SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Family Tax Reduction
Act of 1999’’.
SEC. 2. INCREASE OF STANDARD DEDUCTION FOR JOINT
RETURNS TO END MARRIAGE PENALTY.
(a) IN GENERAL.—Paragraph (2) of section 63(c) of
the Internal Revenue Code of 1986 (relating to basic
standard deduction) is amended to read as follows:
‘‘(2) BASIC STANDARD DEDUCTION.—For pur-
poses of paragraph (1), the basic standard deduction
is—
‘‘(A) $8,600 in the case of—
‘‘(i) a joint return, or
‘‘(ii) a surviving spouse (as defined in
section 2(a)),
‘‘(B) $6,350 in the case of a head of
household (as defined in section 2(b)), and
‘‘(C) 1⁄2 the dollar amount applicable under
subparagraph (A) in any other case.’’
(b) INFLATION ADJUSTMENT.—Paragraph (4) of sec-
tion 63(c) of such Code is amended to read as follows:
‘‘(4) ADJUSTMENTS FOR INFLATION.—
‘‘(A) ADJUSTMENT
OF
BASIC
STANDARD
DEDUCTION.—In the case of any taxable year
beginning in a calendar year after 2000, each
dollar amount contained in paragraph (2) 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 by substituting ‘calendar year 1999’
for ‘calendar year 1992’ in subparagraph
(B) thereof.
‘‘(B) 
ADJUSTMENT
OF
OTHER
AMOUNTS.—In the case of any taxable year be-
ginning in a calendar year after 1988, each dol-
lar amount contained in paragraph (5)(A) or
subsection (f) 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 by substituting ‘calendar year 1987’
for ‘calendar year 1992’ in subparagraph
(B) thereof.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 3. INCREASE IN DEDUCTION FROM ESTATE TAX FOR
FAMILY-OWNED FARMS AND OTHER FAMILY-
OWNED BUSINESS INTERESTS.
(a) IN GENERAL.—Subsection (a) of section 2057 of
the Internal Revenue Code of 1986 (relating to family-
owned business interests) is amended—
(1) in paragraph (2), by striking ‘‘$675,000’’
and inserting ‘‘$5,000,000’’; and
(2) by striking paragraph (3).
(b) CHANGE IN PERIOD OF OWNERSHIP AND MATE-
RIAL
PARTICIPATION.—Subparagraph (D) of section
2057(b)(1) of such Code (relating to estates to which sec-
tion applies) is amended—
(1) by striking ‘‘8-year period’’ and inserting
‘‘7-year period’’; and
(2) by striking ‘‘5 years’’ and inserting ‘‘4
years’’.
(c) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to estates of decedents dying
after December 31, 2000.
SEC. 4. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE
NEEDS.
(a) ALLOWANCE OF CREDIT.—
(1) IN GENERAL.—Section 24(a) of the Internal
Revenue Code of 1986 (relating to allowance of child
tax credit) is amended to read as follows:
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the sum of—
‘‘(1) $500 multiplied by the number of quali-
fying children of the taxpayer, plus
‘‘(2) $1,000 multiplied by the number of appli-
cable individuals with respect to whom the taxpayer
is an eligible caregiver for the taxable year.
In any case in which the applicable individual and the eli-
gible caregiver are the same individual, the credit allowed
by paragraph (2) with respect to such individual shall not
exceed the aggregate amount paid by the taxpayer during
the taxable year (not compensated for by insurance or oth-
erwise) for qualified long-term care services (as defined
in section 7702B(c)) for such individual.’’
(2) ADDITIONAL CREDIT FOR TAXPAYER WITH
3 OR MORE SEPARATE CREDIT AMOUNTS.—So much
of section 24(d) of such Code as precedes paragraph
(1)(A) thereof is amended to read as follows:
‘‘(d) ADDITIONAL CREDIT FOR TAXPAYERS WITH 3
OR MORE SEPARATE CREDIT AMOUNTS.—
‘‘(1) IN GENERAL.—If the sum of the number
of qualifying children of the taxpayer and the num-
ber of applicable individuals with respect to which
the taxpayer is an eligible caregiver is 3 or more for
any taxable year, the aggregate credits allowed
under subpart C shall be increased by the lesser
of—’’.
(3) CONFORMING AMENDMENTS.—
(A) The heading for section 32(n) of such
Code is amended by striking ‘‘CHILD’’ and in-
serting ‘‘FAMILY CARE’’.
(B) The heading for section 24 is amended
to read as follows:
‘‘SEC. 24. FAMILY CARE CREDIT.’’
(C) The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such
Code is amended by striking the item relating
to section 24 and inserting the following new
item:
‘‘Sec. 24. Family care credit.’’.
(b) DEFINITIONS.—Section 24(c) of such Code (de-
fining qualifying child) is amended to read as follows:
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFYING CHILD.—
‘‘(A) IN GENERAL.—The term ‘qualifying
child’ means any individual if—
‘‘(i) the taxpayer is allowed a deduc-
tion under section 151 with respect to such
individual for the taxable year,
‘‘(ii) such individual has not attained
the age of 17 as of the close of the cal-
endar year in which the taxable year of the
taxpayer begins, and
‘‘(iii) such individual bears a relation-
ship to the taxpayer described in section
32(c)(3)(B).
‘‘(B) EXCEPTION FOR CERTAIN NONCITI-
ZENS.—The term ‘qualifying child’ shall not in-
clude any individual who would not be a de-
pendent if the first sentence of section
152(b)(3) were applied without regard to all
that follows ‘resident of the United States’.
‘‘(2) APPLICABLE INDIVIDUAL.—
‘‘(A) IN GENERAL.—The term ‘applicable
individual’ means, with respect to any taxable
year, any individual who has been certified, be-
fore the due date for filing the return of tax for
the taxable year (without extensions), by a phy-
sician (as defined in section 1861(r)(1) of the
Social Security Act) as being an individual with
long-term care needs described in subparagraph
(B) for a period—
‘‘(i) which is at least 180 consecutive
days, and
able to perform at least 1 activity of
daily living (as so defined).
‘‘(ii) 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 substantial assistance from an-
other individual) at least 2 of the following
activities: eating, transferring, or mobility.
‘‘(iii) The individual is under 2 years
of age and requires specific durable med-
ical equipment by reason of a severe health
condition or requires a skilled practitioner
trained to address the individual’s condi-
tion to be available if the individual’s par-
ents or guardians are absent.
‘‘(3) ELIGIBLE CAREGIVER.—
‘‘(A) IN GENERAL.—A taxpayer shall be
treated as an eligible caregiver for any taxable
year with respect to the following individuals:
‘‘(i) The taxpayer.
‘‘(ii) The taxpayer’s spouse.
‘‘(iii) An individual with respect to
whom the taxpayer is allowed a deduction
under section 151 for the taxable year.
‘‘(iv) An individual who would be de-
scribed in clause (iii) for the taxable year
if section 151(c)(1)(A) were applied by
substituting for the exemption amount an
amount equal to the sum of the exemption
amount, the standard deduction under sec-
tion 63(c)(2)(C), and any additional stand-
ard deduction under section 63(c)(3) which
would be applicable to the individual if
clause (iii) applied.
‘‘(v) An individual who would be de-
scribed in clause (iii) for the taxable year
if—
‘‘(I) the requirements of clause
(iv) are met with respect to the indi-
vidual, and
‘‘(II) the requirements of sub-
paragraph (B) are met with respect to
the individual in lieu of the support
test of section 152(a).
‘‘(B) RESIDENCY
TEST.—The require-
ments of this subparagraph are met if an indi-
vidual has as his principal place of abode the
home of the taxpayer and—
‘‘(i) in the case of an individual who
is an ancestor or descendant of the tax-
payer or the taxpayer’s spouse, is a mem-
ber of the taxpayer’s household for over
half the taxable year, or
‘‘(ii) in the case of any other indi-
vidual, is a member of the taxpayer’s
household for the entire taxable year.
‘‘(C) SPECIAL RULES WHERE MORE THAN
1 ELIGIBLE CAREGIVER.—
‘‘(i) IN GENERAL.—If more than 1 in-
dividual is an eligible caregiver with re-
spect to the same applicable individual for
taxable years ending with or within the
same calendar year, a taxpayer shall be
treated as the eligible care giver if each
such individual (other than the taxpayer)
files a written declaration (in such form
and manner as the Secretary may pre-
scribe) that such individual will not claim
such applicable individual for the credit
under this section.
‘‘(ii) NO AGREEMENT.—If each indi-
vidual required under clause (i) to file a
written declaration under clause (i) does
not do so, the individual with the highest
modified adjusted gross income (as defined
in section 32(c)(5)) shall be treated as the
eligible caregiver.
‘‘(iii) MARRIED
INDIVIDUALS
FILING
SEPARATELY.—In the case of married indi-
viduals filing separately, the determination
under this subparagraph as to whether the
husband or wife is the eligible caregiver
shall be made under the rules of clause (ii)
(whether or not one of them has filed a
written declaration under clause (i)).’’.
(c) IDENTIFICATION REQUIREMENTS.—
(1) IN GENERAL.—Section 24(e) of such Code
is amended by adding at the end the following new
sentence: ‘‘No credit shall be allowed under this sec-
tion to a taxpayer with respect to any applicable in-
dividual unless the taxpayer includes the name and
taxpayer identification number of such individual,
and the identification number of the physician certi-
fying such individual, on the return of tax for the
taxable year.’’.
(2) ASSESSMENT.—Section 6213(g)(2)(I) of
such Code is amended—
(A) by inserting ‘‘or physician identifica-
tion’’ after ‘‘correct TIN’’, and
(B) by striking ‘‘child’’ and inserting
‘‘family care’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 5. EXPANSION OF CHILD AND DEPENDENT CARE TAX
CREDIT.
(a) INCREASE OF MAXIMUM CREDIT RATE.—Para-
graph (2) of section 21(a) of the Internal Revenue Code
of 1986 (relating to expenses for household and dependent
care services necessary for gainful employment) is amend-
ed to read as follows:
‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For
purposes of paragraph (1), the term ‘applicable per-
centage’ means 50 percent reduced (but not below
20 percent) by 1 percentage point for each $1,000
(or fraction thereof) by which the taxpayer’s ad-
justed gross income for the taxable year exceeds
$30,000.’’.
(b) CREDIT ALLOWED BASED
ON RESIDENCY
IN
CERTAIN CASES.—Subsection (e) of section 21 of such
Code is amended by adding at the end the following new
paragraph: