I 111th CONGRESS 1st Session H. R. 3434 IN THE HOUSE OF REPRESENTATIVES July 30, 2009 Mr. Donnelly of Indiana 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 modify the credit for expenses for household and dependent care services necessary for gainful employment.

1.

Short title

This Act may be cited as the Tax Relief for Working Caregivers Act of 2009.

2.

Modification of credit for expenses for household and dependent care services necessary for gainful employment

(a)

Increased phaseout threshold

Paragraph (2) of section 21(a) of the Internal Revenue Code of 1986 (defining applicable percentage) is amended by striking $15,000 and inserting $75,000. (b)

Credit allowed for costs incurred to care for parents and grandparents who do not live with the taxpayer

(1)

In general

Paragraph (1) of section 21(b) of the Internal Revenue Code of 1986 (relating to qualifying individual) is amended by striking or at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting , or, and by adding at the end the following new subparagraph: (D)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 the father or mother of the taxpayer (or an ancestor of such father or mother) and who is physically or mentally incapable of caring for himself or herself. . (2)

Conforming amendment

Section 21(b)(1)(B) of such Code is amended by inserting (other than a dependent described in subparagraph (D)) after and (d)(1)(B)). (c)

Inflation adjustment

Subsection (e) of section 21 of such Code is amended by adding at the end the following new paragraph: (11)

Inflation adjustment

(A)

In general

In the case of any taxable year beginning after 2010, the dollar amounts in paragraphs (1) and (2) of subsection (c) shall each 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 calendar year 2009 for calendar year 1992 in subparagraph (B) thereof. (B)

Rounding

If any amount as adjusted under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000. . (d)

Certain prior amendments to credit made permanent

Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the amendments made by section 204 of such Act. (e)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2009.