[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3176 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 3176

 To amend the Internal Revenue Code of 1986 to allow all taxpayers who 
      maintain households with dependents a credit for dependents.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 11, 1998

  Mr. Franks of New Jersey (for himself and Mr. Ryun) 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 allow all taxpayers who 
      maintain households with dependents a credit for dependents.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. HOUSEHOLDS WITH DEPENDENTS.

    (a) Allowance of Credit.--Paragraph (1) of section 21(a) of the 
Internal Revenue Code of 1986 (relating to allowance of credit for 
expenses for household and dependent care services necessary for 
gainful employment) is amended by striking ``employment-related 
expenses (as defined in subsection (b)(2)) paid by such individual 
during the taxable year'' and inserting ``allowable amount''.
    (b) Applicable Percentage Defined.--Paragraph (2) of section 21(a) 
of such Code (relating to applicable percentage defined) is amended--
            (1) by striking ``30 percent reduced (but not below 20 
        percent)'' and inserting ``50 percent'', and
            (2) by striking ``$10,000'' and inserting ``$30,000''.
    (c) Definition of Qualifying Individual.--Subparagraph (A) of 
section 21(b)(1) of such Code (relating to definition of qualifying 
individual) is amended by striking ``the age of 13'' and inserting 
``the age of 7''.
    (d) Dollar Limit.--Subsection (c) of section 21 of such Code is 
amended to read as follows:
    ``(c) Allowable Amount.--
            ``(1) In general.--The allowable amount which may be taken 
        into account under subsection (a) is the sum of--
                    ``(A) $200 times the number of months in the 
                taxable year of the taxpayer during which there is not 
                1 day on which the taxpayer is gainfully employed, plus
                    ``(B) the employment-related expenses paid by the 
                taxpayer during the taxable year.
            ``(2) Limitation.--The amount determined under paragraph 
        (1) shall not exceed--
                    ``(A) $2,400 if there is 1 qualifying individual 
                with respect to the taxpayer for such taxable year, or
                    ``(B) $4,800 if there are 2 or more qualifying 
                individuals with respect to the taxpayer for such 
                taxable year.
            ``(3) Reduction for employer-provided dependent care 
        assistance.--The amount determined under paragraph (1) (after 
        the application of paragraph (2)) shall be reduced by the 
        aggregate amount excludable from gross income under section 129 
        for the taxable year.''
    (e) Special Dependency Test in Case of Divorced Parents, etc.--
Subparagraph (B) of section 21(e)(5) of such Code (relating to special 
dependency test in case of divorced parents, etc.) is amended by 
striking ``the age of 13'' and inserting ``the age of 7''.
    (f) Conforming Amendments.--
            (1) The heading for section 21 of such Code is amended to 
        read as follows:

``SEC. 21. HOUSEHOLDS WITH DEPENDENTS.''

            (2) Paragraph (2) of section 21(d) of such Code is 
        amended--
                    (A) in subparagraph (A) by striking ``subsection 
                (c)(1)'' and inserting ``subsection (c)(2)(A)'', and
                    (B) in subparagraph (B) by striking ``subsection 
                (c)(2)'' and inserting ``subsection (c)(2)(B)''.
            (3) Subparagraph (H) of section 6213(g)(2) of such Code is 
        amended by striking ``expenses for household and dependent care 
        services necessary for gainful employment'' and inserting 
        ``households with dependents''.
    (g) Clerical Amendment.--The item relating to section 21 in the 
table of sections for subpart A of part IV of subchapter A of chapter 1 
of such Code is amended to read as follows:

                              ``Sec. 21. Households with dependents.''
    (h) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1997.
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