Special Needs Tax Credit Act

Bill: 117-hr-3819
Sponsor: full_name: Rep. Deutch, Theodore E. [D-FL-22]
Introduced: 2021-06-11
Policy area: Taxation
Subjects: Adoption and foster care

Disability and paralysis

Income tax credits

Legal fees and court costs
Latest action: action_date: 2021-06-11
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2021-06-11
action_desc: Introduced in House
text: <p><b>Special Needs Tax Credit Act </b></p> <p>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. </p>

tv_txt: I 117th CONGRESS 1st Session H. R. 3819 IN THE HOUSE OF REPRESENTATIVES June 11, 2021 Mr. Deutch 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 provide a credit to individuals for legal expenses paid with respect to establishing guardianship of a family member with disabilities.

1. Short title This Act may be cited as the Special Needs Tax Credit Act . 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: 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.