SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Child Care for Eco-
nomic Recovery Act’’. 
SEC. 2. REFERENCES. 
Except as expressly provided otherwise, any reference 
to ‘‘this Act’’ contained in any division of this Act shall 
be treated as referring only to the provisions of that divi-
sion. 
DIVISION A—EMERGENCY CHILD CARE 
SUPPORT APPROPRIATIONS 
The following sums in this Act are appropriated, out 
of any money in the Treasury not otherwise appropriated, 
for the fiscal year ending September 30, 2020, and for 
other purposes, namely: 
TITLE I—DEPARTMENT OF THE TREASURY 
INTERNAL REVENUE SERVICES 
TAXPAYER SERVICES 
For an additional amount for ‘‘Taxpayer Services’’, 
$5,000,000, to remain available until expended, for mak-
ing grants under the Community Volunteer Income Tax 
Assistance Matching Grants Program established under 
section 7526A of the Internal Revenue Code of 1986: Pro-
vided, That the matching funds requirement in section 
7526A(b)(2) shall not apply to funds made available under 
this heading in this Act: Provided further, That such 
amount is designated by the Congress as being for an
emergency 
requirement 
pursuant 
to 
section 
251(b)(2)(A)(i) of the Balanced Budget and Emergency 
Deficit Control Act of 1985. 
TITLE II—DEPARTMENT OF HEALTH AND 
HUMAN SERVICES 
ADMINISTRATION FOR CHILDREN AND FAMILIES 
SOCIAL SERVICES BLOCK GRANT 
For an additional amount for ‘‘Social Services Block 
Grant’’, $850,000,000, to remain available until Sep-
tember 30, 2021, for making grants to States pursuant 
to section 2002 of the Social Security Act: Provided, That 
the amount made available under this heading in this Act 
shall be used for necessary expenses for family care for 
essential workers, pursuant to section 409 of division B 
this Act: Provided further, That such amount is designated 
by the Congress as being for an emergency requirement 
pursuant to section 251(b)(2)(A)(i) of the Balanced Budg-
et and Emergency Deficit Control Act of 1985. 
CHILD CARE AND DEVELOPMENT FUND 
For an additional amount for ‘‘Child Care and Devel-
opment Fund’’, $10,000,000,000, to remain available 
until September 30, 2024, for necessary expenses for in-
frastructure grants to improve child care safety, including 
needs assessments, pursuant to section 418A of Part A 
of title IV of the Social Security Act, as added by division
B of this Act: Provided, That funds made available under 
this heading in this Act may be used for grants for the 
construction, alteration, or renovation of non-federally 
owned facilities to improve child care safety: Provided fur-
ther, That all construction, alteration, or renovation work, 
carried out in whole or in part with funds appropriated 
under this heading in this Act, shall be subject to the re-
quirements of subchapter IV of chapter 31 of title 40, 
United States Code (commonly referred to as the ‘‘Davis- 
Bacon Act’’): Provided further, That such amount is des-
ignated by the Congress as being for an emergency re-
quirement pursuant to section 251(b)(2)(A)(i) of the Bal-
anced Budget and Emergency Deficit Control Act of 1985. 
TITLE III—GENERAL PROVISIONS—THIS 
DIVISION 
SEC. 301. Each amount appropriated or made avail-
able by this Act is in addition to any amounts otherwise 
appropriated for the fiscal year involved. 
SEC. 302. No part of any appropriation contained in 
this Act shall remain available for obligation beyond the 
current fiscal year unless expressly so provided herein. 
SEC. 303. Unless otherwise provided for by this Act, 
the additional amounts appropriated by this Act to appro-
priations accounts shall be available under the authorities
and conditions applicable to such appropriations accounts 
for fiscal year 2020. 
SEC. 304. Each amount designated in this Act by the 
Congress as being for an emergency requirement pursuant 
to section 251(b)(2)(A)(i) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 shall be available 
(or rescinded or transferred, if applicable) only if the 
President subsequently so designates all such amounts 
and transmits such designations to the Congress. 
SEC. 305. Any amount appropriated by this Act, des-
ignated by the Congress as an emergency requirement 
pursuant to section 251(b)(2)(A)(i) of the Balanced Budg-
et and Emergency Deficit Control Act of 1985 and subse-
quently so designated by the President, and transferred 
pursuant to transfer authorities provided by this Act shall 
retain such designation. 
BUDGETARY EFFECTS 
SEC. 306. (a) STATUTORY PAYGO SCORECARDS.— 
The budgetary effects of division B shall not be entered 
on either PAYGO scorecard maintained pursuant to sec-
tion 4(d) of the Statutory Pay-As-You-Go Act of 2010. 
(b) SENATE PAYGO SCORECARDS.—The budgetary 
effects of division B shall not be entered on any PAYGO 
scorecard maintained for purposes of section 4106 of H. 
Con. Res. 71 (115th Congress).
(c) CLASSIFICATION
OF BUDGETARY EFFECTS.— 
Notwithstanding Rule 3 of the Budget Scorekeeping 
Guidelines set forth in the joint explanatory statement of 
the committee of conference accompanying Conference Re-
port 105–217 and section 250(c)(8) of the Balanced 
Budget and Emergency Deficit Control Act of 1985, the 
budgetary effects of division B shall not be estimated— 
(1) for purposes of section 251 of such Act; and 
(2) for purposes of paragraph (4)(C) of section 
3 of the Statutory Pay-As-You-Go Act of 2010 as 
being included in an appropriation Act. 
This division may be cited as the ‘‘Emergency Child 
Care Support Appropriations Act, 2020’’. 
DIVISION B—WORKER ACCESS 
TO CHILD AND FAMILY CARE 
SEC. 401. SHORT TITLE. 
This division may be cited as the ‘‘Worker Access to 
Child and Family Care Act’’. 
SEC. 402. REFUNDABILITY AND ENHANCEMENT OF CHILD 
AND DEPENDENT CARE TAX CREDIT. 
(a) TREATMENT OF CREDIT AS REFUNDABLE.—Sec-
tion 21 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new subsection: 
‘‘(g) TREATMENT OF CREDIT AS REFUNDABLE.—In 
the case of an individual other than a nonresident alien,
the credit allowed under subsection (a) shall be treated 
as a credit allowed under subpart C (and not allowed 
under this subpart).’’. 
(b) INCREASE IN APPLICABLE PERCENTAGE.—Sec-
tion 21(a)(2) of such Code is amended— 
(1) by striking ‘‘35 percent’’ and inserting ‘‘50 
percent’’, and 
(2) by striking ‘‘$15,000’’ and inserting 
‘‘$120,000’’. 
(c) INCREASE IN DOLLAR LIMIT ON AMOUNT CRED-
ITABLE.—Section 21(c) of such Code is amended— 
(1) by striking ‘‘$3,000’’ in paragraph (1) and 
inserting ‘‘$6,000’’, and 
(2) by striking ‘‘$6,000’’ in paragraph (2) and 
inserting ‘‘twice the amount in effect under para-
graph (1)’’. 
(d) INFLATION ADJUSTMENT.—Section 21(e) of such 
Code is amended by adding at the end the following new 
paragraph: 
‘‘(11) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning after December 31, 
2020, the $120,000 amount in subsection (a)(2) and 
the $6,000 amount in subsection (c)(1) 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 ‘2019’ for ‘2016’ in sub-
paragraph (A)(ii) thereof. 
If any increase determined under this paragraph is 
not a multiple of $100, such increase shall be round-
ed to the next highest multiple of $100.’’. 
(e) CONFORMING AMENDMENT.—Section 1324(b)(2) 
of title 31, United States Code, is amended by inserting 
‘‘21 (by reason of subsection (g) thereof),’’ before ‘‘25A’’. 
(f) COORDINATION WITH POSSESSION TAX SYS-
TEMS.—Section 21(g)(1) of the Internal Revenue Code of 
1986 (as added by this section) shall not apply to any per-
son— 
(1) to whom a credit is allowed against taxes 
imposed by a possession with a mirror code tax sys-
tem by reason of the application of section 21 of 
such Code in such possession for such taxable year, 
or 
(2) to whom a credit would be allowed against 
taxes imposed by a possession which does not have 
a mirror code tax system if the provisions of section 
21 of such Code had been in effect in such posses-
sion for such taxable year.
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
SEC. 403. INCREASE IN EXCLUSION FOR EMPLOYER-PRO-
VIDED DEPENDENT CARE ASSISTANCE. 
(a) IN GENERAL.—Section 129(a)(2)(A) of the Inter-
nal Revenue Code of 1986 is amended by striking ‘‘$5,000 
($2,500’’ and inserting ‘‘$10,500 (half such dollar 
amount’’. 
(b) INFLATION ADJUSTMENT.—Section 129(a)(2) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(D) INFLATION
ADJUSTMENT.—In the 
case of any taxable year beginning after Decem-
ber 31, 2020, the $10,500 amount in subpara-
graph (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 ‘2019’ for 
‘2016’ in subparagraph (A)(ii) thereof. 
Any increase determined under the preceding 
sentence which is not a multiple of $50, shall
be rounded to the next highest multiple of 
$50.’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
(d) PLAN AMENDMENTS.—A plan or other arrange-
ment that otherwise satisfies all applicable requirements 
of sections 106, 125, and 129 of the Internal Revenue 
Code of 1986 (including any rules or regulations there-
under) shall not fail to be treated as a cafeteria plan or 
dependent care flexible spending arrangement merely be-
cause such plan or arrangement is amended pursuant to 
the amendments made by this section and such amend-
ment is retroactive, if— 
(1) such amendment is adopted no later than 
the last day of the first plan year beginning after 
December 31, 2019, and 
(2) the plan or arrangement is operated con-
sistent with the terms of such amendment during 
the period beginning on the effective date of the 
amendment and ending on the date the amendment 
is adopted.
SEC. 404. PAYROLL CREDIT FOR CERTAIN FIXED EXPENSES 
OF CHILD CARE FACILITIES SUBJECT TO 
CLOSURE BY REASON OF COVID–19. 
(a) IN GENERAL.—In the case of an eligible em-
ployer, there shall be allowed as a credit against applicable 
employment taxes for each calendar quarter an amount 
equal to 50 percent of the qualified fixed expenses paid 
or incurred by such employer during such calendar quar-
ter. 
(b) LIMITATIONS AND REFUNDABILITY.— 
(1) OVERALL
QUARTERLY
DOLLAR
LIMITA-
TION.—The qualified fixed expenses which may be 
taken into account under subsection (a) (determined 
after the application of paragraph (2)) by any eligi-
ble employer for any calendar quarter shall not ex-
ceed the least of— 
(A) the qualified fixed expenses paid by the 
eligible employer in the same calendar quarter 
of calendar year 2019, 
(B) $25,000,000, or 
(C) the greater of— 
(i) 25 percent of the wages paid with 
respect to the employment of all the em-
ployees of the eligible employer for such 
calendar quarter, or
(ii) 6.25 percent of the gross receipts 
of the eligible employer for calendar year 
2019. 
(2) PER FACILITY QUARTERLY DOLLAR LIMITA-
TION.—The qualified fixed expenses which may be 
taken into account under subsection (a) by any eligi-
ble employer for any calendar quarter with respect 
to any facility of such employer shall not exceed 
$50,000. 
(3) CREDIT LIMITED TO CERTAIN EMPLOYMENT 
TAXES.—The credit allowed by subsection (a) with 
respect to any calendar quarter shall not exceed the 
applicable employment taxes for such calendar quar-
ter (reduced by any credits allowed under sub-
sections (e) and (f) of section 3111 of such Code, 
sections 7001 and 7003 of the Families First 
Coronavirus Response Act, and section 2301 of the 
CARES Act, for such quarter) on the wages paid 
with respect to the employment of all the employees 
of the eligible employer for such calendar quarter. 
(4) REFUNDABILITY OF EXCESS CREDIT.— 
(A) IN GENERAL.—If the amount of the 
credit under subsection (a) exceeds the limita-
tion of paragraph (3) for any calendar quarter, 
such excess shall be treated as an overpayment
that shall be refunded under sections 6402(a) 
and 6413(b) of the Internal Revenue Code of 
1986. 
(B) TREATMENT OF PAYMENTS.—For pur-
poses of section 1324 of title 31, United States 
Code, any amounts due to an employer under 
this paragraph shall be treated in the same 
manner as a refund due from a credit provision 
referred to in subsection (b)(2) of such section. 
(c) DEFINITIONS.—For purposes of this section— 
(1) APPLICABLE
EMPLOYMENT
TAXES.—The 
term ‘‘applicable employment taxes’’ means the fol-
lowing: 
(A) The taxes imposed under section 
3111(a) of the Internal Revenue Code of 1986. 
(B) So much of the taxes imposed under 
section 3221(a) of such Code as are attrib-
utable to the rate in effect under section 
3111(a) of such Code. 
(2) ELIGIBLE EMPLOYER.— 
(A) IN GENERAL.—The term ‘‘eligible em-
ployer’’ means any employer— 
(i) which was carrying on a trade or 
business engaged in the provision of child 
care assistance at a qualified child care fa-
cility (within the meaning of section 
45F(c)(2)(A) of such Code without regard 
to the last sentence thereof) at any time 
during calendar year 2020, and 
(ii) with respect to any calendar quar-
ter, for which— 
(I) the operation of the trade or 
business described in clause (i) is fully 
or partially suspended during the cal-
endar quarter due to orders from an 
appropriate governmental authority 
limiting commerce, travel, or group 
meetings (for commercial, social, reli-
gious, or other purposes) due to the 
coronavirus disease 2019 (COVID– 
19), or 
(II) such calendar quarter is 
within the period described in sub-
paragraph (B). 
(B) SIGNIFICANT DECLINE IN GROSS RE-
CEIPTS.—The period described in this subpara-
graph is the period— 
(i) beginning with the first calendar 
quarter beginning after December 31, 
2019, for which gross receipts (within the
meaning of section 448(c) of the Internal 
Revenue Code of 1986) for the calendar 
quarter are less than 90 percent of gross 
receipts for the same calendar quarter in 
the prior year, and 
(ii) ending with the calendar quarter 
following the first calendar quarter begin-
ning after a calendar quarter described in 
clause (i) for which gross receipts of such 
employer are greater than 90 percent of 
gross receipts for the same calendar quar-
ter in the prior year. 
(C) TAX-EXEMPT ORGANIZATIONS.—In the 
case of an organization which is described in 
section 501(c) of the Internal Revenue Code of 
1986 and exempt from tax under section 501(a) 
of such Code— 
(i) any reference in this section to a 
trade or business shall be treated as a ref-
erence to the operations of such organiza-
tion which are related to the provision of 
child care assistance (within the meaning 
of subparagraph (A)(i)), and 
(ii) any reference in this section to 
gross receipts shall be treated as a ref-
erence to gross receipts within the meaning 
of section 6033 of the Internal Revenue 
Code of 1986. 
(D) PHASE-IN OF CREDIT WHERE BUSI-
NESS
NOT
SUSPENDED
AND
REDUCTION
IN 
GROSS RECEIPTS LESS THAN 50 PERCENT.— 
(i) IN GENERAL.—In the case of any 
calendar quarter with respect to which an 
eligible employer would not be an eligible 
employer if subparagraph (B)(i) were ap-
plied by substituting ‘‘50 percent’’ for ‘‘90 
percent’’, the amount of the credit allowed 
under subsection (a) shall be reduced by 
the amount which bears the same ratio to 
the amount of such credit (determined 
without regard to this subparagraph) as— 
(I) the excess gross receipts per-
centage point amount, bears to 
(II) 40 percentage points. 
(ii) EXCESS
GROSS
RECEIPTS
PER-
CENTAGE POINT AMOUNT.—For purposes 
of this subparagraph, the term ‘‘excess 
gross receipts percentage point amount’’ 
means, with respect to any calendar quar-
ter, the excess of—
(I) the lowest of the gross re-
ceipts percentage point amounts de-
termined with respect to any calendar 
quarter during the period ending with 
such calendar quarter and beginning 
with the first calendar quarter during 
the period described in subparagraph 
(B), over 
(II) 50 percentage points. 
(iii) GROSS
RECEIPTS
PERCENTAGE 
POINT
AMOUNTS.—For purposes of this 
subparagraph, the term ‘‘gross receipts 
percentage point amount’’ means, with re-
spect to any calendar quarter, the percent-
age (expressed as a number of percentage 
points) obtained by dividing— 
(I) the gross receipts (within the 
meaning of subparagraph (B)) for 
such calendar quarter, by 
(II) the gross receipts for the 
same calendar quarter in calendar 
year 2019. 
(3) QUALIFIED FIXED EXPENSES.— 
(A) IN
GENERAL.—The term ‘‘qualified 
fixed expenses’’ means the payment or accrual,
in the ordinary course of the eligible employer’s 
trade or business, of any covered mortgage obli-
gation, covered rent obligation, or covered util-
ity payment. Such term shall not include the 
prepayment of any obligation for a period in ex-
cess of a month unless the payment for such 
period is customarily due in advance. Such term 
shall not include any payment or accrual of any 
obligation or payment which is with respect to 
property which is not located in the United 
States or any possession of the United States. 
(B) APPLICATION OF DEFINITIONS.—The 
terms ‘‘covered mortgage obligation’’, ‘‘covered 
rent obligation’’, and ‘‘covered utility payment’’ 
shall each have the same meaning as when used 
in section 1106 of the CARES Act. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury or the Secretary’s del-
egate. 
(5) WAGES.— 
(A) IN
GENERAL.—The term ‘‘wages’’ 
means wages (as defined in section 3121(a) of 
the Internal Revenue Code of 1986) and com-
pensation (as defined in section 3231(e) of such 
Code). For purposes of the preceding sentence
(other than for purposes of subsection (b)(2)), 
wages as defined in section 3121(a) of such 
Code shall be determined without regard to 
paragraphs (1), (8), (10), (13), (18), (19), and 
(22) of section 3121(b) of such Code. 
(B) ALLOWANCE
FOR
CERTAIN
HEALTH 
PLAN EXPENSES.— 
(i) IN GENERAL.—Such term shall in-
clude amounts paid or incurred by the eli-
gible employer to provide and maintain a 
group health plan (as defined in section 
5000(b)(1) of the Internal Revenue Code 
of 1986), but only to the extent that such 
amounts are excluded from the gross in-
come of employees by reason of section 
106(a) of such Code. 
(ii) ALLOCATION
RULES.—For pur-
poses of this section, amounts treated as 
wages under clause (i) shall be treated as 
paid with respect to any employee (and 
with respect to any period) to the extent 
that such amounts are properly allocable to 
such employee (and to such period) in such 
manner as the Secretary may prescribe. 
Except as otherwise provided by the Sec-
retary, such allocation shall be treated as 
properly made if made on the basis of 
being pro rata among periods of coverage. 
(6) EMPLOYER.—The term ‘‘employer’’ means 
any employer (as defined in section 3401(d) of such 
Code) of at least one employee on any day in cal-
endar year 2020. 
(7) OTHER TERMS.—Except as otherwise pro-
vided in this section, any term used in this section 
which is also used in chapter 21 or 22 of the Inter-
nal Revenue Code of 1986 shall have the same 
meaning as when used in such chapter. 
(d) AGGREGATION RULE.—All persons treated as a 
single employer under subsection (a) or (b) of section 52 
of the Internal Revenue Code of 1986, or subsection (m) 
or (o) of section 414 of such Code, shall be treated as 
one employer for purposes of this section. 
(e) DENIAL OF DOUBLE BENEFIT.—For purposes of 
chapter 1 of such Code, the gross income of any eligible 
employer, for the taxable year which includes the last day 
of any calendar quarter with respect to which a credit is 
allowed under this section, shall be increased by the 
amount of such credit. 
(f) CERTAIN GOVERNMENTAL EMPLOYERS.—
(1) IN GENERAL.—The credit under this section 
shall not be allowed to the Federal Government, the 
government of any State, of the District of Colum-
bia, or of any possession of the United States, any 
tribal government, or any political subdivision, agen-
cy, or instrumentality of any of the foregoing. 
(2) EXCEPTION.—Paragraph (1) shall not 
apply to any organization described in section 
501(c)(1) of the Internal Revenue Code of 1986 and 
exempt from tax under section 501(a) of such Code. 
(g) ELECTION NOT TO HAVE SECTION APPLY.— 
This section shall not apply with respect to any eligible 
employer for any calendar quarter if such employer elects 
(at such time and in such manner as the Secretary may 
prescribe) not to have this section apply. 
(h) TRANSFERS TO CERTAIN TRUST FUNDS.—There 
are hereby appropriated to the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal Disability 
Insurance Trust Fund established under section 201 of 
the Social Security Act (42 U.S.C. 401) and the Social 
Security Equivalent Benefit Account established under 
section 15A(a) of the Railroad Retirement Act of 1974 
(45 U.S.C. 231n–1(a)) amounts equal to the reduction in 
revenues to the Treasury by reason of this section (without 
regard to this subsection). Amounts appropriated by the
preceding sentence shall be transferred from the general 
fund at such times and in such manner as to replicate 
to the extent possible the transfers which would have oc-
curred to such Trust Fund or Account had this section 
not been enacted. 
(i) TREATMENT OF DEPOSITS.—The Secretary shall 
waive any penalty under section 6656 of such Code for 
any failure to make a deposit of applicable employment 
taxes if the Secretary determines that such failure was due 
to the anticipation of the credit allowed under this section. 
(j) THIRD-PARTY
PAYORS.—Any credit allowed 
under this section shall be treated as a credit described 
in section 3511(d)(2) of such Code. 
(k) REGULATIONS AND GUIDANCE.—The Secretary 
shall issue such forms, instructions, regulations, and guid-
ance as are necessary— 
(1) to allow the advance payment of the credit 
under subsection (a), subject to the limitations pro-
vided in this section, based on such information as 
the Secretary shall require, 
(2) regulations or other guidance to provide for 
the reconciliation of such advance payment with the 
amount of the credit at the time of filing the return 
of tax for the applicable quarter or taxable year,
(3) with respect to the application of the credit 
under subsection (a) to third-party payors (including 
professional employer organizations, certified profes-
sional employer organizations, or agents under sec-
tion 3504 of the Internal Revenue Code of 1986), 
including regulations or guidance allowing such 
payors to submit documentation necessary to sub-
stantiate the eligible employer status of employers 
that use such payors, 
(4) for application of subsection (b)(1)(A) and 
subparagraphs (A)(ii)(II) and (B) of subsection 
(c)(2) in the case of any employer which was not 
carrying on a trade or business for all or part of the 
same calendar quarter in the prior year, and 
(5) for recapturing the benefit of credits deter-
mined under this section in cases where there is a 
subsequent adjustment to the credit determined 
under subsection (a). 
(l) APPLICATION OF SECTION.—This section shall 
apply only to qualified fixed expenses paid or accrued in 
calendar quarters beginning on or after the date of the 
enactment of this Act and before January 1, 2021.
SEC. 405. PAYROLL CREDIT FOR CERTAIN EMPLOYEE DE-
PENDENT CARE EXPENSES PAID BY EMPLOY-
ERS. 
(a) IN GENERAL.—In the case of an employer, there 
shall be allowed as a credit against applicable employment 
taxes for each calendar quarter an amount equal to 30 
percent of the qualified employee dependent care expenses 
paid by such employer with respect to such calendar quar-
ter. 
(b) LIMITATIONS AND REFUNDABILITY.— 
(1) DOLLAR LIMITATION PER EMPLOYEE.—The 
qualified employee dependent care expenses which 
may be taken into account under subsection (a) with 
respect to any employee for any calendar quarter 
shall not exceed $2,500. 
(2) CREDIT LIMITED TO CERTAIN EMPLOYMENT 
TAXES.—The credit allowed by subsection (a) with 
respect to any calendar quarter shall not exceed the 
applicable employment taxes for such calendar quar-
ter (reduced by any credits allowed under sub-
sections (e) and (f) of section 3111 of such Code, 
sections 7001 and 7003 of the Families First 
Coronavirus Response Act, section 2301 of the 
CARES Act, and section 4 of this Act, for such 
quarter) on the wages paid with respect to the em-
ployment of all the employees of the employer for 
such calendar quarter. 
(3) REFUNDABILITY OF EXCESS CREDIT.— 
(A) IN GENERAL.—If the amount of the 
credit under subsection (a) exceeds the limita-
tion of paragraph (2) for any calendar quarter, 
such excess shall be treated as an overpayment 
that shall be refunded under sections 6402(a) 
and 6413(b) of the Internal Revenue Code of 
1986. 
(B) TREATMENT OF PAYMENTS.—For pur-
poses of section 1324 of title 31, United States 
Code, any amounts due to an employer under 
this paragraph shall be treated in the same 
manner as a refund due from a credit provision 
referred to in subsection (b)(2) of such section. 
(4) 
COORDINATION
WITH
GOVERNMENT 
GRANTS.—The qualified employee dependent care 
expenses taken into account under this section by 
any employer shall be reduced by any amounts pro-
vided by any Federal, State, or local government for 
purposes of making or reimbursing such expenses. 
(c) QUALIFIED EMPLOYEE DEPENDENT CARE EX-
PENSES.—For purposes of this section, the term ‘‘quali-
fied employee dependent care expenses’’ means any
amount paid to or for the benefit of an employee in the 
employment of the employer if— 
(1) such amount is dependent care assistance 
(as defined in section 129(e)(1) of the Internal Rev-
enue Code of 1986), and 
(2) the employer elects (at such time and in 
such manner as the Secretary may provide) to treat 
such amount as a qualified employee dependent care 
expense. 
(d) SPECIAL RULES; OTHER DEFINITIONS.— 
(1) APPLICATION OF CERTAIN NON-DISCRIMINA-
TION RULES.—No credit shall be allowed under this 
section to any employer for any calendar quarter if 
qualified employee dependent care expenses are pro-
vided by such employer to employees for such cal-
endar quarter in a manner which discriminates in 
favor of highly compensated individuals (within the 
meaning of section 125) as to eligibility for, or the 
amount of, such benefit expenses. 
(2) DENIAL OF DOUBLE BENEFIT.—For pur-
poses of chapter 1 of such Code, no deduction or 
credit (other than the credit allowed under this sec-
tion) shall be allowed for so much of qualified em-
ployee dependent care expenses as is equal to the 
credit allowed under this section.
(3) THIRD-PARTY PAYORS.—Any credit allowed 
under this section shall be treated as a credit de-
scribed in section 3511(d)(2) of such Code. 
(4) APPLICABLE
EMPLOYMENT
TAXES.—For 
purposes of this section, the term ‘‘applicable em-
ployment taxes’’ means the following: 
(A) The taxes imposed under section 
3111(a) of the Internal Revenue Code of 1986. 
(B) So much of the taxes imposed under 
section 3221(a) of such Code as are attrib-
utable to the rate in effect under section 
3111(a) of such Code. 
(5) SECRETARY.—For purposes of this section, 
the term ‘‘Secretary’’ means the Secretary of the 
Treasury or the Secretary’s delegate. 
(6) CERTAIN TERMS.— 
(A) IN GENERAL.—Any term used in this 
section which is also used in chapter 21 or 22 
of such Code shall have the same meaning as 
when used in such chapter (as the case may 
be). 
(B) CERTAIN
PROVISIONS
NOT
TAKEN 
INTO ACCOUNT EXCEPT FOR PURPOSES OF LIM-
ITING CREDIT TO EMPLOYMENT TAXES.—For 
purposes of subparagraph (A) (other than with
respect to subsection (b)(2)), section 3121(b) of 
such Code shall be applied without regard to 
paragraphs (1), (5), (6), (7), (8), (10), (13), 
(18), (19), and (22) thereof (except with re-
spect to services performed in a penal institu-
tion by an inmate thereof) and section 
3231(e)(1) shall be applied without regard to 
the sentence that begins ‘‘Such term does not 
include remuneration’’. 
(e) CERTAIN GOVERNMENTAL EMPLOYERS.— 
(1) IN GENERAL.—The credit under this section 
shall not be allowed to the Federal Government or 
any agency or instrumentality thereof. 
(2) EXCEPTION.—Paragraph (1) shall not 
apply to any organization described in section 
501(c)(1) of the Internal Revenue Code of 1986 and 
exempt from tax under section 501(a) of such Code. 
(f) TREATMENT OF DEPOSITS.—The Secretary shall 
waive any penalty under section 6656 of such Code for 
any failure to make a deposit of applicable employment 
taxes if the Secretary determines that such failure was due 
to the anticipation of the credit allowed under this section. 
(g) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary
to carry out the purposes of this section, including regula-
tions or other guidance— 
(1) to allow the advance payment of the credit 
determined under subsection (a), subject to the limi-
tations provided in this section, based on such infor-
mation as the Secretary shall require, 
(2) to provide for the reconciliation of such ad-
vance payment with the amount of the credit at the 
time of filing the return of tax for the applicable 
quarter or taxable year, 
(3) for recapturing the benefit of credits deter-
mined under this section in cases where there is a 
subsequent adjustment to the credit determined 
under subsection (a), and 
(4) with respect to the application of the credit 
to third party payors (including professional em-
ployer organizations, certified professional employer 
organizations, or agents under section 3504 of such 
Code), including to allow such payors to submit doc-
umentation necessary to substantiate eligibility for, 
and the amount of, the credit allowed under this sec-
tion. 
(h) APPLICATION OF SECTION.—This section shall 
apply only to qualified employee dependent care expenses
paid in calendar quarters beginning on or after the date 
of the enactment of this Act and before January 1, 2021. 
(i) TRANSFERS TO CERTAIN TRUST FUNDS.—There 
are hereby appropriated to the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal Disability 
Insurance Trust Fund established under section 201 of 
the Social Security Act (42 U.S.C. 401) and the Social 
Security Equivalent Benefit Account established under 
section 15A(a) of the Railroad Retirement Act of 1974 
(45 U.S.C. 231n–1(a)) amounts equal to the reduction in 
revenues to the Treasury by reason of this section (without 
regard to this subsection). Amounts appropriated by the 
preceding sentence shall be transferred from the general 
fund at such times and in such manner as to replicate 
to the extent possible the transfers which would have oc-
curred to such Trust Fund or Account had this section 
not been enacted. 
SEC. 406. FLEXIBILITY FOR DEPENDENT CARE FLEXIBLE 
SPENDING ARRANGEMENTS. 
(a) CARRYOVER OF UNUSED BENEFITS.—A plan or 
other arrangement that otherwise satisfies all applicable 
requirements of sections 106, 125, and 129 of the Internal 
Revenue Code of 1986 (including any rules or regulations 
thereunder) shall not fail to be treated as a cafeteria plan 
or dependent care flexible spending arrangement merely
because such plan or arrangement permits participants to 
carry over (under rules similar to the rules applicable to 
health flexible spending arrangements) an amount, not in 
excess of the amount in effect under section 129(a)(2)(A) 
of such Code, of unused benefits or contributions remain-
ing in a dependent care flexible spending arrangement 
from the plan year ending in 2020 to the plan year ending 
in 2021. 
(b) EXTENSION
OF GRACE PERIODS.—A plan or 
other arrangement that otherwise satisfies all applicable 
requirements of sections 106, 125, or 129 of the Internal 
Revenue Code (including any rules or regulations there-
under) shall not fail to be treated as a cafeteria plan or 
dependent care flexible spending arrangement merely be-
cause such plan or arrangement extends the grace period 
for the plan year ending in 2020 to 12 months after the 
end of such plan year, with respect to unused benefits or 
contributions remaining in a dependent care flexible 
spending arrangement. 
(c) DEFINITIONS.—Any term used in this section 
which is also used in section 106, 125, or 129 of the Inter-
nal Revenue Code of 1986 or the rules or regulations 
thereunder shall have the same meaning as when used in 
such section or rules or regulations.
(d) PLAN AMENDMENTS.—A plan or other arrange-
ment that otherwise satisfies all applicable requirements 
of sections 106, 125, and 129 of the Internal Revenue 
Code of 1986 (including any rules or regulations there-
under) shall not fail to be treated as a cafeteria plan or 
dependent care flexible spending arrangement merely be-
cause such plan or arrangement is amended pursuant to 
a provision under this section and such amendment is ret-
roactive, if— 
(1) such amendment is adopted no later than 
the last day of the plan year in which the amend-
ment is effective, and 
(2) the plan or arrangement is operated con-
sistent with the terms of such amendment during 
the period beginning on the effective date of the 
amendment and ending on the date the amendment 
is adopted. 
SEC. 407. EMPLOYEE RETENTION CREDIT ALLOWED WITH 
RESPECT TO EMPLOYMENT OF DOMESTIC 
WORKERS. 
(a) IN GENERAL.—Section 2301(c)(2) of the CARES 
Act is amended by adding at the end the following new 
subparagraph: 
‘‘(D) EMPLOYERS
OF
DOMESTIC
WORK-
ERS.—In the case of an employer with one or