[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 926 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 926

  To amend the Internal Revenue Code of 1986 to expand the child and 
             dependent care credit, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 17, 1997

Mr. Harkin (for himself and Mrs. Murray) 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 expand the child and 
             dependent care credit, and for other purposes.

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

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Working Family 
Child Care Tax Relief Act of 1997''.
    (b) Amendment of 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 CHILD AND DEPENDENT CARE CREDIT.

    (a) Increase in Credit.--Paragraph (2) of section 21(a) (relating 
to credit for expenses for household and dependent care services 
necessary for gainful employment) is amended to read as follows:
            ``(2) Applicable percentage defined.--For purposes of 
        paragraph (1), the term `applicable percentage' means 30 
        percent reduced (but not below 20 percent) by 1 percentage 
        point for each $3,000 (or fraction thereof) by which the 
        taxpayer's adjusted gross income exceeds $50,000.''
    (b) Increase in Maximum Amount Creditable.--
            (1) In general.--Section 21(c) (relating to dollar limit on 
        amount creditable) is amended--
                    (A) by striking ``$2,400'' in paragraph (1) and 
                inserting ``$4,000'', and
                    (B) by striking ``$4,800'' in paragraph (2) and 
                inserting ``$8,000''.
            (2) Phaseout for taxpayers with adjusted gross income in 
        excess of $50,000.--
                    (A) In general.--Section 21(c) is amended by adding 
                at the end the following new paragraph:
            ``(2) Limitation based on adjusted gross income.--If the 
        taxpayer's adjusted gross income for the taxable year exceeds 
        $50,000, the applicable dollar amount under paragraph (1) shall 
        be reduced as follows:
                    ``(A) The $4,000 amount under paragraph (1)(A) 
                shall be reduced (but not below $2,400) by $53.33 for 
                each $1,000 (or fraction thereof) of such excess.
                    ``(B) the $8,000 amount under paragraph (1)(B) 
                shall be reduced (but not below $4,800) by $106.66 for 
                each $1,000 (or fraction thereof) of such excess.''
            (2) Conforming amendments.--Section 21(c), as amended by 
        subsection (b), is amended--
                    (A) by striking ``The amount'' and inserting:
            ``(1) In general.--The amount'',
                    (B) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively, and
                    (C) by striking ``paragraph (1) or (2)'' and 
                inserting ``subparagraph (A) or (B)''.
    (c) Credit Made Refundable.--
            (1) In general.--Section 21 (relating to credit for 
        expenses for household and dependent care services), as amended 
        by this section, is transferred to subpart C of part IV of 
        subchapter A of chapter 1, inserted after section 35, and 
        redesignated as section 36.
            (2) Conforming amendments.--
                    (A) Section 129 is amended--
                            (i) by striking ``21(e)'' in subsection 
                        (a)(2)(C) and inserting ``36(e)'',
                            (ii) by striking ``21(d)(2)'' in subsection 
                        (b)(2) and inserting ``36(d)(2)'', and
                            (iii) by striking ``21(b)(2)'' in 
                        subsection (e)(1) and inserting ``36(b)(2)''.
                    (B) Section 213(e) is amended by striking ``section 
                21'' and inserting ``section 36''.
            (3) Clerical amendments.--
                    (A) The table of sections for subpart A of part IV 
                of subchapter A of chapter 1 is amended by striking the 
                item relating to section 21.
                    (B) The table of sections for subpart C of part IV 
                of subchapter A of chapter 1 is amended by adding at 
                the end the following new item:

                              ``Sec. 36. Expenses for household and 
                                        dependent care services 
                                        necessary for gainful 
                                        employment.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1997.
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