‘‘(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 ‘calendar year 2009’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any amount as adjusted 
under subparagraph (A) is not a multiple of $100, 
such amount shall be rounded to the next lowest 
multiple of $100. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary to carry out the pur-
poses of this section.’’. 
(b) DEDUCTIBLE WHETHER
OR NOT TAXPAYER 
ITEMIZES.—Subsection (a) of section 62 of such Code (de-
fining adjusted gross income) is amended by inserting 
after paragraph (21) the following new paragraph: 
‘‘(22) EXPENSES
FOR
HOUSEHOLD
AND
DE-
PENDENT CARE SERVICES NECESSARY FOR GAINFUL 
EMPLOYMENT.—The deduction allowed by section 
224.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Subsection (e) of section 213 is amended by 
inserting ‘‘or deduction under section 224’’ after 
‘‘section 21’’. 
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(2) Paragraph (2) of section 6213(g) is amend-
ed— 
(A) by striking ‘‘or’’ in subparagraph (H) 
and inserting ‘‘, section 224 (relating to ex-
penses for household and dependent care serv-
ices necessary for gainful employment), or’’, 
and 
(B) by striking ‘‘or 6428’’ in subparagraph 
(L) and inserting ‘‘224, or 6428’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenses paid in taxable years 
beginning after the date of the enactment of this Act. 
SEC. 3. MODIFICATION OF CREDIT FOR EXPENSES FOR 
HOUSEHOLD AND DEPENDENT CARE SERV-
ICES NECESSARY FOR GAINFUL EMPLOY-
MENT. 
(a) IN GENERAL.— 
(1) INCREASE
IN
CREDIT
LIMITATION.—Sub-
section (c) of section 21 of the Internal Revenue 
Code of 1986 (relating to dollar limit on amount 
creditable) is amended— 
(A) by striking ‘‘$3,000’’ in paragraph (1) 
and inserting ‘‘13,000’’, and 
(B) by striking ‘‘$6,000’’ in paragraph (2) 
and inserting ‘‘200 percent of the dollar 
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amount in effect under paragraph (1) for the 
taxable year’’. 
(2) INFLATION
ADJUSTMENT.—Section 21 of 
such Code is amended by redesignating subsection 
(f) as subsection (g) and inserting after subsection 
(e) the following new subsection: 
‘‘(f) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of a taxable 
year beginning after 2010, the dollar amount under 
subsection (a)(1) shall 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 ‘calendar year 2009’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any amount as adjusted 
under subparagraph (A) is not a multiple of $100, 
such amount shall be rounded to the next lowest 
multiple of $100.’’. 
(3) INCREASE
IN
DEEMED
EARNED
INCOME 
AMOUNTS.—Paragraph (2) of section 21(d) of such 
Code (relating to special rules for spouse who is a 
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student or incapable of caring for himself) is amend-
ed— 
(A) by striking ‘‘$250 if subsection (c)(1)’’ 
in subparagraph (A) and inserting ‘‘1⁄12 of the 
amount in effect under subsection (c)(1) if such 
subsection’’, and 
(B) by striking ‘‘$500 if subsection (c)(2)’’ 
in subparagraph (B) and inserting ‘‘1⁄12 of the 
amount in effect under subsection (c)(2) if such 
subsection’’. 
(b) COORDINATION WITH DEDUCTION FOR EMPLOY-
MENT-RELATED EXPENSES.—Subsection (e) of section 21 
of such Code (relating to special rules) is amended by add-
ing at the end the following new paragraph: 
‘‘(11) ELECTION TO HAVE SECTION APPLY.— 
This section shall apply to any taxpayer for any tax-
able year only if such taxpayer elects (at such time 
and in such manner as the Secretary may by regula-
tions prescribe) to have this section apply for such 
taxable year.’’. 
(c) CREDIT MADE REFUNDABLE.— 
(1) CREDIT MOVED TO SUBPART RELATING TO 
REFUNDABLE CREDITS.—Such Code is amended— 
(A) by redesignating section 21, as amend-
ed by this section, as section 36B, and 
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(B) by moving section 36B (as so redesig-
nated) from subpart A of part IV of subchapter 
A of chapter 1 to the location immediately be-
fore section 37 in subpart C of part IV of sub-
chapter A of chapter 1. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 224(b) of such Code, as added by 
this Act, is amended— 
(A) by striking ‘‘section 21(b)’’ in para-
graph (1) and inserting ‘‘section 36B(b)’’, 
(B) by striking ‘‘section 21’’ in paragraph 
(2)(B) and inserting ‘‘section 36B’’, 
(C) by striking ‘‘section 21(b)(1)(C)’’ in 
paragraph 
(3) 
and 
inserting 
‘‘section 
36B(b)(1)(C)’’, and 
(D) by striking ‘‘section 21’’ in paragraph 
(4) and inserting ‘‘section 36B’’. 
(2) Subsection (e) of section 213 of such Code 
is amended by striking ‘‘section 21’’ and inserting 
‘‘section 36B’’. 
(3) Paragraph (2) of section 6213(g) of such 
Code is amended by striking ‘‘section 21’’ each place 
it appears and inserting ‘‘section 36B’’. 
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