Definition: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Input: SECTION 1. SHORT TITLE; AMENDMENTS TO 1986 CODE.

(a) Short Title.--This Act may be cited as the ''Family Tax Relief
Act of 2009''.
(b) Amendments to 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.

SEC. 2. EXPANSION OF DEPENDENT CARE CREDIT.

(a) In General.--Subpart C of part IV of subchapter A of chapter 1
(relating to refundable credits) is amended by inserting after section
36A the following new section:

''SEC. 36B. EXPENSES FOR HOUSEHOLD AND DEPENDENT CARE SERVICES
NECESSARY FOR GAINFUL EMPLOYMENT.

''(a) Allowance of Credit.--
''(1) In general.--In the case of an individual for which
there are 1 or more qualifying individuals (as defined in
subsection (b)(1)) with respect to such individual, there shall
be allowed as a credit against the tax imposed by this subtitle
for the taxable year an amount equal to the applicable
percentage of the employment-related expenses (as defined in
subsection (b)(2)) paid by such individual during the taxable
year.
''(2) Applicable percentage defined.--For purposes of
paragraph (1), the term 'applicable percentage' means 50
percent reduced (but not below 20 percent) by 1 percentage
point for each $1,000 (or fraction thereof) by which the
taxpayer's adjusted gross income for the taxable year exceeds
$30,000.
''(b) Definitions of Qualifying Individual and Employment-Related
Expenses.--For purposes of this section--
''(1) Qualifying individual.--The term 'qualifying
individual' means--
''(A) a dependent of the taxpayer (as defined in
section 152(a)(1)) who has not attained age 13,
''(B) a dependent of the taxpayer (as defined in
section 152, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B)) who is physically or
mentally incapable of caring for himself or herself and
who has the same principal place of abode as the
taxpayer for more than one-half of such taxable year,
or
''(C) the spouse of the taxpayer, if the spouse is
physically or mentally incapable of caring for himself
or herself and has the same principal place of abode as
the taxpayer for more than one-half of such taxable
year.
''(2) Employment-related expenses.--
''(A) In general.--The term 'employment-related
expenses' means amounts paid for the following
expenses, but only if such expenses are incurred to
enable the taxpayer to be gainfully employed for any
period for which there are 1 or more qualifying
individuals with respect to the taxpayer:
''(i) Expenses for household services.
''(ii) Expenses for the care of a
qualifying individual.
Such term shall not include any amount paid for
services outside the taxpayer's household at a camp
where the qualifying individual stays overnight.
''(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--
''(i) a qualifying individual described in
paragraph (1)(A), or
''(ii) a qualifying individual (not
described in paragraph (1)(A)) who regularly
spends at least 8 hours each day in the
taxpayer's household.
''(C) Dependent care centers.--Employment-related
expenses described in subparagraph (A) which are
incurred for services provided outside the taxpayer's
household by a dependent care center (as defined in
subparagraph (D)) shall be taken into account only if--
''(i) such center complies with all
applicable laws and regulations of a State or
unit of local government, and
''(ii) the requirements of subparagraph (B)
are met.
''(D) Dependent care center defined.--For purposes
of this paragraph, the term 'dependent care center'
means any facility which--
''(i) provides care for more than six
individuals (other than individuals who reside
at the facility), and
''(ii) receives a fee, payment, or grant
for providing services for any of the
individuals (regardless of whether such
facility is operated for profit).
''(c) Dollar Limit on Amount Creditable.--The amount of the
employment-related expenses incurred during any taxable year which may
be taken into account under subsection (a) shall not exceed--
''(1) $5,000 if there is 1 qualifying individual with
respect to the taxpayer for such taxable year, or
''(2) $10,000 if there are 2 or more qualifying individuals
with respect to the taxpayer for such taxable year.
The amount determined under paragraph (1) or (2) (whichever is
applicable) shall be reduced by the aggregate amount excludable from
gross income under section 129 for the taxable year.
''(d) Earned Income Limitation.--
''(1) In general.--Except as otherwise provided in this
subsection, the amount of the employment-related expenses
incurred during any taxable year which may be taken into
account under subsection (a) shall not exceed--
''(A) in the case of an individual who is not
married at the close of such year, such individual's
earned income for such year, or
''(B) in the case of an individual who is married
at the close of such year, the lesser of such
individual's earned income or the earned income of his
spouse for such year.
''(2) Special rule for spouse who is a student or incapable
of caring for himself.--In the case of a spouse who is a
student or a qualifying individual described in subsection
(b)(1)(C), for purposes of paragraph (1), such spouse shall be
deemed for each month during which such spouse is a full-time
student at an educational institution, or is such a qualifying
individual, to be gainfully employed and to have earned income
of not less than--
''(A) $415 if subsection (c)(1) applies for the
taxable year, or
''(B) $830 if subsection (c)(2) applies for the
taxable year.
In the case of any husband and wife, this paragraph shall apply
with respect to only one spouse for any one month.
''(e) Special Rules.--For purposes of this section--
''(1) Place of abode.--An individual shall not be treated
as having the same principal place of abode as the taxpayer if
at any time during the taxable year of the taxpayer the
relationship between the individual and the taxpayer is in
violation of local law.
''(2) Married couples must file joint return.--If the
taxpayer is married at the close of the taxable year, the
credit shall be allowed under subsection (a) only if the
taxpayer and his spouse file a joint return for the taxable
year.
''(3) Marital status.--An individual legally separated from
his spouse under a decree of divorce or of separate maintenance
shall not be considered as married.
''(4) Certain married individuals living apart.--If--
''(A) an individual who is married and who files a
separate return--
''(i) maintains as his home a household
which constitutes for more than one-half of the
taxable year the principal place of abode of a
qualifying individual, and
''(ii) furnishes over half of the cost of
maintaining such household during the taxable
year, and
''(B) during the last 6 months of such taxable year
such individual's spouse is not a member of such
household,
such individual shall not be considered as married.
''(5) Special dependency test in case of divorced parents,
etc.--If--
''(A) section 152(e) applies to any child with
respect to any calendar year, and
''(B) such child is under the age of 13 or is
physically or mentally incapable of caring for himself,
in the case of any taxable year beginning in such calendar
year, such child shall be treated as a qualifying individual
described in subparagraph (A) or (B) of subsection (b)(1)
(whichever is appropriate) with respect to the custodial parent
(as defined in section 152(e)(3)(A)), and shall not be treated
as a qualifying individual with respect to the noncustodial
parent.
''(6) Payments to related individuals.--No credit shall be
allowed under subsection (a) for any amount paid by the
taxpayer to an individual--
''(A) with respect to whom, for the taxable year, a
deduction under section 151(c) (relating to deduction
for personal exemptions for dependents) is allowable
either to the taxpayer or his spouse, or
''(B) who is a child of the taxpayer (within the
meaning of section 152(f)(1)) who has not attained the
age of 19 at the close of the taxable year.
For purposes of this paragraph, the term 'taxable year' means
the taxable year of the taxpayer in which the service is
performed.
''(7) Student.--The term 'student' means an individual who
during each of 5 calendar months during the taxable year is a
full-time student at an educational organization.
''(8) Educational organization.--The term 'educational
organization' means an educational organization described in
section 170(b)(1)(A)(ii).
''(9) Identifying information required with respect to
service provider.--No credit shall be allowed under subsection
(a) for any amount paid to any person unless--
''(A) the name, address, and taxpayer
identification number of such person are included on
the return claiming the credit, or
''(B) if such person is an organization described
in section 501(c)(3) and exempt from tax under section
501(a), the name and address of such person are
included on the return claiming the credit.
In the case of a failure to provide the information required
under the preceding sentence, the preceding sentence shall not
apply if it is shown that the taxpayer exercised due diligence
in attempting to provide the information so required.
''(10) Identifying information required with respect to
qualifying individuals.--No credit shall be allowed under this
section with respect to any qualifying individual unless the
TIN of such individual is included on the return claiming the
credit.
''(f) Adjustment for Inflation.--In the case of any taxable year
beginning after December 31, 2009, the $30,000 amount under subsection
(a)(2) and each of the dollar amounts under subsection (c) shall be
increased by an amount equal to--
''(1) such dollar amount, multiplied by
''(2) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable year
begins by substituting '2008' for '1992' in subparagraph (B)
thereof.
If the dollar amount as adjusted under the preceding sentence is not a
multiple of $10, such amount shall be rounded to the nearest multiple
of $10.
''(g) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this section.''.
(b) Conforming Amendments.--
(1) Subpart A of part IV of subchapter A of chapter 1 of
the Internal Revenue Code of 1986 is amended by striking
section 21.
(2) Section 23(f)(1) (relating to filing requirements) is
amended by striking ''section 21(e)'' and inserting ''section
36B(e)''.
(3) Section 35(g)(6) (relating to marital status) is
amended by striking ''section 21(e)'' and inserting ''section
36B(e)''.
(4) Section 129(a)(2) (relating to limitation of exclusion)
is amended by striking ''section 21(e)'' and inserting
''section 36B(e)''.
(5) Section 129(b)(2) (relating to special rule for certain
spouses) is amended by striking ''section 21(d)(2)'' and
inserting ''section 36B(d)(2)''.
(6) Section 129(e)(1) (relating to dependent care
assistance) is amended by striking ''section 21(b)(2)'' and
inserting ''section 36B(b)(2)''.
(7) Section 213(e) (relating to exclusion of amounts
allowed for care of certain dependents) is amended by striking
''section 21'' and inserting ''section 36B''.
(8) Section 6213(g)(2) (relating to mathematical or
clerical error) is amended--
(A) by striking ''section 21'' in subparagraph (H)
and inserting ''section 36B'', and
(B) by striking ''section 21, 24, or 32'' in
subparagraph (L) and inserting ''section 24, 32, or
36B''.
(c) Clerical Amendments.--
(1) 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 36A
the following new item:

''Sec. 36B. Expenses for household and dependent care services
necessary for gainful employment.''.
(2) 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 striking the item relating to section 21.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.

SEC. 3. RULES RELATING TO EMPLOYER-PROVIDED DEPENDENT CARE BENEFITS.

(a) Exclusion Limit.--
(1) In general.--Section 129(a)(2) (relating to limitation
on exclusion) is amended--
(A) by striking ''$5,000'' and inserting ''the
applicable dollar limit'', and
(B) by striking ''$2,500'' and inserting ''one-half
of such limit''.
(2) Applicable dollar limit.--Section 129(a) is amended by
adding at the end the following new paragraph:
''(3) Applicable dollar limit.--For purposes of this
subsection--
''(A) In general.--The applicable dollar limit is
$7,500 ($10,000 if dependent care assistance is
provided under the program to 2 or more qualifying
individuals of the employee).
''(B) Cost-of-living adjustments.--In the case of
taxable years beginning after 2009, each dollar amount
under subparagraph (A) shall be increased by an amount
equal to--
''(i) such dollar amount, 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 '2008' for '1992' in
subparagraph (B) thereof.
If any dollar amount as increased under this clause is
not a multiple of $100, such dollar amount shall be
rounded to the next lowest multiple of $100.''.
(b) Average Benefits Test.--
(1) In general.--Section 129(d)(8)(A) (relating to
benefits) is amended--
(A) by striking ''55 percent'' and inserting ''60
percent'', and
(B) by striking ''highly compensated employees''
the second place it appears and inserting ''employees
receiving benefits''.
(2) Salary reduction agreements.--Section 129(d)(8)(B)
(relating to salary reduction agreements) is amended--
(A) by striking ''$25,000'' and inserting
''$30,000'', and
(B) by adding at the end the following: ''In the
case of years beginning after 2009, the $30,000 amount
in the first sentence shall be adjusted at the same
time, and in the same manner, as the applicable dollar
amount is adjusted under subsection (a)(3)(B).''.
(c) Principal Shareholders or Owners.--Section 129(d)(4) (relating
to principal shareholders and owners) is amended by adding at the end
the following: ''In the case of any failure to meet the requirements of
this paragraph for any year, amounts shall only be required by reason
of the failure to be included in gross income of the shareholders or
owners who are members of the class described in the preceding
sentence.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
Output:
Family Tax Relief Act of 2009 - Amends the Internal Revenue Code to: (1) allow an additional refundable tax credit for expenses for household and dependent care services necessary for gainful employment; and (2) increase the dollar limitation on the tax exclusion for employed-provided dependent care assistance payments.