Title: Right Start Child Care and Education Act of 2019
Policy area: Taxation

Summary:
Right Start Child Care and Education Act of 2019
This bill expands the tax credits and exclusions that are available for child care expenses. The bill includes provisions that

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 137 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                 S. 137

 To amend the Internal Revenue Code of 1986 to increase the credit for 
employers establishing workplace child care facilities, to increase the 
   child care credit to encourage greater use of quality child care 
services, to provide incentives for students to earn child care-related 
   degrees and to work in child care facilities, and to increase the 
       exclusion for employer-provided dependent care assistance.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 16, 2019

  Mrs. Shaheen (for herself, Mrs. Gillibrand, Ms. Klobuchar, and Mr. 
    Schatz) 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 increase the credit for 
employers establishing workplace child care facilities, to increase the 
   child care credit to encourage greater use of quality child care 
services, to provide incentives for students to earn child care-related 
   degrees and to work in child care facilities, and to increase the 
       exclusion for employer-provided dependent care assistance.

    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 ``Right Start Child Care and Education 
Act of 2019''.

SEC. 2. INCREASE IN EMPLOYER-PROVIDED CHILD CARE CREDIT.

    (a) Increase in Creditable Percentage of Child Care Expenditures.--
Paragraph (1) of section 45F(a) of the Internal Revenue Code of 1986 is 
amended by striking ``25 percent'' and inserting ``35 percent''.
    (b) Increase in Creditable Percentage of Resource and Referral 
Expenditures.--Paragraph (2) of section 45F(a) of the Internal Revenue 
Code of 1986 is amended by striking ``10 percent'' and inserting ``20 
percent''.
    (c) Increase in Maximum Credit.--Subsection (b) of section 45F of 
the Internal Revenue Code of 1986 is amended by striking ``$150,000'' 
and inserting ``$225,000''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2018.

SEC. 3. INCREASE IN DEPENDENT CARE CREDIT.

    (a) Increase in Incomes Eligible for Full Credit.--Paragraph (2) of 
section 21(a) of the Internal Revenue Code of 1986 is amended by 
striking ``$15,000'' and inserting ``$30,000''.
    (b) Increase in Percentage of Expenses Allowable.--Paragraph (2) of 
section 21(a) of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``35 percent'' and inserting ``50 
        percent'', and
            (2) by striking ``20 percent'' and inserting ``35 
        percent''.
    (c) Increase in Dollar Limit on Amount Creditable.--Subsection (c) 
of section 21 of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``$3,000'' in paragraph (1) and inserting 
        ``$6,000'', and
            (2) by striking ``$6,000'' in paragraph (2) and inserting 
        ``$12,000''.
    (d) 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 amendments.--
                    (A) Paragraph (1) of section 23(f) of such Code is 
                amended by striking ``21(e)'' and inserting ``36C(e)''.
                    (B) Paragraph (6) of section 35(g) of such Code is 
                amended by striking ``21(e)'' and inserting ``36C(e)''.
                    (C) Paragraph (1) of section 36C(a) of such Code 
                (as redesignated by paragraph (1)) is amended by 
                striking ``this chapter'' and inserting ``this 
                subtitle''.
                    (D) Subparagraph (C) of section 129(a)(2) of such 
                Code is amended by striking ``section 21(e)'' and 
                inserting ``section 36C(e)''.
                    (E) Paragraph (2) of section 129(b) of such Code is 
                amended by striking ``section 21(d)(2)'' and inserting 
                ``section 36C(d)(2)''.
                    (F) Paragraph (1) of section 129(e) of such Code is 
                amended by striking ``section 21(b)(2)'' and inserting 
                ``section 36C(b)(2)''.
                    (G) Subsection (e) of section 213 of such Code is 
                amended by striking ``section 21'' and inserting 
                ``section 36C''.
                    (H) Subparagraph (H) of section 6213(g)(2) of such 
                Code is amended by striking ``section 21'' and 
                inserting ``section 36C''.
                    (I) 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''.
                    (J) Paragraph (2) of section 1324(b) 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.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2018.

SEC. 4. 3-YEAR CREDIT FOR INDIVIDUALS HOLDING CHILD CARE-RELATED 
              DEGREES WHO WORK IN LICENSED CHILD CARE FACILITIES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 25D the following new section:

``SEC. 25E. RIGHT START CHILD CARE AND EDUCATION CREDIT.

    ``(a) Allowance of Credit.--In the case of an individual who is an 
eligible child care provider for the taxable year, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year the amount of $2,000.
    ``(b) 3-Year Credit.--
            ``(1) In general.--The credit allowable by subsection (a) 
        for any taxable year to an individual shall be allowed for such 
        year only if the individual elects the application of this 
        section for such year.
            ``(2) Election.--An election to have this section apply may 
        not be made by an individual for any taxable year if such an 
        election by such individual is in effect for any 3 prior 
        taxable years.
    ``(c) Eligible Child Care Provider.--For purposes of this section--
            ``(1) In general.--The term `eligible child care provider' 
        means, for any taxable year, any individual if--
                    ``(A) as of the close of such taxable year, such 
                individual holds a bachelor's degree in early childhood 
                education, child care, or a related degree and such 
                degree was awarded by an eligible educational 
                institution (as defined in section 25A(f)(2)), and
                    ``(B) during such taxable year, such individual 
                performs at least 1,200 hours of child care services at 
                a facility if--
                            ``(i) the principal use of the facility is 
                        to provide child care services,
                            ``(ii) no more than 25 percent of the 
                        children receiving child care services at the 
                        facility are children (as defined in section 
                        152(f)) of the individual or such individual's 
                        spouse, and
                            ``(iii) the facility meets the requirements 
                        of all applicable laws and regulations of the 
                        State or local government in which it is 
                        located, including the licensing of the 
                        facility as a child care facility.
                Subparagraph (B)(i) shall not apply to a facility which 
                is the principal residence (within the meaning of 
                section 121) of the operator of the facility.
            ``(2) Child care services.--The term `child care services' 
        means child care and early childhood education.''.
    (b) Clerical Amendment.--The table of sections for subpart A 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 25D the 
following new item:

``Sec. 25E. Right Start Child Care and Education Credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2018.

SEC. 5. INCREASE IN EXCLUSION FOR EMPLOYER-PROVIDED DEPENDENT CARE 
              ASSISTANCE.

    (a) In General.--Subparagraph (A) of section 129(a)(2) of the 
Internal Revenue Code of 1986 is amended by striking ``$5,000 ($2,500'' 
and inserting ``$7,500 ($3,750''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2018.
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