Family Security Act

Bill: 118-s-5256
Sponsor: full_name: Sen. Romney, Mitt [R-UT]
Introduced: 2024-09-25
Policy area: Taxation
Latest action: action_date: 2024-09-25
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2024-09-25
action_desc: Introduced in Senate
text: <p><strong>Family Security Act</strong></p><p>This bill increases the child tax credit and provides a new tax credit for pregnant mothers. The bill also makes changes to the state and local tax (SALT) deduction, earned income tax credit (EITC), heads of household filing status, tax exemption for dependents, and deduction for dependent care expenses.</p><p>This bill increases the child tax credit for 2026 to $3,000 or $4,200 for each child, depending on the child’s age, makes the tax credit fully refundable (currently a portion is refundable), and allows taxpayers to receive the tax credit in advance monthly payments. Under the bill, the child tax credit is limited to six children and phases out once a taxpayer’s income exceeds a certain threshold.</p><p>The bill provides a new refundable tax credit for pregnant mothers of $2,800, which phases out once a taxpayer’s income exceeds a certain threshold. Taxpayers may receive the tax credit in advance monthly payments.</p><p>The bill permanently extends the SALT deduction for individuals (currently, the SALT deduction for individuals expires in 2026) and increases the limit to $30,000 from $10,000 (or to $15,000 from $5,000 for married taxpayers filing separately). &nbsp;</p><p>The bill permanently eliminates the tax exemption for dependents. Under current law, a tax exemption for dependents is available starting in 2026.</p><p>This bill also eliminates the</p><p>• &nbsp; &nbsp;head of household filing status,&nbsp;<br/>• &nbsp; &nbsp;tax credit for dependent care expenses for children under 13 years old, and&nbsp;<br/>• &nbsp; &nbsp;different percentages that apply based on the number of qualifying children in the EITC calculation.</p>

tv_txt: II 118th CONGRESS 2d Session S. 5256 IN THE SENATE OF THE UNITED STATES September 25, 2024 Mr. Romney 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 enhance the child tax credit, and for other purposes.

1. Short title This Act may be cited as the Family Security Act . I Child Tax Credit and Tax Credit for Pregnant Mothers 101. Permanent expansion of child tax credit (a) In general Section 24 of the Internal Revenue Code of 1986 is amended— (1) by striking subsections (a) through (e) and inserting the following new subsections: (a) Allowance of credit (1) In general There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of the base credit amount. (2) Base credit amount For purposes of paragraph (1), the base credit amount shall be an amount equal to the sum of— (A) for each qualifying child who has not attained age 6 as of the close of the calendar year in which the taxable year of the taxpayer begins, $4,200, and (B) for each qualifying child of the taxpayer who is not described in subparagraph (A), $3,000. (b) Applicable percentage and limitation based on adjusted gross income (1) Applicable percentage For purposes of subsection (a), the applicable percentage shall be— (A) in the case of a taxpayer whose modified adjusted gross income is equal to or greater than $20,000, 100 percent, or (B) in the case of a taxpayer whose modified adjusted gross income is less than $20,000, an amount (expressed as a percentage) equal to the quotient of— (i) the modified adjusted gross income of the taxpayer, divided by (ii) $20,000. (2) Limitation The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds— (A) in the case of a joint return, $400,000, or (B) in any other case, $200,000. (3) Modified adjusted gross income For purposes of this subsection, the term modified adjusted gross income means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933. (4) Adjustment for inflation (A) In general In the case of a taxable year beginning after 2026, each of the $20,000 amounts in paragraph (1) shall be increased by an amount equal to— (i) $20,000, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting 2025 for 2016 in subparagraph (A)(ii) thereof. (B) Rounding If any increase under this paragraph is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100. (c) Qualifying child For purposes of this section— (1) In general The term qualifying child means a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 18 as of the close of the calendar year in which the taxable year of the taxpayer begins. (2) Exception for certain noncitizens The term qualifying child shall not include any individual who would not be a dependent if subparagraph (A) of section 152(b)(3) were applied without regard to all that follows resident of the United States . (d) Limitation on number of children The number of qualifying children of a taxpayer for which a credit may be allowed under this section for any taxable year shall not exceed 6. (e) Identification requirements (1) In general No credit shall be allowed under this section to a taxpayer who does not include on the return of tax for the taxable year— (A) the social security number of the taxpayer (and, in the case of a joint return, the social security number of at least 1 spouse), and (B) with respect to any qualifying child, the name and the social security number of such qualifying child. (2) Social security number defined For purposes of this subsection, the term social security number means, with respect to a return of tax, a social security number issued to an individual by the Social Security Administration, but only if the social security number is issued— (A) to a citizen of the United States or pursuant to subclause (I) (or that portion of subclause (III) that relates to subclause (I)) of section 205(c)(2)(B)(i) of the Social Security Act, and (B) before the due date of filing such return. , (2) by striking subsections (h) through (j) and inserting the following: (h) Reconciliation of credit and advance credit (1) In general The amount of the credit allowed under this section to any taxpayer for any taxable year shall be reduced (but not below zero) by the aggregate amount of payments made under section 7527A to such taxpayer during such taxable year. Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1). (2) Excess advance payments If the aggregate amount of payments under section 7527A to the taxpayer during the taxable year exceeds the amount of the credit allowed under this section to such taxpayer for such taxable year (determined without regard to paragraph (1)), the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess. Any failure to so increase the tax shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1). , (3) in subsection (k)— (A) by striking paragraph (2) and inserting the following: (2) Puerto Rico (A) Nonapplication of advance payments For nonapplication of advance payment to residents of Puerto Rico, see section 7527A(e)(4)(A). (B) Allowance of credit In the case of any bona fide resident of Puerto Rico (within the meaning of section 937(a)), the credit determined under this section shall be allowable to such resident. , and (B) in paragraph (3)— (i) in subparagraph (A), by striking and without regard to the application of this section to bona fide residents of Puerto Rico under subsection (i)(1) , and (ii) in subparagraph (C), by striking clause (ii) and inserting the following: (ii) Application of section in event of absence of approved plan In the case of a taxable year with respect to which a plan is not approved under subparagraph (B), rules similar to the rules of paragraph (2)(B) shall apply with respect to bona fide residents of American Samoa (within the meaning of section 937(a)). , and (4) by redesignating subsection (k) (as amended by paragraph (3)) as subsection (i). (b) Treatment as fully refundable (1) Credit moved to subpart relating to refundable credits (A) In general The Internal Revenue Code of 1986 is amended— (i) by redesignating section 24, as amended by this section, as section 36C, and (ii) by moving such section, as so redesignated, from subpart A of part IV of subchapter A of chapter 1 to the location immediately after section 36B in subpart C of part IV of subchapter A of chapter 1. (B) Technical amendment Subsection (a) of section 36C of such Code, as moved and redesignated by subparagraph (A), is amended by striking this chapter and inserting this subtitle . (C) Clerical amendments (i) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 24. (ii) The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 36C. Child tax credit. . (2) Conforming amendments (A) Section 26(b)(2)(Z) of such Code is amended by striking 24(j)(2) and inserting 36C(h)(2) . (B) Subparagraph (B) of section 45R(f)(3) of such Code is amended to read as follows: (B) Special rule Any amounts paid pursuant to an agreement under section 3121(l) (relating to agreements entered into by American employers with respect to foreign affiliates) which are equivalent to the taxes referred to in subparagraph (A) shall be treated as taxes referred to in such subparagraph. . (C) Section 48D(d)(4) of such Code is amended by striking section 24(k) and inserting section 36C(i) . (D) Section 152(f)(6)(B)(ii) of such Code is amended by striking section 24 and inserting section 36C . (E) Paragraph (26) of section 501(c) of such Code is amended in the flush matter at the end by striking section 24(c)) and inserting section 36C(c)) . (F) Section 3402(f)(1)(C) of such Code is amended by striking section 24 (determined after application of subsection (j) thereof) and inserting section 36C (determined after application of subsection (h) thereof) . (G) Section 6103(l)(13)(A)(v) of such Code is amended by striking section 24 and inserting section 36C . (H) Section 6211(b)(4)(A) of such Code is amended— (i) by striking 24 by reason of subsections (d) and (i)(1) thereof, , and (ii) by inserting 36C, after 36B, . (I) Section 6213(g)(2) of such Code is amended— (i) in subparagraph (I), by striking correct TIN required under section 24(e) and inserting correct social security number required under section 36C(e) , (ii) in subparagraph (L)— (I) by striking 24, or 32 and inserting 32, or 36C , and (II) by striking TIN each place it appears and inserting TIN or social security number , and (iii) in subparagraph (P)— (I) by striking 24(g)(2) and inserting 36C(g)(2) , and (II) by striking section 24 and inserting section 36C . (J) Section 6402(m) of such Code is amended by striking section 24 (by reason of subsection (d) thereof) or 32 and inserting section 32 or 36C . (K) Section 6417(f) of such Code is amended by striking section 24(k) and inserting section 36C(i) . (L) Section 6695(g)(2) of such Code is amended by striking 24, 25A(a)(1), or 32 and inserting 25A(a)(1), 32, or 36C . (M) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended— (i) by striking 24, , and (ii) by inserting 36C, after 36B, . (N) Section 1613(a)(11)(A) of the Social Security Act ( 42 U.S.C. 1382b(a)(11)(A) ) is amended by striking section 24 of the Internal Revenue Code of 1986 (relating to child tax credit) by reason of subsection (d) thereof and inserting section 36C of the Internal Revenue Code of 1986 (relating to child tax credit), and any payment made to such individual (or such spouse) under section 7527A of such Code (relating to advance payment of child tax credit) . (c) Coordination with advance payments of credit Section 7527A of the Internal Revenue Code of 1986 is amended— (1) in subsection (a)— (A) by inserting who have made an election under subsection (c)(1) after making periodic payments to taxpayers , and (B) by striking periodic payments each place it appears and inserting monthly payments , (2) in subsection (b)— (A) in paragraph (1)— (i) in the matter preceding subparagraph (A), by striking 50 percent of the amount which would be treated as allowed under subpart C of part IV of subchapter A of chapter 1 by reason of section 24(i)(1) and inserting the amount allowed under section 36C , (ii) by striking subparagraph (A), and (iii) by redesignating subparagraphs (B) through (D) as subparagraphs (A) through (C), respectively, (B) in paragraph (3)— (i) in subparagraph (A)(ii), by striking subpart C of part IV of subchapter A of chapter 1 by reason of section 24(i)(1) and inserting section 36C , and (ii) in subparagraph (B), by striking periodic payment each place it appears and inserting monthly payment , (C) by striking paragraph (4), and (D) by redesignating paragraph (5) as paragraph (4), (3) in subsection (c), by striking paragraph (1) and inserting the following: (1) make an election to receive payments under this section, and , (4) in subsection (e)(4)— (A) by striking subparagraph (A) and inserting the following: (A) Nonapplication for residents of Puerto Rico If the taxpayer (in the case of a joint return, either spouse) is a bona fide resident of Puerto Rico (within the meaning of section 937(a)) for the taxable year, the advance payment amount with respect to the calendar year in which such taxable year begins shall be reduced to zero. , (B) in subparagraph (B), by striking section 24(k) and inserting section 36C(i) , and (C) in subparagraph (C)— (i) in clause (i)— (I) by striking section 24(k)(1)(A) and inserting section 36C(i)(1)(A) , and (II) by striking in 2021 and inserting after 2020 , and (ii) in clause (ii)— (I) by striking section 24(k)(3) and inserting section 36C(i)(3) , and (II) by striking in 2021 and inserting after 2020 , (5) in subsection (f), by striking with respect to and all that follows and inserting with respect to any period before July 1, 2021. , and (6) in subsection (g), by striking subsections (i)(1) and (j) of section 24 and inserting section 36C . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025. 102. Tax credit for pregnant mothers (a) In general Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36C (as redesignated by section 101) the following new section: 36D. Credit for pregnant mothers (a) Allowance of credit In the case of an eligible taxpayer with a qualifying unborn child, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of $2,800. (b) Applicable percentage (1) In general For purposes of subsection (a), the applicable percentage shall be— (A) in the case of a taxpayer whose modified adjusted gross income is equal to or greater than $10,000, 100 percent, or (B) in the case of a taxpayer whose modified adjusted gross income is less than $10,000, the amount (expressed as a percentage) equal to the quotient of— (i) the modified adjusted gross income of the taxpayer, divided by (ii) $10,000. (2) Limitation The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds— (A) in the case of a joint return, $400,000, or (B) in any other case, $200,000. (3) Modified adjusted gross income For purposes of this subsection, the term modified adjusted gross income has the same meaning given such term in section 36C(b)(3). (4) Adjustment for inflation (A) In general In the case of a taxable year beginning after 2026, each of the $10,000 amounts in paragraph (1) shall be increased by an amount equal to— (i) $10,000, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting 2025 for 2016 in subparagraph (A)(ii) thereof. (B) Rounding If any increase under this paragraph is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100. (c) Qualifying unborn child (1) In general For purposes of this section, the term qualifying unborn child means an unborn child whose gestational age is 20 weeks or greater, as certified by a physician in accordance with paragraph (2). (2) Certification (A) In general Upon the request of the mother, a physician may make a determination with respect to the gestational age of the unborn child. Any determination made under this paragraph shall be based on the reasonable medical judgment of the physician following such inquiries, examinations, and tests as a reasonably prudent physician would deem necessary for purposes of making such determination. (B) Form If the physician has made a determination pursuant to subparagraph (A) that the gestational age of the unborn child is 20 weeks or greater, such physician may, upon the request of the mother, provide the mother with a form which includes the following: (i) The gestational age and the expected due date of the unborn child. (ii) The name and social security number of the mother. (iii) If applicable, the name and social security number of the spouse of such mother. (iv) The name and contact information of the physician. (v) A written certification from such physician stating, under penalty of perjury pursuant to section 1746 of title 28, that— (I) the mother was determined to have been pregnant with the unborn child, according to standard medical practice, by such physician, and (II) such physician has determined that, in their reasonable medical judgment, the gestational age of the unborn child is 20 weeks or greater. (vi) A written certification from the mother of the unborn child stating, under penalty of perjury pursuant to section 1746 of title 28, United States Code, that she— (I) is the biological mother of such unborn child, or (II) initiated the pregnancy with the intention of bearing and retaining custody of and parental rights to such child (or acted to such effect). (C) Prohibition Notwithstanding any other provision of law, the certification described in this paragraph shall not be used for any purpose other than to determine the eligibility of the taxpayer for the credit allowed under this section. (d) Application (1) In general In the case of the involuntary death of an unborn child, or the death of an unborn child as a result of any treatment intended to save the life of the mother or any treatment of an ectopic pregnancy, occurring after 20 weeks gestation, the death of such child shall have no effect with respect to whether the credit is allowed under this section to an eligible taxpayer, provided that such taxpayer otherwise satisfies the applicable requirements under this section. (2) More than 1 unborn child during the same taxable year In the case of an eligible taxpayer who— (A) has more than 1 pregnancy during a taxable year, or (B) is determined to be pregnant with more than 1 qualifying unborn child, the credit under this section shall be allowed with respect to each qualifying unborn child. (3) Interaction with child tax credit The allowance of a credit under this section with respect to a qualifying unborn child shall have no effect in regards to the application of section 36C with respect to such child after the date of their birth. (e) Prohibition No credit shall be allowed under this section if an unborn child died as a result of an induced abortion, but not including any treatment intended to save the life of the mother or any treatment of an ectopic pregnancy. (f) Reconciliation of credit and advanced payments (1) In general The amount of the credit allowed under this section to any taxpayer for any taxable year shall be reduced (but not below zero) by the aggregate amount of payments made under section 7527B to such taxpayer during such taxable year. Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1). (2) Excess advance payments If the aggregate amount of payments under section 7527B to the taxpayer during the taxable year exceeds the amount of the credit allowed under this section to such taxpayer for such taxable year (determined without regard to paragraph (1)), the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess. Any failure to so increase the tax shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1). (g) Definitions In this section— (1) Eligible taxpayer The term eligible taxpayer means a taxpayer who— (A) with respect to an unborn child, is the mother who— (i) carries or carried such child in the womb, and (ii) is the biological mother of such child or initiated the pregnancy with the intention of bearing and retaining custody of and parental rights to such child (or acted to such effect), or (B) in the case of a joint return, is the spouse of such mother, but only if such taxpayer includes on the return of tax for the taxable year the social security number of such taxpayer (of at least 1 of such mother or spouse, in the case of a joint return). (2) Gestational age The term gestational age means the age of the unborn child, as calculated from the first day of the mother’s last menstrual period. (3) Physician The term physician means an individual who is— (A) licensed to practice— (i) medicine and surgery, (ii) osteopathic medicine and surgery, or (iii) midwifery, or (B) otherwise legally authorized to— (i) perform births and to diagnose and attend miscarriages or stillbirths, and (ii) perform examinations to determine the gestational age of an unborn child, by the State in which such practice is performed. (4) Reasonable medical judgment The term reasonable medical judgment means a medical judgment that would be made by a reasonably prudent physician who is knowledgeable about the case and the treatment possibilities with respect to the medical conditions involved. (5) Social security number The term social security number has the meaning given such term by section 36C(e)(2). . (b) Advance payments Chapter 77 of the Internal Revenue Code of 1986 is amended by inserting after section 7527A the following new section: 7527B. Advance payment of credit for pregnant mothers (a) In general The Secretary shall establish a program for making payments to any qualified taxpayer which— (1) in the aggregate, equal the advance payment amount determined with respect to such taxpayer, and (2) are scheduled to provide the amount described in paragraph (1) through monthly payments— (A) beginning in the month in which an election is made by the qualified taxpayer under subsection (c), and (B) ending on the month in which the expected due date of the unborn child occurs. (b) Advance payment amount (1) In general With respect to any qualified taxpayer, the advance payment amount shall be equal to the amount (if any) which is estimated by the Secretary as being equal to the amount of the credit which would otherwise be allowed under section 36D for the taxable year beginning in the calendar year in which such estimate is being made, except that the taxpayer's modified adjusted gross income for such taxable year shall be deemed to be equal to the taxpayer's modified adjusted gross income for the reference taxable year. (2) Reference taxable year For purposes of this subsection, the term reference taxable year means, with respect to any estimate made by the Secretary under paragraph (1) with respect to a taxpayer during any calendar year, the taxpayer's taxable year beginning in the preceding calendar year or, in the case of taxpayer who did not file a return of tax for such taxable year, the taxpayer's taxable year beginning in the second preceding calendar year. (c) Election A taxpayer shall make an election to receive payments under this section in such form and manner as the Secretary may prescribe, with such election to include the form described in subsection (d)(3). (d) Qualified taxpayer For purposes of this section, the term qualified taxpayer means any taxpayer— (1) with a qualifying unborn child (as defined in section 36D(c)(1)), (2) who is described in subparagraph (A) or (B) of section 36D(g)(1) with respect to such child, (3) who has submitted the form described in section 36D(c)(2)(B) to the Secretary with respect to such child, and (4) who has made an election under subsection (c). (e) Payments after birth Notwithstanding subsection (a)(2)(B), payments made to any qualified taxpayer under this section shall be made after the date of the birth of the child if needed to ensure that the aggregate amount of such payments satisfy the requirement under subsection (a)(1). (f) Regulations The Secretary shall issue such regulations or other guidance as the Secretary determines necessary or appropriate to carry out this subsection and, to the extent practicable, to align the payment program established under this section with the payment program established under section 7527A. . (c) Clerical amendments (1) Credit for pregnant mothers 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 36C the following new item: Sec. 36D. Credit for pregnant mothers. . (2) Advance payment of credit for pregnant mothers The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7527A the following new item: Sec. 7527B. Advance payment of credit for pregnant mothers. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025. II Other amendments to the Internal Revenue Code of 1986 201. Simplification of earned income credit for taxpayers with children (a) Additional limitation Paragraph (2) of section 32(a) of the Internal Revenue Code of 1986 is amended to read as follows: (2) Limitation The amount of the credit allowable to a taxpayer under paragraph (1) for any taxable year shall not exceed the lesser of— (A) the excess (if any) of— (i) the credit percentage of the earned income amount, over (ii) the phaseout percentage of so much of the adjusted gross income (or, if greater, the earned income) of the taxpayer for the taxable year as exceeds the phaseout amount, or (B) an amount equal to— (i) in the case of any taxpayer with no qualifying children— (I) who is not filing a joint return, $700, or (II) who is filing a joint return, $1,400, or (ii) in the case of any taxpayer with 1 or more qualifying children— (I) who is not filing a joint return, $4,300, or (II) who is filing a joint return, $5,000. . (b) Credit percentage and phaseout percentage The table contained in paragraph (1) of section 32(b) of the Internal Revenue Code of 1986 is amended— (1) by striking 1 qualifying child in the first row and inserting 1 or more qualifying children , (2) by striking 15.98 in the first row and inserting 25 , (3) by striking the second and third rows, and (4) by striking 7.65 in the third column of the last row and inserting 10 . (c) Earned income and phaseout amounts The table contained in subparagraph (A) of section 32(b)(2) of the Internal Revenue Code of 1986 is amended— (1) by striking 1 qualifying child in the first row and inserting 1 or more qualifying children , (2) by striking $6,330 in the first row and inserting $12,647 , (3) by striking $11,610 in the first row and inserting $33,000 , (4) by striking the second row, (5) by striking $4,220 in the last row and inserting $9,150 , and (6) by striking $5,280 in the last row and inserting $10,000 . (d) Joint returns Subparagraph (B) of section 32(b)(2) of the Internal Revenue Code of 1986 is amended by striking $5,000 and inserting “$10,000, and the earned income amount determined under subparagraph (A) shall be increased— (i) by $2,059, in the case of a taxpayer with 1 or more qualifying children, and (ii) by $9,151, in the case of a taxpayer with no qualifying children. . (e) Inflation adjustment Paragraph (1) of section 32(j) of the Internal Revenue Code of 1986 is amended— (1) by striking 2015 and inserting 2026 , (2) by striking clauses (i) and (ii) of subparagraph (B) thereof and redesignating clause (iii) of such subparagraph as clause (ii), and (3) by inserting before clause (ii) of subparagraph (B) thereof, as so redesignated, the following new clause: (i) in the case of amounts in subsection (b)(2), calendar year 2025 for calendar year 2016 , and . (f) Effective date (1) In general Subject to paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2025. (2) Nonapplication to exempted children (A) In general Subject to subparagraph (B), in the case of any eligible individual (as defined in section 32(c)(1) of the Internal Revenue Code of 1986) who has any qualifying children for the taxable year who are exempted children, section 32 of the Internal Revenue Code of 1986 shall be applied with respect to such eligible individual as if the amendments made by subsections (a) through (e) of this section had not been enacted. (B) Separate application In the case of any eligible individual (as so defined) who has— (i) any qualifying children for the taxable year who are not exempted children, and (ii) any qualifying children for such taxable year who are exempted children, section 32 of the Internal Revenue Code of 1986 shall be applied separately with respect to the children described in clause (i) and (pursuant to the rules described in subparagraph (A)) the children described in clause (ii). (C) Exempted child For purposes of this paragraph, the term exempted child means an individual who is described in subparagraph (A)(ii) or (B) of section 152(c)(3). 202. Elimination of additional exemption for dependents (a) In general Paragraph (5) of section 151(d) of the Internal Revenue Code of 1986 is amended to read as follows: (5) Elimination of additional exemption for dependents for taxable years after 2025 In the case of a taxable year beginning after December 31, 2025— (A) In general For purposes of subsection (c), the term exemption amount means zero. (B) References For purposes of any other provision of this title, the reduction of the exemption amount to zero under subparagraph (A) shall not be taken into account in determining whether a deduction is allowed or allowable, or whether a taxpayer is entitled to a deduction, under this section. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2025. 203. Elimination of head of household filing status (a) In general Section 1 of the Internal Revenue Code of 1986 is amended— (1) by striking subsection (b), (2) in subsection (c)— (A) in the heading, by striking and heads of households , and (B) by striking or the head of a household as defined in section 2(b) , (3) in subsection (f), by striking (b), each place it appears, (4) in subsection (i)— (A) in paragraph (1)— (i) in subparagraph (A)(i), by striking (b), , (ii) in subparagraph (B)— (I) in clause (i), by adding and at the end, (II) by striking clause (ii), and (III) by redesignating clause (iii) as clause (ii), and (iii) in subparagraph (C), by striking subparagraph (B)(iii) and inserting subparagraph (B)(ii) , (B) in paragraph (2), by striking (b), , and (C) in paragraph (3)— (i) in subparagraph (A), by striking (b), , (ii) in subparagraph (B)— (I) by striking clause (ii), and (II) by redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively, and (iii) in subparagraph (C), by striking clauses (i), (ii), and (iii) and inserting clauses (i) and (ii) , and (5) in subsection (j)— (A) in paragraph (2)— (i) by striking subparagraph (B), and (ii) in subparagraph (C), by striking and heads of households in the heading, (B) in paragraph (3)(B)(ii), by striking or head of household , and (C) in paragraph (5)(B)— (i) in clause (i)— (I) by striking subclause (II), and (II) by redesignating subclauses (III) and (IV) as subclauses (II) and (III), respectively, and (ii) in clause (ii)— (I) by striking subclause (II), and (II) by redesignating subclauses (III) and (IV) as subclauses (II) and (III), respectively. (b) Conforming amendments (1) Paragraph (2) of section 25B(b) of the Internal Revenue Code of 1986 is amended to read as follows: (2) Other returns In the case of any taxpayer not described in paragraph (1), the applicable percentage shall be determined under paragraph (1) except that such paragraph shall be applied by substituting for each dollar amount therein (as adjusted under paragraph (3)) a dollar amount equal to 50 percent of such dollar amount. . (2) Section 25E(b)(2) of such Code is amended— (A) in subparagraph (A), by adding and at the end, and (B) by striking subparagraphs (B) and (C) and inserting the following: (B) in the case of a taxpayer not described in subparagraph (A), $75,000. . (3) Section 30D(f)(10)(B) of such Code is amended— (A) in clause (i), by adding and at the end, and (B) by striking clauses (ii) and (iii) and inserting the following: (ii) in the case of a taxpayer not described in clause (i), $150,000. . (4) Section 36B(b)(3)(B)(ii)(I)(aa) of such Code is amended by striking and heads of households . (5) Section 63(c) of such Code is amended— (A) in paragraph (2)— (i) in subparagraph (A)(ii), by adding or at the end, (ii) by striking subparagraph (B), and (iii) by redesignating subparagraph (C) as subparagraph (B), (B) in paragraph (4), by striking , (2)(C), each place it appears, and (C) in paragraph (7)— (i) by striking subparagraph (A) and inserting the following: (A) Increase in standard deduction Paragraph (2)(B) shall be applied by substituting $12,000 for $3,000 . , and (ii) in subparagraph (B)— (I) in clause (i), by striking paragraphs (2)(B) and (2)(C) and inserting paragraph (2)(B) , and (II) in clause (ii), by striking $18,000 and $12,000 amounts and inserting $12,000 amount . (6) Section 68(b) of such Code is amended— (A) in paragraph (1)— (i) by striking subparagraph (B), (ii) in subparagraph (C), by striking or head of household , and (iii) by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively, and (B) in paragraph (2), by striking subparagraphs (A), (B), and (C) and inserting subparagraphs (A) and (B) . (7) Section 904(b)(3)(E)(i)(I) of such Code is amended by striking (b), . (8) Section 6012(a)(1) of such Code is amended— (A) in subparagraph (A)— (i) in clause (i), by striking is not a head of a household (as defined in section 2(b)), , (ii) by striking clause (ii), (iii) by redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively, and (iv) in the flush text at the end, by striking Clause (iv) and inserting Clause (iii) , and (B) in subparagraph (B)— (i) by striking clause (i), (ii), or (iii) and inserting clause (i) or (ii) , and (ii) by striking clause (iv) and inserting clause (iii) . (9) Subparagraph (B) of section 6433(b)(3) of such Code is amended to read as follows: (B) Other returns In the case of any taxpayer who is not filing a joint return and who is not a surviving spouse (as defined in section 2(a)), the applicable dollar amount and the phaseout range shall be ½ of the amounts applicable under subparagraph (A) (as so adjusted). . (10) Subsection (g) of section 6695 of such Code is amended to read as follows: (g) Failure To be diligent in determining eligibility for certain tax benefits Any person who is a tax return preparer with respect to any return or claim for refund who fails to comply with due diligence requirements imposed by the Secretary by regulations with respect to determining eligibility for, or the amount of, the credit allowable by section 24, 25A(a)(1), or 32, shall pay a penalty of $500 for each such failure. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025. 204. Exclusion of children from credit for expenses for household and dependent care services necessary for gainful employment (a) In general Section 21 of the Internal Revenue Code of 1986 is amended— (1) in subsection (b)— (A) in paragraph (1)— (i) by striking subparagraph (A), (ii) in subparagraph (B), by inserting who has attained age 18 and before who is physically or mentally incapable , and (iii) by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively, and (B) in paragraph (2), by striking subparagraph (B) and inserting the following: (B) Exception Employment-related expenses described in subparagraph (A) which are incurred for services outside the taxpayer's household shall be taken into account only if incurred for the care of a qualifying individual who regularly spends at least 8 hours each day in the taxpayer's household. , (2) in subsection (d)(2), by striking subsection (b)(1)(C) and inserting subsection (b)(1)(B) , and (3) in subsection (e)(5)— (A) in subparagraph (B), by striking is under the age of 13 or and inserting has attained age 18 and , and (B) in the flush text at the end, by striking subparagraph (A) or (B) of subsection (b)(1) (whichever is appropriate) and inserting subsection (b)(1)(A) . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025. 205. Limitation on deduction for State and local taxes of individuals (a) In general Paragraph (6) of section 164(b) of the Internal Revenue Code of 1986 is amended to read as follows: (6) Limitation on individual deductions for taxable years after 2025 (A) In general In the case of an individual and a taxable year beginning after December 31, 2025— (i) foreign real property taxes shall not be taken into account under subsection (a)(1), and (ii) the aggregate amount of taxes taken into account under paragraphs (1), (2), and (3) of subsection (a) and paragraph (5) of this subsection for any taxable year shall not exceed $30,000 ($15,000 in the case of a married individual filing a separate return). (B) Exceptions Subparagraph (A) shall not apply to— (i) any foreign taxes described in subsection (a)(3), or (ii) any taxes described in paragraph (1) and (2) of subsection (a) which are paid or accrued in carrying on a trade or business or an activity described in section 212. (C) Special rule For purposes of subparagraph (A)(ii), an amount paid in a taxable year beginning before January 1, 2026, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2025, shall be treated as paid on the last day of the taxable year for which such tax is so imposed. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2025.