I
103D CONGRESS
2D SESSION
H. R. 5281
To amend the Internal Revenue Code of 1986 to provide a tax credit to
all families with young children, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 7, 1994
Mr. SMITH of Michigan (for himself, Mr. MCCOLLUM, Mr. PETRI, and Mr.
SOLOMON) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
a tax credit to all families with young children, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TAX CREDIT FOR ALL FAMILIES WITH YOUNG
CHILDREN.
(a) GENERAL RULE.—Paragraph (1) of section 21(a)
of the Internal Revenue Code of 1986 is amended to read
as follows:
‘‘(1) IN GENERAL.—In the case of an individual
who maintains a household which includes as a
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member 1 or more qualifying individuals, there shall
be allowed as a credit against the tax imposed by
this chapter for the taxable year an amount equal to
the sum of—
‘‘(A) the applicable percentage of $2,400
for each young qualifying individual, and
‘‘(B) the applicable percentage of the em-
ployment-related expenses paid by such individ-
ual during the taxable year with respect to dis-
abled qualifying individuals.’’
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (1) of section 21(b) of such Code
is amended by striking ‘‘13’’ and inserting ‘‘5’’.
(2) Paragraph (2) of section 21(b) of such Code
is amended—
(A) by striking ‘‘qualifying individuals’’ in
subparagraph (A) and inserting ‘‘disabled quali-
fying individuals’’,
(B) by striking ‘‘qualifying individual’’
each place it appears in subparagraph (A) and
inserting ‘‘disabled qualifying individual’’, and
(C) by amending subparagraph (B) to read
as follows:
‘‘(B) 
EXCEPTION.—Employment-related
expenses described in subparagraph (A) which
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are incurred for services outside the taxpayer’s
household shall be taken into account only if in-
curred for the care of a disabled qualifying indi-
vidual who regularly spends at least 8 hours
each day in the taxpayer’s household.’’
(3) Subsection (b) of section 21 of such Code
is amended by adding at the end the following new
paragraphs:
‘‘(3) YOUNG
QUALIFYING
INDIVIDUAL.—The
term ‘young qualifying individual’ means any quali-
fying individual described in subparagraph (A) of
paragraph (1).
‘‘(4) DISABLED QUALIFYING INDIVIDUAL.—The
term ‘disabled qualifying individual’ means any dis-
qualifying individual described in subparagraph (B)
or (C) of paragraph (1).’’
(4) Subsection (c) of section 21 of such Code
is amended to read as follows:
‘‘(c) LIMITATION ON CREDIT.—The amount of the
credit determined under subsection (a) for any taxable
year shall not exceed—
‘‘(1) the applicable percentage of $2,400, or
‘‘(2) if there are 2 or more qualifying individ-
uals with respect to the taxpayer for such taxable
year, the applicable percentage of $4,800.
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The amount determined under paragraph (1) or (2)
(whichever is applicable) shall be reduced by the applicable
percentage of the aggregate amount excludable from gross
income under section 129 for the taxable year.’’
(5) Subparagraph (B) of section 21(e)(5) of
such Code is amended by striking ‘‘13’’ and insert-
ing ‘‘5’’.
(6) The section heading for section 21 of such
Code is amended to read as follows:
‘‘SEC. 21. CREDIT FOR HOUSEHOLDS WITH YOUNG CHIL-
DREN AND FOR EMPLOYMENT-RELATED EX-
PENSES FOR DISABLED DEPENDENTS.’’
(7) 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 related to section 21
and inserting:
‘‘Sec. 21. Credit for households with young children and for employment-related
expenses for disabled dependents.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
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