Increase in child credit with respect to children of members of the Armed Forces of the United States who die as a result of service in a combat zone

(a)

In general

Subsection (a) of section 24 of the Internal Revenue Code of 1986 (relating to allowance of credit) is amended to read as follows:

(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 with respect to each qualifying child of the taxpayer for which the taxpayer is allowed a deduction under section 151 an amount equal to $1,000. (2)

Increase in credit in case of member of the Armed Forces who dies as a result of service in a combat zone

In the case of taxpayer— (A)whose deceased spouse is an individual to whom section 692(a) (relating to general rule for income taxes of members of armed forces on death) applies, (B)with respect to whom the qualifying child is a child (as defined in section 152(f)(1)) of such deceased spouse, and (C)who, as of the close of the taxable year, has not remarried after the death of such deceased spouse,

paragraph (1) shall be applied with respect to such qualifying child by substituting $5,000 for $1,000.

(b)

AGI limitation not applicable

Subsection (b) of section 24 of such Code (relating to limitations) is amended by adding at the end the following:

(4)

AGI limitation not applicable to increased credit amount with respect to certain deceased members of the Armed Forces

Paragraph (1) shall not apply to the portion of the credit amount allowable under subsection (a) by reason of paragraph (2) thereof.

(c)

Effective date

The amendments allowed by this section shall apply to taxable years beginning after December 31, 2008.