I 
115TH CONGRESS 
1ST SESSION H. R. 3632 
To amend the Internal Revenue Code of 1986 to make the Child and 
Dependent Care Tax Credit fully refundable, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 28, 2017 
Mr. YODER (for himself and Mrs. MURPHY of Florida) 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 make 
the Child and Dependent Care Tax Credit fully refund-
able, 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. SHORT TITLE. 
This Act may be cited as the ‘‘Promoting Affordable 
Childcare for Everyone Act’’ or the ‘‘PACE Act’’. 
SEC. 2. REFUNDABILITY OF CHILD AND DEPENDENT CARE 
TAX CREDIT. 
(a) IN GENERAL.—The Internal Revenue Code of 
1986 is amended— 
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(1) by redesignating section 21 as section 36C; 
and 
(2) by moving section 36C, as so redesignated, 
from subpart A of part IV of subchapter A of chap-
ter 1 to the location immediately before section 37 
in subpart C of part IV of subchapter A of chapter 
1. 
(b) TECHNICAL AMENDMENTS.— 
(1) Paragraph (1) of section 23(f) of the Inter-
nal Revenue Code of 1986 is amended by striking 
‘‘21(e)’’ and inserting ‘‘36C(e)’’. 
(2) Paragraph (6) of section 35(g) of such Code 
is amended by striking ‘‘21(e)’’ and inserting 
‘‘36C(e)’’. 
(3) Paragraph (1) of section 36C(a) of such 
Code (as redesignated by subsection (a)) is amended 
by striking ‘‘this chapter’’ and inserting ‘‘this sub-
title’’. 
(4) Subparagraph (C) of section 129(a)(2) of 
such Code is amended by striking ‘‘section 21(e)’’ 
and inserting ‘‘section 36C(e)’’. 
(5) Paragraph (2) of section 129(b) of such 
Code is amended by striking ‘‘section 21(d)(2)’’ and 
inserting ‘‘section 36C(d)(2)’’. 
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(6) Paragraph (1) of section 129(e) of such 
Code is amended by striking ‘‘section 21(b)(2)’’ and 
inserting ‘‘section 36C(b)(2)’’. 
(7) Subsection (e) of section 213 of such Code 
is amended by striking ‘‘section 21’’ and inserting 
‘‘section 36C’’. 
(8) Subparagraph (H) of section 6213(g)(2) of 
such Code is amended by striking ‘‘section 21’’ and 
inserting ‘‘section 36C’’. 
(9) Subparagraph (L) of section 6213(g)(2) of 
such Code is amended by striking ‘‘section 21, 24, 
or 32,’’ and inserting ‘‘section 24, 32, or 36C,’’. 
(10) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting 
‘‘36C,’’ after ‘‘36B,’’. 
(11) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by inserting after the 
item relating to section 36B the following: 
‘‘Sec. 36C. Expenses for household and dependent care services necessary for 
gainful employment.’’. 
(12) The table of sections for subpart A of such 
part IV is amended by striking the item relating to 
section 21. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 3. ENHANCEMENT OF THE CHILD AND DEPENDENT 
CARE TAX CREDIT. 
(a) IN GENERAL.—Section 36C of the Internal Rev-
enue Code of 1986, as redesignated by section 2 of this 
Act, is amended— 
(1) in paragraph (1) of subsection (a), by strik-
ing ‘‘35 percent reduced (but not below 20 percent)’’ 
and inserting ‘‘50 percent reduced (but not below 35 
percent)’’; 
(2) by redesignating subsection (f) as sub-
section (g); and 
(3) by inserting after subsection (e) the fol-
lowing new subsection: 
‘‘(f) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after 2017, each of the dollar 
amounts in subsections (a)(2) and (c) shall be in-
creased 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-
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mined by substituting ‘calendar year 2016’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any increase determined 
under paragraph (1) is not a multiple of $50, such 
increase shall be rounded to the nearest multiple of 
$50.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 4. INCREASE IN EXCLUSION FOR EMPLOYER-PRO-
VIDED DEPENDENT CARE ASSISTANCE. 
(a) IN GENERAL.—Subparagraph (A) of section 
129(a)(2) of the Internal Revenue Code of 1986 (relating 
to dependent care assistance programs) is amended by 
striking ‘‘$5,000 ($2,500’’ and inserting ‘‘$7,500 (half 
such dollar amount’’. 
(b) INFLATION ADJUSTMENT.—Paragraph (2) of sec-
tion 129(a) of such Code is amended by redesignating sub-
paragraph (C) as subparagraph (D) and by inserting after 
subparagraph (B) the following new subparagraph: 
‘‘(C) INFLATION
ADJUSTMENT.—In the 
case of any taxable year beginning in a calendar 
year after 2018, the $7,500 amount in subpara-
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