Special Needs Tax Credit Act
Bill: H.R.3819 | Sponsor: Rep. Deutch, Theodore E. (D-FL)
Policy area: Taxation

Summary:
Special Needs Tax Credit Act
This bill allows an income-based tax credit, up to $5,000 in a taxable year, for legal expenses paid to establish a legal guardianship of a disabled family member.

To amend the Internal Revenue Code of 1986 to provide a credit to 
   individuals for legal expenses paid with respect to establishing 
           guardianship of a family member with disabilities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Special Needs Tax Credit Act''.

SEC. 2. CREDIT FOR LEGAL EXPENSES PAID WITH RESPECT TO ESTABLISHING 
              GUARDIANSHIP OF A FAMILY MEMBER WITH DISABILITIES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 36B the following new section:

``SEC. 36C. CREDIT FOR LEGAL EXPENSES PAID WITH RESPECT TO ESTABLISHING 
              GUARDIANSHIP OF A FAMILY MEMBER WITH DISABILITIES.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this subtitle an amount 
equal to the qualified legal guardianship expenses paid or incurred by 
the taxpayer during the taxable year.
    ``(b) Dollar Limitation.--The credit allowed under subsection (a) 
to any taxpayer with respect to any family member with disabilities for 
any taxable year shall not exceed the excess of--
            ``(1) $5,000, over
            ``(2) the aggregate amount allowed as credit under 
        subsection (a) to such taxpayer with respect to such family 
        member with disabilities for all prior taxable years.
    ``(c) Phaseout Based on Adjusted Gross Income.--The dollar 
limitation applicable under subsection (b) shall be reduced by the 
amount which bears the same ratio to such dollar limitation (determined 
without regard to this subsection) as--
            ``(1) the excess of--
                    ``(A) the taxpayer's adjusted gross income, over
                    ``(B) $35,000 (twice such amount in the case of a 
                joint return), bears to
            ``(2) $10,000 (twice such amount in the case of a joint 
        return).
    ``(d) Qualified Legal Guardianship Expenses.--For purposes of this 
section, the term `qualified legal guardianship expenses' means amounts 
paid or incurred by an individual as legal expenses in establishing 
such individual as the legal guardian of a family member with 
disabilities.
    ``(e) Family Member With Disabilities.--For purposes of this 
section, the term `family member with disabilities' means, with respect 
to any taxpayer, any individual who--
            ``(1) bears a relationship to the taxpayer described in 
        section 152(d)(2) (other than subparagraph (H) thereof), and
            ``(2) is disabled (within the meaning of section 1614(a)(3) 
        of the Social Security Act).''.
    (b) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36C,'' after ``36B,''.
            (2) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``36C,'' after ``36B,''.
            (3) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36B 
        the following new item:

``Sec. 36C. Credit for legal expenses paid with respect to establishing 
                            guardianship of a family member with 
                            disabilities.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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