Title: Child and Dependent Care Tax Credit Enhancement Act of 2019
Policy area: Taxation

Summary:
Child and Dependent Care Tax Credit Enhancement Act of 2019
This bill modifies the tax credit for employment-related expenses incurred for the care of a taxpayer's dependent to (1) increase to $120,000, the adjusted gross income threshold level above which the credit is incrementally reduced; (2) increase the dollar limits on the allowable amount of the credit; (3) specify rules for married couples filing separate returns; (4) allow an inflation adjustment to the adjusted gross income threshold and the maximum credit amounts, beginning after 2020; and (5) make the credit refundable.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1967 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 1967

  To amend the Internal Revenue Code of 1986 to enhance the Child and 
    Dependent Care Tax Credit and make the credit fully refundable.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 28, 2019

Mr. Danny K. Davis of Illinois (for himself and Ms. DelBene) 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 enhance the Child and 
    Dependent Care Tax Credit and make the credit fully refundable.

    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 ``Child and Dependent Care Tax Credit 
Enhancement Act of 2019''.

SEC. 2. ENHANCEMENT OF CHILD AND DEPENDENT CARE TAX CREDIT.

    (a) In General.--Section 21(a)(2) of the Internal Revenue Code of 
1986 is amended to read as follows:
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the term `applicable percentage' means 50 percent reduced 
        (but not below 20 percent) by 1 percentage point for each 
        $2,000 (or fraction thereof) by which the taxpayer's adjusted 
        gross income for the taxable year exceeds $120,000.''.
    (b) Increase in Dollar Limit on Amount Creditable.--Section 21(c) 
of such Code is amended--
            (1) in paragraph (1), by striking ``$3,000'' and inserting 
        ``$6,000'', and
            (2) in paragraph (2), by striking ``$6,000'' and inserting 
        ``$12,000''.
    (c) Special Rule for Married Couples Filing Separate Returns.--
Section 21(e)(2) of such Code is amended to read as follows:
            ``(2) Married couples filing separate returns.--
                    ``(A) In general.--In the case of a married 
                individual who files a separate return for a taxable 
                year--
                            ``(i) the limits under subsections (a) and 
                        (c) shall be applied to the individual and the 
                        individual's spouse as if they had filed a 
                        joint return, and
                            ``(ii) the aggregate amount of the credit 
                        allowed under this section for such taxable 
                        year to both spouses shall not exceed the 
                        amount that would have been allowed if the 
                        spouses had filed a joint return.
                    ``(B) Regulations.--The Secretary shall prescribed 
                such regulations or other guidance as is necessary to 
                carry out the purposes of this subsection.''.
    (d) Adjustment for Inflation.--Section 21 of such Code is amended--
            (1) by redesignating subsection (f) as subsection (g), and
            (2) by inserting after subsection (e) the following new 
        subsection:
    ``(f) Inflation Adjustment.--
            ``(1) In general.--In the case of a calendar year beginning 
        after 2020, the $120,000 amount in paragraph (2) of subsection 
        (a) and the dollar amounts in subsection (c) shall each 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 
                the taxable year begins, determined by substituting 
                `calendar year 2019' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
            ``(2) Rounding.--If any dollar amount, after being 
        increased under paragraph (1), is not a multiple of $100, such 
        dollar amount shall be rounded to the next lowest multiple of 
        $100.''.
    (e) Credit To Be Refundable.--
            (1) In general.--The Internal Revenue Code of 1986 is 
        amended--
                    (A) by redesignating section 21 as section 36C, and
                    (B) by moving section 36C, as so redesignated, from 
                subpart A of part IV of subchapter A of chapter 1 to 
                the location immediately before section 37 in subpart C 
                of part IV of subchapter A of chapter 1.
            (2) Technical amendment.--
                    (A) Section 23(f)(1) of the Internal Revenue Code 
                of 1986 is amended by striking ``21(e)'' and inserting 
                ``36C(e)''.
                    (B) Section 35(g)(6) of such Code is amended by 
                striking ``21(e)'' and inserting ``36C(e)''.
                    (C) Section 36C(a)(1) of such Code (as redesignated 
                by paragraph (1)) is amended by striking ``this 
                chapter'' and inserting ``this subtitle''.
                    (D) Section 129(a)(2)(C) of such Code is amended by 
                striking ``section 21(e)'' and inserting ``section 
                36C(e)''.
                    (E) Section 129(b)(2) of such Code is amended by 
                striking ``section 21(d)(2)'' and inserting ``section 
                36C(d)(2)''.
                    (F) Section 129(e)(1) of such Code is amended by 
                striking ``section 21(b)(2)'' and inserting ``section 
                36C(b)(2)''.
                    (G) Section 213(e) of such Code is amended by 
                striking ``section 21'' and inserting ``section 36C''.
                    (H) Section 6213(g)(2)(H) of such Code is amended 
                by striking ``section 21'' and inserting ``section 
                36C''.
                    (I) Section 6213(g)(2)(L) of such Code is amended 
                by striking ``section 21, 24, or 32'' and inserting 
                ``section 24, 32, or 36C''.
                    (J) Section 1324(b)(2) of title 31, United States 
                Code, is amended by inserting ``36C,'' after ``36B,''.
                    (K) 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:

``Sec. 36C. Expenses for household and dependent care services 
                            necessary for gainful employment.''.
                    (L) The table of sections for subpart A of such 
                part IV is amended by striking the item relating to 
                section 21.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2019.
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