I
105TH CONGRESS
2D SESSION
H. R. 3176
To amend the Internal Revenue Code of 1986 to allow all taxpayers who
maintain households with dependents a credit for dependents.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 11, 1998
Mr. FRANKS of New Jersey (for himself and Mr. RYUN) 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 allow all
taxpayers who maintain households with dependents a
credit for dependents.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. HOUSEHOLDS WITH DEPENDENTS.
(a) ALLOWANCE OF CREDIT.—Paragraph (1) of sec-
tion 21(a) of the Internal Revenue Code of 1986 (relating
to allowance of credit for expenses for household and de-
pendent care services necessary for gainful employment)
is amended by striking ‘‘employment-related expenses (as
defined in subsection (b)(2)) paid by such individual dur-
ing the taxable year’’ and inserting ‘‘allowable amount’’.
(b) APPLICABLE
PERCENTAGE
DEFINED.—Para-
graph (2) of section 21(a) of such Code (relating to appli-
cable percentage defined) is amended—
(1) by striking ‘‘30 percent reduced (but not
below 20 percent)’’ and inserting ‘‘50 percent’’, and
(2) by striking ‘‘$10,000’’ and inserting
‘‘$30,000’’.
(c) DEFINITION OF QUALIFYING INDIVIDUAL.—Sub-
paragraph (A) of section 21(b)(1) of such Code (relating
to definition of qualifying individual) is amended by strik-
ing ‘‘the age of 13’’ and inserting ‘‘the age of 7’’.
(d) DOLLAR LIMIT.—Subsection (c) of section 21 of
such Code is amended to read as follows:
‘‘(c) ALLOWABLE AMOUNT.—
‘‘(1) IN
GENERAL.—The allowable amount
which may be taken into account under subsection
(a) is the sum of—
‘‘(A) $200 times the number of months in
the taxable year of the taxpayer during which
there is not 1 day on which the taxpayer is
gainfully employed, plus
‘‘(B) the employment-related expenses paid
by the taxpayer during the taxable year.
‘‘(2) LIMITATION.—The amount determined
under paragraph (1) shall not exceed—
‘‘(A) $2,400 if there is 1 qualifying indi-
vidual with respect to the taxpayer for such tax-
able year, or
‘‘(B) $4,800 if there are 2 or more qualify-
ing individuals with respect to the taxpayer for
such taxable year.
‘‘(3) REDUCTION
FOR
EMPLOYER-PROVIDED
DEPENDENT CARE ASSISTANCE.—The amount deter-
mined under paragraph (1) (after the application of
paragraph (2)) shall be reduced by the aggregate
amount excludable from gross income under section
129 for the taxable year.’’
(e) SPECIAL DEPENDENCY TEST IN CASE OF DI-
VORCED PARENTS, ETC.—Subparagraph (B) of section
21(e)(5) of such Code (relating to special dependency test
in case of divorced parents, etc.) is amended by striking
‘‘the age of 13’’ and inserting ‘‘the age of 7’’.
(f) CONFORMING AMENDMENTS.—
(1) The heading for section 21 of such Code is
amended to read as follows:
‘‘SEC. 21. HOUSEHOLDS WITH DEPENDENTS.’’
(2) Paragraph (2) of section 21(d) of such Code
is amended—
(A) in subparagraph (A) by striking ‘‘sub-
section 
(c)(1)’’ 
and 
inserting 
‘‘subsection
(c)(2)(A)’’, and
(B) in subparagraph (B) by striking ‘‘sub-
section 
(c)(2)’’ 
and 
inserting 
‘‘subsection
(c)(2)(B)’’.
(3) Subparagraph (H) of section 6213(g)(2) of
such Code is amended by striking ‘‘expenses for
household and dependent care services necessary for
gainful employment’’ and inserting ‘‘households with
dependents’’.
(g) CLERICAL AMENDMENT.—The item relating to
section 21 in the table of sections for subpart A of part
IV of subchapter A of chapter 1 of such Code is amended
to read as follows:
‘‘Sec. 21. Households with dependents.’’
(h) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1997.
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