION OF INCOME PHASEOUT ON BASIS 
OF INCOME FOR PRECEDING TAXABLE YEAR.—Section 
24(i) is amended by adding at the end the following new 
paragraph: 
‘‘(5) APPLICATION OF INCOME PHASEOUT ON 
BASIS OF INCOME FOR PRIOR TAXABLE YEAR.—If 
the taxpayer’s modified adjusted gross income (as 
defined in subsection (b)) for the taxable year for 
which the credit allowed under this section is deter-
mined is greater than such taxpayer’s modified ad-
justed gross income (as so defined) for the preceding 
taxable year, paragraph (4) and subsection (b)(1) 
shall both be applied with respect to such taxpayer’s 
modified adjusted gross income (as so defined) for 
the preceding taxable year.’’. 
(d) INFLATION ADJUSTMENT.—Section 24(i), as 
amended by subsection (c), is amended by adding at the 
end the following new paragraph: 
‘‘(6) INFLATION ADJUSTMENTS.— 
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1949 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning after December 31, 
2021, the $500 amount in subsection (h)(4)(A), 
the $3,000 and $3,600 amounts in paragraph 
(3) and subsection (j)(2)(B)(iv), and the dollar 
amounts in paragraph (4)(B), shall each be in-
creased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the percentage (if any) by 
which— 
‘‘(I) the CPI (as defined in sec-
tion 1(f)(4)) for the calendar year 
preceding the calendar year in which 
such taxable year begins, exceeds 
‘‘(II) the CPI (as so defined) for 
calendar year 2020. 
‘‘(B) ROUNDING.— 
‘‘(i) $500 AMOUNT.—In the case of 
the $500 amount in subsection (h)(4)(A), 
any increase under subparagraph (A) 
which is not a multiple of $10 shall be 
rounded to the nearest multiple of $10. 
‘‘(ii) $3,000 AND $3,600 AMOUNTS.— 
In the case of the $3,000 and $3,600 
amounts in paragraph (3) and subsection 
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1950 
(j)(2)(B)(iv), any increase under subpara-
graph (A) which is not a multiple of $100 
shall be rounded to the nearest multiple of 
$100. 
‘‘(iii) 
APPLICABLE
THRESHOLD 
AMOUNTS.—In the case of the dollar 
amounts in paragraph (4)(B), any increase 
under subparagraph (A) which is not a 
multiple of $5,000 shall be rounded to the 
nearest multiple of $5,000.’’. 
(e) MODIFICATION OF RECAPTURE SAFE HARBOR 
FOR 2022.—Section 24(j)(2)(B)(iv), as amended by the 
preceding provisions of this Act, is amended to read as 
follows: 
‘‘(iv) SAFE
HARBOR
AMOUNT.—For 
purposes of this subparagraph, the term 
‘safe harbor amount’ means, with respect 
to any taxpayer for any taxable year, the 
aggregate of $3,000 ($3,600 in the case of 
a qualifying child who has not attained age 
6 as of the close of the calendar year in 
which the taxable year of the taxpayer be-
gins) with respect to each qualifying child 
who is— 
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1951 
‘‘(I) taken into account in deter-
mining the annual advance amount 
with respect to such taxpayer under 
section 7527A with respect to months 
beginning in such taxable year, and 
‘‘(II) not taken into account in 
determining the credit allowed to such 
taxpayer under this section for such 
taxable year.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning, and 
payments made, after December 31, 2021. 
SEC. 137103. ESTABLISHMENT OF MONTHLY CHILD TAX 
CREDIT WITH ADVANCE PAYMENT THROUGH 
2025. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 24 the following new sections: 
‘‘SEC. 24A. MONTHLY CHILD TAX CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year the sum of the monthly specified child 
allowances determined with respect to the taxpayer under 
subsection (b) for each calendar month during such tax-
able year. 
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1952 
‘‘(b) MONTHLY SPECIFIED CHILD ALLOWANCE.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘monthly specified child allowance’ 
means, with respect to any taxpayer for any cal-
endar month, the sum of— 
‘‘(A) $300 with respect to each specified 
child of such taxpayer who will not, as of the 
close of the taxable year which includes such 
month, have attained age 6, plus 
‘‘(B) $250 with respect to each specified 
child of such taxpayer who will, as of the close 
of the taxable year which includes such month, 
have attained age 6. 
‘‘(2) LIMITATIONS
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.— 
‘‘(A) INITIAL
REDUCTION.—The monthly 
specified child allowance otherwise determined 
under paragraph (1) with respect to any tax-
payer for any calendar month shall be reduced 
(but not below zero) by 1⁄12 of 5 percent of the 
excess (if any) of the taxpayer’s modified ad-
justed gross income for the applicable taxable 
year over the initial threshold amount in effect 
for such applicable taxable year. 
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1953 
‘‘(B) LIMITATION
ON
INITIAL
REDUC-
TION.—The amount of the reduction under sub-
paragraph (A) shall not exceed the lesser of— 
‘‘(i) the excess (if any) of— 
‘‘(I) the monthly specified child 
allowance with respect to the taxpayer 
for the calendar month (determined 
without regard to this paragraph), 
over 
‘‘(II) the amount which would be 
determined under subclause (I) if the 
dollar amounts in effect under sub-
paragraphs (A) and (B) of paragraph 
(1) were each equal to $166.67, or 
‘‘(ii) 1⁄12 of 5 percent of the excess of 
the secondary threshold amount over the 
initial threshold amount. 
‘‘(C) 
SECONDARY
REDUCTION.—The 
monthly specified child allowance otherwise de-
termined under paragraph (1) with respect to 
any taxpayer for any calendar month (deter-
mined after the application of subparagraphs 
(A) and (B)) shall be reduced (but not below 
zero) by 1⁄12 of 5 percent of the excess (if any) 
of the taxpayer’s modified adjusted gross in-
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1954 
come for the applicable taxable year over the 
secondary threshold amount. 
‘‘(D) DEFINITIONS RELATED TO LIMITA-
TIONS BASED ON MODIFIED ADJUSTED GROSS 
INCOME.—For purposes of this paragraph— 
‘‘(i) INITIAL THRESHOLD AMOUNT.— 
The 
term 
‘initial 
threshold 
amount’ 
means— 
‘‘(I) $150,000, in the case of a 
joint return or surviving spouse (as 
defined in section 2(a)), 
‘‘(II) 1⁄2 the dollar amount in ef-
fect under subclause (I), in the case of 
a married individual filing a separate 
return, and 
‘‘(III) $112,500, in any other 
case. 
‘‘(iii) 
SECONDARY
THRESHOLD 
AMOUNT.—The term ‘secondary threshold 
amount’ means— 
‘‘(I) $400,000, in the case of a 
joint return or surviving spouse (as 
defined in section 2(a)), 
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1955 
‘‘(II) $300,000, in the case of a 
head of household (as defined in sec-
tion 2(b)), and 
‘‘(III) $200,000, in any other 
case. 
‘‘(iv) APPLICABLE TAXABLE YEAR.— 
The term ‘applicable taxable year’ means, 
with respect to any taxpayer, the relevant 
taxable year with respect to which the tax-
payer has the lowest modified adjusted 
gross income. For purposes of the pre-
ceding sentence, the term ‘relevant taxable 
year’ means the taxable year for which the 
credit allowed under this section is deter-
mined and each of the 2 immediately pre-
ceding taxable years. 
‘‘(v) MODIFIED ADJUSTED GROSS IN-
COME.—The term ‘modified adjusted gross 
income’ means adjusted gross income in-
creased by any amount excluded from 
gross income under section 911, 931, or 
933. 
‘‘(c) SPECIFIED CHILD.—For purposes of this sec-
tion— 
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1956 
‘‘(1) IN GENERAL.—The term ‘specified child’ 
means, with respect to any taxpayer for any cal-
endar month, an individual— 
‘‘(A) who has the same principal place of 
abode as the taxpayer for more than one-half of 
such month, 
‘‘(B) who is younger than the taxpayer and 
will not, as of the close of the calendar year 
which includes such month, have attained age 
18, 
‘‘(C) who receives care from the taxpayer 
during such month that is not compensated, 
‘‘(D) who is not the spouse of the taxpayer 
at any time during such month, 
‘‘(E) who is not a taxpayer with respect to 
whom any individual is a specified child for 
such month, and 
‘‘(F) who either— 
‘‘(i) is a citizen, national, or resident 
of the United States, or 
‘‘(ii) if the taxpayer is a citizen or na-
tional of the United States, such individual 
is described in section 152(f)(1)(B) with 
respect to such taxpayer. 
‘‘(2) CARE FROM THE TAXPAYER.— 
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1957 
‘‘(A) IN GENERAL.—Except as otherwise 
provided by the Secretary, whether any indi-
vidual receives care from the taxpayer (within 
the meaning of paragraph (1)(C)) shall be de-
termined on the basis of facts and cir-
cumstances with respect to the following fac-
tors: 
‘‘(i) The supervision provided by the 
taxpayer regarding the daily activities and 
needs of the individual. 
‘‘(ii) The maintenance by the taxpayer 
of a secure environment at which the indi-
vidual resides. 
‘‘(iii) The provision or arrangement by 
the taxpayer of, and transportation by the 
taxpayer to, medical care at regular inter-
vals and as required for the individual. 
‘‘(iv) The involvement by the taxpayer 
in, and financial and other support by the 
taxpayer for, educational or similar activi-
ties of the individual. 
‘‘(v) Any other factor that the Sec-
retary determines to be appropriate to de-
termine whether the individual receives 
care from the taxpayer. 
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1958 
‘‘(B) DETERMINATION OF WHETHER CARE 
IS
COMPENSATED.—For purposes of deter-
mining if care is compensated within the mean-
ing of paragraph (1)(C), compensation from the 
Federal Government, a State or local govern-
ment, a Tribal government, or any possession of 
the United States shall not be taken into ac-
count. 
‘‘(3) APPLICATION OF TIE-BREAKER RULES.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (D), if any individual would (but 
for this paragraph) be a specified child of 2 or 
more taxpayers for any month, such individual 
shall be treated as the specified child only of 
the taxpayer who is— 
‘‘(i) the parent of the individual (or, if 
such individual would (but for this para-
graph) be a specified child of 2 or more 
parents of the individual for such month, 
the parent of the individual determined 
under subparagraph (B)), 
‘‘(ii) if the individual is not a specified 
child of any parent of the individual (deter-
mined without regard to this paragraph), 
the specified relative of the individual with 
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1959 
the highest adjusted gross income for the 
taxable year which includes such month, or 
‘‘(iii) if the individual is neither a 
specified child of any parent of the indi-
vidual nor a specified child of any specified 
relative of the individual (in both cases de-
termined without regard to this para-
graph), the taxpayer with the highest ad-
justed gross income for the taxable year 
which includes such month. 
‘‘(B) TIE-BREAKER AMONG PARENTS.—If 
any individual would (but for this paragraph) 
be the specified child of 2 or more parents of 
the individual for any month, such child shall 
be treated only as the specified child of— 
‘‘(i) the parent with whom the child 
resided for the longest period of time dur-
ing such month, or 
‘‘(ii) if the child resides with both par-
ents for the same amount of time during 
such month, the parent with the highest 
adjusted gross income for the taxable year 
which includes such month. 
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1960 
‘‘(C) SPECIFIED RELATIVE.—For purposes 
of this paragraph, the term ‘specified relative’ 
means an individual who is— 
‘‘(i) an ancestor of a parent of the 
specified child, 
‘‘(ii) a brother or sister of a parent of 
the specified child, or 
‘‘(iii) a brother, sister, stepbrother, or 
stepsister of the specified child. 
‘‘(D) CERTAIN
PARENTS
OR
SPECIFIED 
RELATIVES NOT TAKEN INTO ACCOUNT.—This 
paragraph shall be applied without regard to 
any parent or specified relative of an individual 
for any month if— 
‘‘(i) such parent or specified relative 
elects to have such individual not be treat-
ed as a specified child of such parent or 
specified relative for such month, 
‘‘(ii) in the case of a parent of such 
individual, the adjusted gross income of 
the taxpayer (with respect to whom such 
individual would be treated as a specified 
child after application of this subpara-
graph) for the taxable year which includes 
such month is higher than the highest ad-
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1961 
justed gross income of any parent of the 
individual for any taxable year which in-
cludes such month (determined without re-
gard to any parent with respect to whom 
such individual is not a specified child, de-
termined without regard to subparagraphs 
(A) and (B) and after application of this 
subparagraph), and 
‘‘(iii) in the case of a specified relative 
of such individual, the adjusted gross in-
come of the taxpayer (with respect to 
whom such individual would be treated as 
a specified child after application of this 
subparagraph) for the taxable year which 
includes such month is higher than the 
highest adjusted gross income of any par-
ent and any specified relative of the indi-
vidual for any taxable year which includes 
such month (determined without regard to 
any parent and any specified relative with 
respect to whom such individual is not a 
specified child, determined without regard 
to subparagraphs (A) and (B) and after 
application of this subparagraph). 
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1962 
‘‘(E) TREATMENT OF JOINT RETURNS.— 
For purposes of this paragraph, with respect to 
any month, 2 individuals filing a joint return 
for the taxable year which includes such month 
shall be treated as 1 individual. 
‘‘(F) PARENT.—Except as otherwise pro-
vided by the Secretary, the term ‘parent’ shall 
have the same meaning as when used in section 
152(c)(4). 
‘‘(4) SPECIAL RULES WITH RESPECT TO BIRTH 
AND DEATH.— 
‘‘(A) BIRTH.— 
‘‘(i) IN GENERAL.—In the case of the 
birth of an individual during any calendar 
year, such individual shall be treated as a 
specified child of the relevant taxpayer for 
each calendar month in such calendar year 
which precedes the calendar month re-
ferred to in clause (ii). 
‘‘(ii) 
RELEVANT
TAXPAYER.—For 
purposes of clause (i), the term ‘relevant 
taxpayer’ means the taxpayer with respect 
to whom the individual referred to in 
clause (i) is a specified child for the first 
month for which such individual is a speci-
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1964 
‘‘(ii) not be treated as a day at any 
other location. 
‘‘(B) TEMPORARY
ABSENCE.—For pur-
poses of subparagraph (A), an absence shall be 
treated as temporary if— 
‘‘(i) the individual would have resided 
at the place of abode but for the absence, 
and 
‘‘(ii) 
under 
the 
facts 
and 
cir-
cumstances, it is reasonable to assume that 
the individual will return to reside at the 
place of abode. 
‘‘(6) SPECIAL RULE FOR DIVORCED PARENTS, 
ETC.—Rules similar to the rules section 152(e) shall 
apply for purposes of this subsection. 
‘‘(7) ELIGIBILTY
DETERMINED
ON
BASIS
OF 
PRESUMPTIVE ELIGIBILITY.— 
‘‘(A) IN
GENERAL.—If a period of pre-
sumptive eligibility is established under section 
7527B(c) for any individual with respect to any 
taxpayer— 
‘‘(i) such individual shall be treated as 
the specified child of such taxpayer for any 
month in such period of presumptive eligi-
bility, and 
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1965 
‘‘(ii) such individual shall not be 
treated as the specified child of any other 
taxpayer with respect to whom a period of 
presumptive eligibility has not been estab-
lished for any such month. 
‘‘(B) ABILITY OF CREDIT CLAIMANTS TO 
ESTABLISH PRESUMPTIVE ELIGIBILITY.—Noth-
ing in section 7527B(c) shall be interpreted to 
preclude a taxpayer who elects not to receive 
monthly advance child payments under section 
7527B from establishing a period of presump-
tive eligibility (including any such period de-
scribed in section 7527B(c)(2)(D)) with respect 
to any specified child for purposes of this sec-
tion. 
‘‘(d) PORTION OF CREDIT REFUNDABLE.—If the tax-
payer (in the case of a joint return, either spouse) has 
a principal place of abode (determined as provided in sec-
tion 32) in the United States or Puerto Rico for more 
than one-half of any calendar month during the taxable 
year, so much of the credit otherwise allowed under sub-
section (a) as is attributable to monthly specified child al-
lowances with respect to any such calendar month shall 
be allowed under subpart C (and not allowed under this 
subpart). 
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1966 
‘‘(e) IDENTIFICATION REQUIREMENTS.—Rules simi-
lar to the rules of section 24(e) shall apply for purposes 
of this section. 
‘‘(f) RESTRICTIONS ON TAXPAYERS WHO IMPROP-
ERLY
CLAIMED
CREDIT
OR
IMPROPERLY
RECEIVED 
MONTHLY ADVANCE CHILD PAYMENT.— 
‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT 
OR RECKLESS CLAIMS.— 
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section for any taxable year 
(and no payment shall be made under section 
7527B for any month) in the disallowance pe-
riod. 
‘‘(B) DISALLOWANCE
PERIOD.—For pur-
poses of subparagraph (A), the disallowance pe-
riod is— 
‘‘(i) the period of 10 taxable years 
after the most recent taxable year for 
which there was a final determination that 
the taxpayer’s claim of credit under this 
section or section 24 (or payment under 
section 7527A or 7527B) was due to 
fraud, 
‘‘(ii) the period of 2 taxable years 
after the most recent taxable year for 
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1967 
which there was a final determination that 
the taxpayer’s claim of credit under this 
section or section 24 (or payment under 
section 7527A or 7527B) was due to reck-
less or intentional disregard of rules and 
regulations (but not due to fraud), and 
‘‘(iii) in addition to any period deter-
mined under clause (i) or (ii) (as the case 
may be), the period beginning on the date 
of the final determination described in 
such clause and ending with the beginning 
of the period described in such clause. 
‘‘(2) TAXPAYERS
MAKING
IMPROPER
PRIOR 
CLAIMS.—In the case of a taxpayer who is denied 
credit under this section or section 24 for any tax-
able year as a result of the deficiency procedures 
under subchapter B of chapter 63, no credit shall be 
allowed under this section for any subsequent tax-
able year (and no payment shall be made under sec-
tion 7527B for any subsequent month) unless the 
taxpayer provides such information as the Secretary 
may require to demonstrate eligibility for such cred-
it. 
‘‘(3) COORDINATION
WITH
POSSESSIONS
OF 
THE UNITED STATES.—In carrying out this section, 
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1968 
the Secretary shall coordinate with each possession 
of the United States to prevent the avoidance of the 
application of this subsection. 
‘‘(g) RECONCILIATION OF CREDIT AND MONTHLY 
ADVANCE CHILD PAYMENTS.— 
‘‘(1) IN GENERAL.—The amount otherwise de-
termined under subsection (a) with respect to any 
taxpayer for any taxable year shall be reduced (but 
not below zero) by the aggregate amount of pay-
ments made under section 7527B to such taxpayer 
for one or more calendar months in such taxable 
year. Any failure to so reduce the credit shall be 
treated as arising out of a mathematical or clerical 
error and assessed according to section 6213(b)(1). 
‘‘(2) RECAPTURE
OF
EXCESS
ADVANCE
PAY-
MENTS IN CERTAIN CIRCUMSTANCES.—In the case 
of a taxpayer described in paragraph (3) for any 
taxable year, the tax imposed by this chapter for 
such taxable year shall be increased by the excess (if 
any) of— 
‘‘(A) the aggregate amount of payments 
made to the taxpayer under section 7527B for 
one or more calendar months in such taxable 
year, over 
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1969 
‘‘(B) the amount determined under sub-
section (a) with respect to the taxpayer for such 
taxable year (without regard to paragraph (1) 
of this subsection). 
‘‘(3) TAXPAYERS SUBJECT TO RECAPTURE.— 
‘‘(A) FRAUD
OR
RECKLESS
OR
INTEN-
TIONAL
DISREGARD
OF
RULES
AND
REGULA-
TIONS.—A taxpayer is described in this para-
graph with respect to any taxable year if the 
Secretary determines that the amount described 
in paragraph (2)(A) with respect to the tax-
payer for such taxable year was determined on 
the basis of fraud or a reckless or intentional 
disregard of rules and regulations. 
‘‘(B) 
UNDERSTATEMENT
OF
INCOME; 
CHANGES IN FILING STATUS.—If the amount 
described in paragraph (2)(A) with respect to 
the taxpayer for the taxable year was deter-
mined on the basis of an amount of the tax-
payer’s modified adjusted gross income which 
was less than the taxpayer’s modified adjusted 
gross income for the applicable taxable year (as 
defined in subsection (b))— 
‘‘(i) such taxpayer shall be treated as 
described in this paragraph, and 
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1970 
‘‘(ii) the increase determined under 
paragraph (2) by reason of this subpara-
graph shall not exceed the excess of— 
‘‘(I) the amount described in 
paragraph (2)(A), over 
‘‘(II) the amount which would be 
so described if the payments described 
therein had been determined on the 
basis of the taxpayer’s modified ad-
justed gross income for the applicable 
taxable year (as defined in subsection 
(b)). 
A rule similar to the rule of the preceding 
sentence shall apply if the amount de-
scribed in paragraph (2)(A) with respect to 
the taxpayer for the taxable year was de-
termined on the basis of a filing status of 
the taxpayer which differs from the tax-
payer’s filing status for the applicable tax-
able year (as so defined). 
‘‘(C) PAYMENTS
MADE
OUTSIDE
OF
PE-
RIOD
OF
PRESUMPTIVE
ELIGIBILITY.—If any 
payment described in paragraph (2)(A) with re-
spect to the taxpayer for the taxable year was 
made with respect to a child for a month which 
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1971 
was not part of a period of presumptive eligi-
bility established under section 7527B(c) for 
such child with respect to such taxpayer— 
‘‘(i) such taxpayer shall be treated as 
described in this paragraph, and 
‘‘(ii) the increase determined under 
paragraph (2) by reason of this subpara-
graph shall not exceed the portion of such 
payment so made. 
‘‘(D) CERTAIN
PAYMENTS
MADE
AFTER 
NOTICE
FROM
SECRETARY.—If the Secretary 
notifies a taxpayer under section 7527B(j)(2) 
that such taxpayer is subject to recapture with 
respect to any payments— 
‘‘(i) such taxpayer shall be treated as 
described in this paragraph, and 
‘‘(ii) the increase determined under 
paragraph (2) by reason of this subpara-
graph shall not exceed the aggregate 
amount of such payments. 
‘‘(E) TAXPAYERS
MOVING
TO
ANOTHER 
JURISDICTION.—To minimize the amount of ad-
vance payments made under section 7527B to 
ineligible individuals, the Secretary shall issue 
regulations or other guidance for purposes of 
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1972 
this paragraph which apply with respect to tax-
payers 
who 
are 
described 
in 
section 
7527B(b)(4) with respect to the reference 
month but are not so described with respect to 
one or more months during the taxable year for 
which advance payments under section 7527B 
are made. 
‘‘(F) OTHER CIRCUMSTANCES TO PREVENT 
ABUSE.—A taxpayer is described in this para-
graph with respect to any taxable year pursuant 
to regulations or other guidance of the Sec-
retary describing other recapture circumstances 
to facilitate the administration and enforcement 
by the Secretary of section 7527B to minimize 
the amount of advance payments made under 
section 7527B to ineligible individuals and to 
prevent abuse. 
‘‘(4) JOINT
RETURNS.—Except as otherwise 
provided by the Secretary, in the case of an advance 
payment made under section 7527B with respect to 
a joint return, half of such payment shall be treated 
as having been made to each individual filing such 
return. 
‘‘(h) INFLATION ADJUSTMENTS.— 
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1973 
‘‘(1) MONTHLY
SPECIFIED
CHILD
ALLOW-
ANCE.— 
‘‘(A) IN
GENERAL.—In the case of any 
month beginning after December 31, 2022, 
each of the dollar amounts in subsection (b)(1) 
shall be increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the percentage (if any) by 
which— 
‘‘(I) the CPI (as defined in sec-
tion 1(f)(4)) for the calendar year 
preceding the calendar year in which 
such month begins, exceeds 
‘‘(II) the CPI (as so defined) for 
calendar year 2020. 
‘‘(B) ROUNDING.—Any increase under 
subparagraph (A) which is not a multiple of 
$10 shall be rounded to the nearest multiple of 
$10. 
‘‘(2) INITIAL THRESHOLD AMOUNT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning after December 31, 
2022, the dollar amounts in subclauses (I) and 
(III) of subsection (b)(2)(D)(i) shall each be in-
creased by an amount equal to— 
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1974 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the percentage (if any) by 
which— 
‘‘(I) the CPI (as defined in sec-
tion 1(f)(4)) for the calendar year 
preceding the calendar year in which 
such taxable year begins, exceeds 
‘‘(II) the CPI (as so defined) for 
calendar year 2020. 
‘‘(B) ROUNDING.—Any increase under 
subparagraph (A) which is not a multiple of 
$5,000 shall be rounded to the nearest multiple 
of $5,000. 
‘‘(i) APPLICATION OF CREDIT IN POSSESSIONS.— 
‘‘(1) MIRROR CODE POSSESSIONS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
pay to each possession of the United States 
with a mirror code tax system amounts equal to 
the loss (if any) to that possession by reason of 
the application of this section (determined with-
out regard to this subsection) with respect to 
taxable years beginning after 2022 and before 
2026. Such amounts shall be determined by the 
Secretary based on information provided by the 
government of the respective possession. 
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1975 
‘‘(B) COORDINATION
WITH
CREDIT
AL-
LOWED
AGAINST
UNITED
STATES
INCOME 
TAXES.—No credit shall be allowed under this 
section for any taxable year to any individual to 
whom a credit is allowable against taxes im-
posed by a possession of the United States with 
a mirror code tax system by reason of the appli-
cation of this section in such possession for 
such taxable year. 
‘‘(C) MIRROR
CODE
TAX
SYSTEM.—For 
purposes of this paragraph, the term ‘mirror 
code tax system’ means, with respect to any 
possession of the United States, the income tax 
system of such possession if the income tax li-
ability of the residents of such possession under 
such system is determined by reference to the 
income tax laws of the United States as if such 
possession were the United States. 
‘‘(2) CROSS REFERENCES RELATED TO APPLI-
CATION
OF
CREDIT
TO
RESIDENTS
OF
PUERTO 
RICO.— 
‘‘(A) For application of refundable credit 
to residents of Puerto Rico, see subsection (d). 
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1976 
‘‘(B) For application of advance payment 
to residents of Puerto Rico, see section 
7527B(b)(4). 
‘‘(3) AMERICAN SAMOA.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
pay to American Samoa amounts estimated by 
the Secretary as being equal to the aggregate 
benefits that would have been provided to resi-
dents of American Samoa by reason of the ap-
plication of this section for taxable years begin-
ning after 2022 and before 2026 if the provi-
sions of this section had been in effect in Amer-
ican Samoa (applied as if American Samoa 
were the United States and without regard to 
the application of this section to residents of 
Puerto Rico under subsection (d)). 
‘‘(B) DISTRIBUTION REQUIREMENT.—Sub-
paragraph (A) shall not apply unless American 
Samoa has a plan, which has been approved by 
the Secretary, under which American Samoa 
will promptly distribute such payments to its 
residents. 
‘‘(C) COORDINATION
WITH
CREDIT
AL-
LOWED
AGAINST
UNITED
STATES
INCOME 
TAXES.— 
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