Title: A bill to amend the Internal Revenue Code of 1986 to provide an above-the-line deduction for child care expenses, and for other purposes.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to allow taxpayers who do not otherwise itemize their tax deductions a deduction from gross income (above-the-line deduction) for their employment-related expenses incurred in caring for a child under the age of 13 or a child who is physically or mentally incapable of self-care (qualifying child). The deduction is subject to annual limits of $7,000 for taxpayers with one qualifying child or $14,000 for taxpayers with two or more qualifying children. The bill allows an annual inflation adjustment to such amounts for taxable years beginning after 2017.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 598 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 598

To amend the Internal Revenue Code of 1986 to provide an above-the-line 
       deduction for child care expenses, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 9, 2017

  Mrs. Gillibrand (for herself and Mr. Paul) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide an above-the-line 
       deduction for child care expenses, and for other purposes.

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

SECTION 1. ABOVE-THE-LINE DEDUCTION FOR CHILD CARE EXPENSES.

    (a) In General.--Part VII of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 is amended--
            (1) by redesignating section 224 as section 225, and
            (2) by inserting after section 223 the following new 
        section:

``SEC. 224. CHILD CARE DEDUCTION.

    ``(a) Allowance of Deduction.--In the case of an individual for 
which there are 1 or more qualifying children with respect to such 
individual for the taxable year, there shall be allowed as a deduction 
an amount equal to the employment-related expenses paid by such 
individual during the taxable year.
    ``(b) Dollar Limitations.--
            ``(1) In general.--The amount allowed as a deduction under 
        subsection (a) with respect to the taxpayer for any taxable 
        year shall not exceed--
                    ``(A) $7,000, if there is 1 qualifying child with 
                respect to the taxpayer for such taxable year, or
                    ``(B) $14,000, if there are 2 or more qualifying 
                children with respect to the taxpayer for such taxable 
                year.
            ``(2) Adjustment for inflation.--In the case of a taxable 
        year beginning after 2017, each of the dollar amounts in 
        paragraph (1) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                such taxable year begins, determined by substituting 
                `calendar year 2016' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any amount as adjusted under the preceding sentence is not a 
        multiple of $100, such amount shall be rounded to the next 
        highest multiple of $100.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualifying child.--The term `qualifying child' means 
        a dependent of the taxpayer (as defined in section 152(a)(1))--
                    ``(A) who has not attained age 13, or
                    ``(B) who is physically or mentally incapable of 
                caring for himself or herself.
            ``(2) Employment-related expenses.--The term `employment-
        related expenses' has the meaning given such term by section 
        21(b)(2), applied as if the terms `qualifying child' and 
        `qualifying children', within the meaning of this section, were 
        substituted for the terms `qualifying individual' and 
        `qualifying individuals', respectively.
            ``(3) Special rules.--Rules similar to the rules of 
        paragraphs (1), (2), (3), (4), (5), (6), (9), and (10) of 
        section 21(e) shall apply.
    ``(d) Denial of Double Benefit.--
            ``(1) In general.--No deduction shall be allowed under this 
        section for any expense with respect to which a credit is 
        claimed by the taxpayer under section 21.
            ``(2) Coordination rule.--For coordination with a dependent 
        care assistance program, see section 129(e)(7).''.
    (b) Deduction Allowed Above-the-Line.--Subsection (a) of section 62 
of the Internal Revenue Code of 1986 is amended by inserting after 
paragraph (21) the following new paragraph:
            ``(22) Child care deduction.--The deduction allowed by 
        section 224.''.
    (c) Conforming Amendment.--Subsection (e) of section 213 of the 
Internal Revenue Code of 1986 is amended by inserting ``, or as a 
deduction under section 224,'' after ``section 21''.
    (d) Clerical Amendment.--The table of sections for part VII of 
subchapter A of chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking the item relating to section 224 and by inserting 
the following new items:

``Sec. 224. Child care deduction.
``Sec. 225. Cross reference.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred in taxable years beginning after 
December 31, 2016.
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