289 
‘‘(i) INITIAL THRESHOLD AMOUNT.— 
The 
term 
‘initial 
threshold 
amount’ 
means— 
‘‘(I) $150,000, in the case of a 
joint return or surviving spouse (as 
defined in section 2(a)), 
‘‘(II) 1⁄2 the dollar amount in ef-
fect under subclause (I), in the case of 
a married individual filing a separate 
return, and 
‘‘(III) $112,500, in any other 
case. 
‘‘(ii) 
SECONDARY
THRESHOLD 
AMOUNT.—The term ‘secondary threshold 
amount’ means— 
‘‘(I) $400,000, in the case of a 
joint return or surviving spouse (as 
defined in section 2(a)), 
‘‘(II) $200,000, in the case of a 
married individual filing a separate 
return, and 
‘‘(III) $300,000, in any other 
case. 
‘‘(iii) APPLICABLE TAXABLE YEAR.— 
The term ‘applicable taxable year’ means, 
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with respect to any taxable year for which 
the credit under this section is deter-
mined— 
‘‘(I) such taxable year, or 
‘‘(II) if the taxpayer elects the 
application of this subclause (at such 
time and in such form and manner as 
the Secretary may provide), the pre-
ceding taxable year or the second pre-
ceding taxable year (as specified in 
such election). 
‘‘(iv) MODIFIED ADJUSTED GROSS IN-
COME.—The term ‘modified adjusted gross 
income’ means adjusted gross income in-
creased by any amount excluded from 
gross income under section 911, 931, or 
933. 
‘‘(3) INFLATION ADJUSTMENTS.— 
‘‘(A) MONTHLY SPECIFIED CHILD ALLOW-
ANCE.—In the case of any month beginning 
after December 31, 2026, the $300 amount in 
paragraph (1)(A) shall be increased by an 
amount equal to— 
‘‘(i) such dollar amount, multiplied 
by— 
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‘‘(ii) the percentage (if any) by 
which— 
‘‘(I) the CPI (as defined in sec-
tion 1(f)(4)) for the calendar year 
preceding the calendar year in which 
such month begins, exceeds 
‘‘(II) the CPI (as so defined) for 
calendar year 2025. 
‘‘(B) INITIAL
THRESHOLD
AMOUNT.—In 
the case of any taxable year beginning after De-
cember 31, 2025, the dollar amounts in sub-
clauses (I) and (III) of paragraph (2)(D)(i) 
shall each be increased by an amount equal 
to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the percentage (if any) which 
would be determined under subparagraph 
(A)(ii) if subclause (II) thereof were ap-
plied by substituting ‘2022’ for ‘2024’. 
‘‘(C) ROUNDING.— 
‘‘(i) MONTHLY SPECIFIED CHILD AL-
LOWANCE.—Any increase under subpara-
graph (A) which is not a multiple of $10 
shall be rounded to the nearest multiple of 
$10. 
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292 
‘‘(ii) INITIAL THRESHOLD AMOUNT.— 
Any increase under subparagraph (B) 
which is not a multiple of $5,000 shall be 
rounded to the nearest multiple of $5,000. 
‘‘(c) SPECIFIED CHILD.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘specified child’ 
means, with respect to any taxpayer for any cal-
endar month, an individual— 
‘‘(A) who has the same principal place of 
abode as the taxpayer for more than one-half of 
such month, 
‘‘(B) who is younger than the taxpayer and 
will not, as of the close of such month, have at-
tained age 18, 
‘‘(C) who receives care from the taxpayer 
during such month that is not compensated, 
‘‘(D) who is not the spouse of the taxpayer 
at any time during such month, and 
‘‘(E) who either— 
‘‘(i) is a citizen, national, or resident 
of the United States, or 
‘‘(ii) if the taxpayer is a citizen or na-
tional of the United States, such individual 
is a legally adopted individual of such tax-
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293 
payer or is lawfully placed with such tax-
payer for legal adoption by such taxpayer. 
‘‘(2) CERTAIN
INDIVIDUALS
INELIGIBLE.—In 
the case of an individual who is a specified child 
with respect to another taxpayer for any calendar 
month, such individual shall be treated for such cal-
endar month as having no specified children. 
‘‘(3) CARE FROM THE TAXPAYER.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided by the Secretary, whether any indi-
vidual receives care from the taxpayer (within 
the meaning of paragraph (1)(C)) shall be de-
termined on the basis of facts and cir-
cumstances with respect to the following fac-
tors: 
‘‘(i) The supervision provided by the 
taxpayer regarding the daily activities and 
needs of the individual. 
‘‘(ii) The maintenance by the taxpayer 
of a secure environment at which the indi-
vidual resides. 
‘‘(iii) The provision or arrangement by 
the taxpayer of, and transportation by the 
taxpayer to, medical care at regular inter-
vals and as required for the individual. 
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‘‘(iv) The involvement by the taxpayer 
in, and financial and other support by the 
taxpayer for, educational or similar activi-
ties of the individual. 
‘‘(v) Any other factor that the Sec-
retary determines to be appropriate to de-
termine whether the individual receives 
care from the taxpayer. 
‘‘(B) DETERMINATION OF WHETHER CARE 
IS
COMPENSATED.—For purposes of deter-
mining if care is compensated within the mean-
ing of paragraph (1)(C), compensation from the 
Federal Government, a State or local govern-
ment, a Tribal government, or any possession of 
the United States shall not be taken into ac-
count. 
‘‘(4) APPLICATION OF TIE-BREAKER RULES.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (D), if any individual would (but 
for this paragraph) be a specified child of 2 or 
more taxpayers for any month, such individual 
shall be treated as the specified child only of 
the taxpayer who is— 
‘‘(i) the parent of the individual (or, if 
such individual would (but for this para-
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295 
graph) be a specified child of 2 or more 
parents of the individual for such month, 
the parent of the individual determined 
under subparagraph (B)), 
‘‘(ii) if the individual is not a specified 
child of any parent of the individual (deter-
mined without regard to this paragraph), 
the specified relative of the individual with 
the highest adjusted gross income for the 
taxable year which includes such month, or 
‘‘(iii) if the individual is neither a 
specified child of any parent of the indi-
vidual nor a specified child of any specified 
relative of the individual (in both cases de-
termined without regard to this para-
graph), the taxpayer with the highest ad-
justed gross income for the taxable year 
which includes such month. 
‘‘(B) TIE-BREAKER AMONG PARENTS.—If 
any individual would (but for this paragraph) 
be the specified child of 2 or more parents of 
the individual for any month, such child shall 
be treated only as the specified child of— 
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‘‘(i) the parent with whom the child 
resided for the longest period of time dur-
ing such month, or 
‘‘(ii) if the child resides with both par-
ents for the same amount of time during 
such month, the parent with the highest 
adjusted gross income for the taxable year 
which includes such month. 
‘‘(C) SPECIFIED RELATIVE.—For purposes 
of this paragraph, the term ‘specified relative’ 
means an individual who is— 
‘‘(i) an ancestor of a parent of the 
specified child, 
‘‘(ii) a brother or sister of a parent of 
the specified child, or 
‘‘(iii) a brother, sister, stepbrother, or 
stepsister of the specified child. 
‘‘(D) CERTAIN
PARENTS
OR
SPECIFIED 
RELATIVES NOT TAKEN INTO ACCOUNT.—This 
paragraph shall be applied without regard to 
any parent or specified relative of an individual 
for any month if— 
‘‘(i) such parent or specified relative 
elects to have such individual not be treat-
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ed as a specified child of such parent or 
specified relative for such month, 
‘‘(ii) in the case of a parent of such 
individual, the adjusted gross income of 
the taxpayer (with respect to whom such 
individual would be treated as a specified 
child after application of this subpara-
graph) for the taxable year which includes 
such month is higher than the highest ad-
justed gross income of any parent of the 
individual for any taxable year which in-
cludes such month (determined without re-
gard to any parent with respect to whom 
such individual is not a specified child, de-
termined without regard to subparagraphs 
(A) and (B) and after application of this 
subparagraph), and 
‘‘(iii) in the case of a specified relative 
of such individual, the adjusted gross in-
come of the taxpayer (with respect to 
whom such individual would be treated as 
a specified child after application of this 
subparagraph) for the taxable year which 
includes such month is higher than the 
highest adjusted gross income of any par-
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298 
ent and any specified relative of the indi-
vidual for any taxable year which includes 
such month (determined without regard to 
any parent and any specified relative with 
respect to whom such individual is not a 
specified child, determined without regard 
to subparagraphs (A) and (B) and after 
application of this subparagraph). 
‘‘(E) TREATMENT OF JOINT RETURNS.— 
For purposes of this paragraph, with respect to 
any month, the adjusted gross income of each 
person who files a joint return for the taxable 
year which includes such month is the total ad-
justed gross income shown on the joint return 
for the taxable year. 
‘‘(F) PARENT.—Except as otherwise pro-
vided by the Secretary, the term ‘parent’ shall 
have the same meaning as when used in section 
152(c)(4). 
‘‘(5) TREATMENT OF TEMPORARY ABSENCES.— 
Except as provided in regulations or other guidance 
issued by the Secretary, for purposes of this sub-
section— 
‘‘(A) IN GENERAL.—In the case of any in-
dividual’s temporary absence from such individ-
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299 
ual’s principal place of abode, each day com-
posing the temporary absence shall— 
‘‘(i) be treated as a day at such indi-
vidual’s principal place of abode, 
‘‘(ii) be treated as satisfying the care 
requirement described in paragraph (1)(C) 
for each day described in clause (i), and 
‘‘(iii) not be treated as a day at any 
other location. 
‘‘(B) TEMPORARY
ABSENCE.—For pur-
poses of subparagraph (A), an absence shall be 
treated as temporary if— 
‘‘(i) the individual would have resided 
at the place of abode but for the absence, 
and 
‘‘(ii) 
under 
the 
facts 
and 
cir-
cumstances, it is reasonable to assume that 
the individual will return to reside at the 
place of abode. 
‘‘(6) SPECIAL RULE FOR DIVORCED PARENTS, 
ETC.—Rules similar to the rules section 152(e) shall 
apply for purposes of this subsection. 
‘‘(7) ELIGIBILITY DETERMINED ON BASIS OF 
PRESUMPTIVE ELIGIBILITY.— 
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300 
‘‘(A) IN
GENERAL.—If a period of pre-
sumptive eligibility is established under section 
7527A(c) with respect to any taxpayer and 
child— 
‘‘(i) such child shall be treated as the 
specified child of such taxpayer for any 
month in such period of presumptive eligi-
bility, and 
‘‘(ii) such child shall not be treated as 
the specified child of any other taxpayer 
with respect to whom a period of presump-
tive eligibility has not been established for 
any such month. 
‘‘(B) ABILITY OF CREDIT CLAIMANTS TO 
ESTABLISH PRESUMPTIVE ELIGIBILITY.—Noth-
ing in section 7527A(c) shall be interpreted to 
preclude a taxpayer from establishing a period 
of presumptive eligibility (including any period 
described in subparagraph (D) with respect to 
which payment could be made) with respect to 
any specified child for purposes of this section 
solely because such taxpayer affirmatively elects 
not to receive monthly advance child payments 
under section 7527A. 
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301 
‘‘(C) EXCEPTION FOR INCOME-BASED TIE- 
BREAKER RULES.—If a period of presumptive 
eligibility is established under section 7527A(c) 
for any individual with respect to any taxpayer 
and such individual is not the specified child of 
such taxpayer for any month in such period by 
reason of such taxpayer failing to be described 
in clause (i), (ii), or (iii) of paragraph (4)(A) 
for the taxable year which includes such month, 
subparagraph (A) shall not apply with respect 
to such month. 
‘‘(D) TREATMENT
OF
CERTAIN
RETRO-
ACTIVE PAYMENTS.—If any payment is made 
under subparagraph (A) or (B) of section 
7527A(f)(3) or paragraph (1) or (2) of section 
7527A(g), with respect to any taxpayer and 
child for any period, such period shall be treat-
ed as a period of presumptive eligibility estab-
lished under section 7527A(c) with respect to 
such taxpayer and child for purposes of apply-
ing subparagraph (A). 
‘‘(E) FRAUD
AND
INTENTIONAL
DIS-
REGARD OF RULES OR REGULATIONS.—If the 
Secretary determines that the taxpayer com-
mitted fraud or intentionally disregarded rules 
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302 
or regulations in establishing or maintaining 
any period of presumptive eligibility, the 
months with respect to which such fraud or in-
tentional disregard relates shall not be treated 
as a period of presumptive eligibility for pur-
poses of subparagraph (A). 
‘‘(d) CREDIT REFUNDABLE.—If the taxpayer (in the 
case of a joint return, either spouse) has a principal place 
of abode (determined as provided in section 32) in the 
United States or Puerto Rico for more than one-half of 
any calendar month during the taxable year, so much of 
the credit otherwise allowed under subsection (a) as is at-
tributable to monthly specified child allowances with re-
spect to any such calendar month shall be allowed under 
subpart C (and not allowed under this subpart). 
‘‘(e) IDENTIFICATION REQUIREMENTS.— 
‘‘(1) QUALIFYING CHILD IDENTIFICATION RE-
QUIREMENT.—No credit shall be allowed under this 
section to a taxpayer with respect to any qualifying 
child unless the taxpayer includes the name and tax-
payer identification number of such qualifying child 
on the return of tax for the taxable year and such 
taxpayer identification number was issued on or be-
fore the due date for filing such return. 
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303 
‘‘(2) TAXPAYER
IDENTIFICATION
REQUIRE-
MENT.—No credit shall be allowed under this section 
if the taxpayer identification number of the taxpayer 
was issued after the due date for filing the return 
for the taxable year. 
‘‘(f) RESTRICTIONS ON TAXPAYERS WHO IMPROP-
ERLY
CLAIMED
CREDIT
OR
IMPROPERLY
RECEIVED 
MONTHLY ADVANCE CHILD PAYMENT.— 
‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT 
OR RECKLESS CLAIMS.— 
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section for any taxable year 
(and no payment shall be made under section 
7527A for any month) in the disallowance pe-
riod. 
‘‘(B) DISALLOWANCE
PERIOD.—For pur-
poses of subparagraph (A), the disallowance pe-
riod is— 
‘‘(i) the period of 120 calendar 
months after the most recent calendar 
month for which there was a final deter-
mination that the taxpayer’s claim of cred-
it under this section or section 24 (or pay-
ment received under section 7527A) was 
due to fraud, and 
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‘‘(ii) the period of 24 calendar months 
after the most recent calendar month for 
which there was a final determination that 
the taxpayer’s claim of credit under this 
section or section 24 (or payment received 
under section 7527A) was due to reckless 
or intentional disregard of rules and regu-
lations (but not due to fraud). 
‘‘(2) TAXPAYERS
MAKING
IMPROPER
PRIOR 
CLAIMS.—In the case of a taxpayer who is denied 
credit under this section or section 24 for any tax-
able year as a result of the deficiency procedures 
under subchapter B of chapter 63, no credit shall be 
allowed under this section for any subsequent tax-
able year (and no payment shall be made under sec-
tion 7527A for any subsequent month) unless the 
taxpayer provides such information as the Secretary 
may require to demonstrate eligibility for such cred-
it. 
‘‘(3) COORDINATION
WITH
POSSESSIONS
OF 
THE UNITED STATES.—For purposes of this sub-
section, a taxpayer’s claim of credit under this sec-
tion or section 24 (or payment received under sec-
tion 7527A) includes a claim of credit under this 
section or section 24 of the income tax law of any 
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305 
jurisdiction other than the United States (or similar 
payment received under section 7527A of such in-
come tax law), and a claim made or a payment re-
ceived from American Samoa pursuant to a plan de-
scribed 
in 
subsection 
(h)(3)(B) 
or 
section 
24(k)(3)(B). 
‘‘(g) RECONCILIATION OF CREDIT AND MONTHLY 
ADVANCE CHILD PAYMENTS.— 
‘‘(1) IN GENERAL.—The amount otherwise de-
termined under subsection (a) with respect to any 
taxpayer for any taxable year shall be reduced (but 
not below zero) by the aggregate amount of pay-
ments made under section 7527A to such taxpayer 
for one or more calendar months in such taxable 
year. Any failure to so reduce the credit shall be 
treated as arising out of a mathematical or clerical 
error and assessed according to section 6213(b)(1). 
‘‘(2) INCREASE IN TAX EQUAL TO EXCESS AD-
VANCE PAYMENTS IN CERTAIN CIRCUMSTANCES.—If 
the aggregate amount of payments made to the tax-
payer under section 7527A for one or more calendar 
months in such taxable year exceeds the amount al-
lowed as a credit under subpart C by reason of this 
section with respect to such taxpayer for such tax-
able year (without regard to paragraph (1) of this 
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306 
subsection), the tax imposed by this chapter for such 
taxable year shall be increased by so much of such 
excess as is attributable to one or more of the fol-
lowing: 
‘‘(A) Fraud, or reckless or intentional dis-
regard of rules and regulations, by the tax-
payer. 
‘‘(B) Changes in the taxpayer’s modified 
adjusted gross income or filing status that af-
fect the application of the limitation imposed by 
subsection (b)(2). 
‘‘(C) Payments under section 7527A which 
were made for months which were not part of 
a period of presumptive eligibility. 
‘‘(D) A failure to be the taxpayer described 
in clause (i), (ii), or (iii) of subsection 
(c)(4)(A). 
‘‘(E) A failure to satisfy the requirements 
of subsection (d). 
‘‘(F) A failure to satisfy the requirements 
of paragraphs (1) or (2) of subsection (e), ex-
cept that a failure to satisfy the requirements 
of subsection (e)(1) shall not be taken into ac-
count under this subparagraph if the taxpayer 
demonstrates to the satisfaction of the Sec-
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307 
retary that it is reasonable to expect that the 
qualifying child will be issued a taxpayer identi-
fication number and that the delay in such 
issuance was due to reasonable cause and not 
willful neglect. 
‘‘(G) Such other circumstances as the Sec-
retary identifies for purposes of this subpara-
graph to facilitate the administration and en-
forcement by the Secretary of section 7527A, to 
minimize the amount of advance payments 
made under section 7527A to ineligible individ-
uals, and to prevent abuse. 
‘‘(H) Payments subject to treatment as ex-
cess advance payments after notice under sec-
tion 7527A(j)(2). 
‘‘(3) JOINT
RETURNS.—Except as otherwise 
provided by the Secretary, in the case of an advance 
payment made under section 7527A with respect to 
a joint return, half of such payment shall be treated 
as having been made to each individual filing such 
return. 
‘‘(4) COORDINATION
WITH
POSSESSIONS
OF 
THE UNITED STATES.—For purposes of this sub-
section, payments made under section 7527A include 
payments made by any jurisdiction other than the 
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308 
United States under section 7527A of the income 
tax law of such jurisdiction, and advance payments 
made by American Samoa pursuant to a plan de-
scribed in subsection (h)(3)(B). Any increase in tax 
imposed on a taxpayer by reason of paragraph (2) 
of the income tax law of a jurisdiction other than 
the United States shall be considered to reduce the 
aggregate amount of payments made to such tax-
payer by such jurisdiction. In carrying out this sec-
tion, the Secretary shall coordinate with each posses-
sion of the United States to prevent any application 
of this paragraph that is inconsistent with the pur-
poses of this subsection. 
‘‘(h) APPLICATION OF CREDIT IN POSSESSIONS.— 
‘‘(1) MIRROR CODE POSSESSIONS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
pay to each possession of the United States 
with a mirror code tax system amounts equal to 
the loss (if any) to that possession by reason of 
the application of this section (determined with-
out regard to this subsection) with respect to 
taxable years beginning in calendar years after 
2025. Such amounts shall be determined by the 
Secretary based on information provided by the 
government of the respective possession. 
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‘‘(B) COORDINATION
WITH
CREDIT
AL-
LOWED
AGAINST
UNITED
STATES
INCOME 
TAXES.—No credit shall be allowed under this 
section for any taxable year to any individual to 
whom a credit is allowable against taxes im-
posed by a possession of the United States with 
a mirror code tax system by reason of the appli-
cation of this section in such possession for 
such taxable year. 
‘‘(C) MIRROR
CODE
TAX
SYSTEM.—For 
purposes of this paragraph, the term ‘mirror 
code tax system’ means, with respect to any 
possession of the United States, the income tax 
system of such possession if the income tax li-
ability of the residents of such possession under 
such system is determined by reference to the 
income tax laws of the United States as if such 
possession were the United States. 
‘‘(2) CROSS REFERENCES RELATED TO APPLI-
CATION
OF
CREDIT
TO
RESIDENTS
OF
PUERTO 
RICO.— 
‘‘(A) For application of refundable credit 
to residents of Puerto Rico, see subsection (d). 
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310 
‘‘(B) For application of advance payment 
to residents of Puerto Rico, see section 
7527A(b)(5). 
‘‘(3) AMERICAN SAMOA.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
pay to American Samoa amounts estimated by 
the Secretary as being equal to the aggregate 
benefits that would have been provided to resi-
dents of American Samoa by reason of the ap-
plication of this section for taxable years begin-
ning in calendar years after 2025 if the provi-
sions of this section had been in effect in Amer-
ican Samoa (applied as if American Samoa 
were the United States and without regard to 
the application of this section to residents of 
Puerto Rico under subsection (d)). 
‘‘(B) DISTRIBUTION REQUIREMENT.—Sub-
paragraph (A) shall not apply unless American 
Samoa has a plan, which has been approved by 
the Secretary, under which American Samoa 
will promptly distribute such payments to its 
residents. 
‘‘(C) COORDINATION
WITH
CREDIT
AL-
LOWED
AGAINST
UNITED
STATES
INCOME 
TAXES.— 
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‘‘(i) IN GENERAL.—In the case of a 
taxable year with respect to which a plan 
is approved under subparagraph (B), this 
section (other than this subsection) shall 
not apply to any individual eligible for a 
distribution under such plan. 
‘‘(ii) APPLICATION
OF
SECTION
IN 
EVENT
OF
ABSENCE
OF
APPROVED 
PLAN.—In the case of a taxable year with 
respect to which a plan is not approved 
under subparagraph (B), subsection (d) 
shall be applied by substituting ‘, Puerto 
Rico, or American Samoa’ for ‘or Puerto 
Rico’. 
‘‘(4) TREATMENT
OF
PAYMENTS.—For pur-
poses of section 1324 of title 31, United States 
Code, the payments under this subsection shall be 
treated in the same manner as a refund due from 
a credit provision referred to in subsection (b)(2) of 
such section. 
‘‘(i) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as the Secretary determines 
necessary or appropriate to carry out the purposes of this 
section, including regulations or other guidance— 
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‘‘(1) for determining whether an individual re-
ceives care from a taxpayer for purposes of sub-
section (c)(1)(C), and 
‘‘(2) to coordinate or modify the application of 
this section, section 24, and section 7527A in the 
case of any taxpayer— 
‘‘(A) whose taxable year is other than a 
calendar year, 
‘‘(B) whose filing status for a taxable year 
is different from the status used for deter-
mining one or more monthly payments under 
section 7527A during such taxable year, or 
‘‘(C) whose principal place of abode for 
any month is different from the principal place 
of abode used for determining the monthly pay-
ment under section 7527A for such month. 
‘‘SEC. 24B. CREDIT FOR CERTAIN OTHER DEPENDENTS. 
‘‘(a) IN GENERAL.—There shall be allowed as a cred-
it against the tax imposed by this chapter for the taxable 
year an amount equal to $500 with respect to each speci-
fied dependent of such taxpayer for such taxable year. 
‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN GENERAL.—The amount of the credit 
allowable under subsection (a) shall be reduced (but 
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not below zero) by $50 for each $1,000 (or fraction 
thereof) by which the taxpayer’s modified adjusted 
gross income exceeds the threshold amount. 
‘‘(2) THRESHOLD AMOUNT.—For purposes of 
this 
subsection, 
the 
term 
‘threshold 
amount’ 
means— 
‘‘(A) $400,000, in the case of a joint re-
turn or surviving spouse (as defined in section 
2(a)), 
‘‘(B) $200,000, in the case of a married 
individual filing a separate return, and 
‘‘(C) $300,000, in any other case. 
‘‘(3) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of this subsection, the term ‘modified 
adjusted gross income’ means adjusted gross income 
increased by any amount excluded from gross in-
come under section 911, 931, or 933. 
‘‘(c) SPECIFIED DEPENDENT.—For purposes of this 
section, the term ‘specified dependent’ means, with respect 
to any taxpayer for any taxable year, any dependent of 
such taxpayer (as defined in section 152) for such taxable 
year unless such dependent— 
‘‘(1) is a specified child of the taxpayer, or any 
other taxpayer, for any month during such taxable 
year, or 
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‘‘(2) would not be a dependent if subparagraph 
(A) of section 152(b)(3) were applied without regard 
to all that follows ‘resident of the United States’. 
‘‘(d) SPECIAL RULE FOR TAXABLE YEAR CHILD AT-
TAINS AGE 18.—If any dependent of the taxpayer attains 
age 18 during the taxable year— 
‘‘(1) whether such dependent is a specified de-
pendent shall be determined without regard to para-
graph (1) of subsection (c), and 
‘‘(2) with respect to such dependent, subsection 
(a) shall be applied by substituting an amount for 
‘$500’ that bears the same ratio to $500 as— 
‘‘(A) the excess of— 
‘‘(i) 12, over 
‘‘(ii) the number of months during 
such taxable year with respect to which 
such dependent is a specified child of the 
taxpayer or any other taxpayer, bears to 
‘‘(B) 12. 
‘‘(e) IDENTIFICATION REQUIREMENTS.—Rules simi-
lar to the rules of section 24A(e) shall apply for purposes 
of this section. 
‘‘(f) TAXABLE YEAR MUST BE FULL TAXABLE 
YEAR.—Except in the case of a taxable year closed by rea-
son of the death of the taxpayer, no credit shall be allow-
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able under this section in the case of a taxable year cov-
ering a period of less than 12 months. 
‘‘(g) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as the Secretary determines 
necessary or appropriate to carry out the purposes of this 
section.’’. 
(b) MONTHLY PAYMENT OF CHILD TAX CREDIT.— 
Section 7527A is amended to read as follows: 
‘‘SEC. 7527A. MONTHLY PAYMENTS OF CHILD TAX CREDIT. 
‘‘(a) IN GENERAL.—The Secretary shall pay to each 
taxpayer, during each calendar month which is during a 
period of presumptive eligibility with respect to the tax-
payer and any child, an amount equal to the monthly ad-
vance child payment determined with respect to such tax-
payer for such month. 
‘‘(b) MONTHLY ADVANCE CHILD PAYMENT.—The 
term ‘monthly advance child payment’ means, with respect 
to any taxpayer for any calendar month, the amount (if 
any) which is estimated by the Secretary as being equal 
to the monthly specified child allowance which would be 
determined under section 24A(b) with respect to such tax-
payer for such calendar month if— 
‘‘(1) the only specified children of such taxpayer 
for such calendar month are the specified children of 
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such taxpayer for the reference month (determined 
without regard to section 24A(c)(7)), 
‘‘(2) the ages of such children (and the status 
of such children as specified children) are deter-
mined for such calendar month by taking into ac-
count the passage of time since such reference 
month, 
‘‘(3) each child is only taken into account as a 
specified child for such calendar month if such cal-
endar month is during a period of presumptive eligi-
bility with respect to the taxpayer and such child, 
‘‘(4) the limitations of section 24A(b)(2) were 
applied with respect to the reference taxable year 
rather than with respect to the applicable taxable 
year, and 
‘‘(5) no monthly specified child allowance were 
determined with respect to such taxpayer for such 
calendar month unless the taxpayer (in the case of 
a joint return, either spouse) has a principal place 
of abode (determined as provided in section 32) in 
the United States or Puerto Rico for more than one- 
half of the reference month. 
‘‘(c) PERIOD OF PRESUMPTIVE ELIGIBILITY.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘period of presumptive eligibility’ 
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means, with respect to any taxpayer and any child, 
the period— 
‘‘(A) beginning with the calendar month 
following the calendar month during which the 
taxpayer provides the Secretary with sufficient 
information for the Secretary to— 
‘‘(i) determine that such child was a 
specified child of the taxpayer for the ref-
erence month (determined without regard 
to section 24A(c)(7)), and 
‘‘(ii) estimate the monthly advance 
child payment for such calendar month, 
and 
‘‘(B) ending with the earliest of— 
‘‘(i) the month beginning immediately 
after the month on which the Secretary 
sends the taxpayer a written notice that 
the taxpayer’s period of presumptive eligi-
bility with respect to such child is being 
terminated by reason of information known 
to the Secretary (including a failure to pro-
vide annual information under paragraph 
(2)) which casts doubt on such taxpayer’s 
status as being allowed the monthly speci-
fied child allowance under section 24A for 
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such child (determined without regard to 
section 24A(c)(7)) with respect to one or 
more 
months 
following 
the 
reference 
month, 
‘‘(ii) any month with respect to which 
the taxpayer notifies the Secretary that 
such taxpayer is not allowed a monthly 
specified child allowance for such month 
under section 24A(b) (determined without 
regard to section 24A(c)(7)), and 
‘‘(iii) the month beginning imme-
diately before the first month of a new pe-
riod of presumptive eligibility with respect 
to such taxpayer and such child which is 
established on the basis of a reference 
month more recent than the reference 
month with respect to which such prior pe-
riod was established (including on the basis 
of an annual renewal described in para-
graph (2)). 
‘‘(2) ANNUAL RENEWAL.—The Secretary shall 
terminate a taxpayer’s period of presumptive eligi-
bility with respect to any child under paragraph 
(1)(B)(i) unless such taxpayer provides information 
sufficient to establish a new period of presumptive 
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