I 
108TH CONGRESS 
2D SESSION 
H. R. 4748 
To amend the Internal Revenue Code of 1986 to modify and make refundable 
the credit for expenses for household and dependent care services nec-
essary for gainful employment. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 25, 2004 
Mr. PORTER 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 modify 
and make refundable the credit for expenses for house-
hold and dependent care services necessary for gainful 
employment. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. REFUNDABLE CREDIT FOR EXPENSES FOR 
HOUSEHOLD AND DEPENDENT CARE SERV-
ICES NECESSARY FOR GAINFUL EMPLOY-
MENT. 
(a) $3,000 PER CHILD LIMIT.—Paragraphs (1) and 
(2) of section 21(c) of the Internal Revenue Code of 1986
(relating to dollar limit on amount creditable) are amend-
ed to read as follows: 
‘‘(1) $3,000, multiplied by 
‘‘(2) the number of qualifying individuals with 
respect to the taxpayer for such taxable year.’’. 
(b) MODIFICATION OF ADJUSTED GROSS INCOME 
LIMITATION.— 
(1) IN
GENERAL.—Paragraph (2) of section 
21(a) of such Code is amended to read as follows: 
‘‘(2) ADJUSTED GROSS INCOME LIMITATION.— 
The amount of the credit allowable under paragraph 
(1) shall be reduced (but not below zero) by $50 for 
each $1,000 (or fraction thereof) by which the tax-
payer’s adjusted gross income exceeds $125,000 
(twice such amount in the case of a joint return).’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
21(a)(1) of such Code is amended by striking ‘‘ap-
plicable percentage’’ and inserting ‘‘35 percent’’. 
(c) INFLATION ADJUSTMENT.—Subsection (e) of sec-
tion 21 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 in a calendar year after 
2004, the $125,000 amount contained in subsection 
(a)(2) and the $3,000 amount contained in sub-
section (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 ‘2003’ for ‘1992’ in sub-
paragraph (B) thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$50.’’. 
(d) CREDIT MADE REFUNDABLE.— 
(1) CREDIT MOVED TO SUBPART RELATING TO 
REFUNDABLE
CREDITS.—The 
Internal 
Revenue 
Code of 1986 is amended— 
(A) by redesignating section 36 as section 
37, 
(B) by redesignating section 21, as amend-
ed by this Act, as section 36, and 
(C) by moving section 36 (as so redesig-
nated) from subpart A of part IV of subchapter 
A of chapter 1 to the location immediately be-
fore section 37 (as so redesignated) in subpart 
C of part IV of subchapter A of chapter 1. 
(2) CONFORMING AMENDMENTS.—
(A) Paragraph (2) of section 1324(b) of 
title 31, United States Code, is amended by in-
serting ‘‘or 36’’ after ‘‘section 35’’. 
(B) The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of the In-
ternal Revenue Code of 1986 is amended by 
striking the item relating to section 21. 
(C) The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of the In-
ternal Revenue Code of 1986 is amended by 
striking the last item and inserting the fol-
lowing new items: 
‘‘Sec. 36. Expenses for household and dependent care services 
necessary for gainful employment.’’. 
‘‘Sec. 37. Overpayments of tax.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
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