[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2976 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2976

 To amend the Internal Revenue Code of 1986 to provide an election to 
   advance future child tax credits in the year of birth or adoption.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 4, 2019

Mr. Cassidy (for himself, Ms. Sinema, Mr. Daines, Mrs. Capito, and Mr. 
   Manchin) 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 provide an election to 
   advance future child tax credits in the year of birth or adoption.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Advancing Support for Working 
Families Act''.

SEC. 2. ELECTION TO ADVANCE CHILD TAX CREDIT.

    (a) In General.--Section 24 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(i) Election for Advanced Credit in Year of Birth or Adoption.--
            ``(1) In general.--In the case of a taxpayer who makes an 
        election under this subsection with respect to any applicable 
        qualifying child--
                    ``(A) the amount of the credit allowed under 
                subsection (a) with respect to such applicable 
                qualifying child for the taxable year in which such 
                applicable qualifying child is born or adopted shall be 
                increased by the applicable amount, and
                    ``(B) the amount determined under subsection (d) 
                shall be increased by the amount of credit allowed to 
                the taxpayer under this section by reason of 
                subparagraph (A).
        No election may be made under this subsection with respect to 
        an applicable qualifying child unless the applicable qualifying 
        child is alive at the time the election is made.
            ``(2) Offsetting reduction.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, if the amount of the credit allowed to 
                the taxpayer under subsection (a) is increased under 
                paragraph (1), the tax imposed by this chapter shall be 
                increased by the applicable fraction of such increase 
                for each taxable year in the offset period.
                    ``(B) Applicable fraction.--For purposes of this 
                paragraph, the term `applicable fraction' means a 
                fraction--
                            ``(i) the numerator of which is one, and
                            ``(ii) the denominator of which is the 
                        total number of years in the offset period.
                    ``(C) Exceptions.--
                            ``(i) Death.--Subparagraph (A) shall not 
                        apply to any taxable year ending after the date 
                        of the death of--
                                    ``(I) the taxpayer, or
                                    ``(II) the applicable qualifying 
                                child with respect to the increase.
                            ``(ii) Deferment.--
                                    ``(I) In general.--In the case of 
                                any taxpayer described in subclause 
                                (II) for the taxable year, no tax shall 
                                be imposed under subparagraph (A) for 
                                such taxable year and the number of 
                                taxable years in the offset period 
                                shall be increased (other than for 
                                purposes of subparagraph (B)(ii)) by 1 
                                year.
                                    ``(II) Taxpayer described.--A 
                                taxpayer is described in this subclause 
                                for any taxable year if the earned 
                                income amount of the taxpayer for such 
                                taxable year is more than 20 percent 
                                less than the earned income amount of 
                                the taxpayer for the preceding taxable 
                                year and the taxpayer makes an election 
                                under this clause. The Secretary shall 
                                promulgate rules for calculating 
                                differences in the earned income amount 
                                of any taxpayer whose filing status is 
                                not the same as such taxpayer's filing 
                                status in the preceding taxable year.
                                    ``(III) Election.--An election made 
                                under this clause shall apply to all 
                                applicable qualifying children of the 
                                taxpayer with respect to whom an 
                                increase is allowed under this 
                                subsection and may not be made with 
                                respect to more than 3 taxable years in 
                                any offset period.
                    ``(D) Joint returns.--In the case of an increase in 
                credit allowed under paragraph (1) with respect to a 
                joint return, half of such increase shall be treated as 
                having been allowed to each individual filing such 
                return for purposes of this paragraph.
                    ``(E) Return requirement.--If the tax imposed by 
                this chapter for the taxable year is increased under 
                this paragraph, the taxpayer shall, notwithstanding 
                section 6012, be required to file a return with respect 
                to the taxes imposed under this subtitle.
                    ``(F) Offset period.--
                            ``(i) In general.--Except as provided in 
                        subparagraph (C)(ii), the term `offset period' 
                        means, with respect to any increase under this 
                        paragraph, the 10 taxable years beginning with 
                        the taxable year in which the applicable 
                        qualifying child is born or adopted.
                            ``(ii) Special rule.--In the case of a 
                        qualifying child who is adopted by the taxpayer 
                        and who is over the age of 5 on the date the 
                        adoption becomes final, the number of taxable 
                        years in the offset period shall be reduced by 
                        1 year for each year by which the age attained 
                        by the qualifying child on the date the 
                        adoption becomes final is over the age of 5.
            ``(3) Election to claim credit on prior year return.--In 
        the case of an applicable qualifying child born or adopted 
        after the date that is 120 days after the date of the enactment 
        of this subsection, a taxpayer may elect to treat such child as 
        born or adopted on December 31 of the calendar year preceding 
        such birth or adoption for purposes of this section.
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) Applicable qualifying child.--The term 
                `applicable qualifying child' means any qualifying 
                child other than an eligible foster child (as defined 
                in section 152(f)(1)(C)).
                    ``(B) Applicable amount.--
                            ``(i) In general.--The applicable amount is 
                        the amount, not to exceed the maximum credit 
                        amount, elected by the taxpayer.
                            ``(ii) Maximum credit amount.--
                                    ``(I) In general.--The maximum 
                                credit amount is $5,000.
                                    ``(II) Special rule for certain 
                                adopted children.--In the case of a 
                                qualifying child who is adopted by the 
                                taxpayer and who is over the age of 5 
                                on the date the adoption becomes final, 
                                the maximum credit amount shall be 
                                reduced by $500 for each year by which 
                                the age attained by the qualifying 
                                child on the date the adoption becomes 
                                final is over the age of 5.
                    ``(C) Earned income amount.--The term `earned 
                income amount' means the amount of earned income 
                (within the meaning of section 32) which is taken into 
                account in computing taxable income for the taxable 
                year. For purposes of the preceding sentence, any 
                amount excluded from gross income by reason of section 
                112 shall be treated as earned income which is taken 
                into account in computing taxable income for the 
                taxable year.
            ``(5) Special rule for certain low-income individuals.--
                    ``(A) In general.--In the case of a taxpayer 
                described in subparagraph (B)--
                            ``(i) the applicable amount shall not 
                        exceed the lesser of--
                                    ``(I) the maximum credit amount, or
                                    ``(II) the applicable percentage of 
                                the earned income amount of the 
                                taxpayer for the taxable year, and
                            ``(ii) paragraph (2)(F) shall be applied--
                                    ``(I) by substituting `15 taxable 
                                years' for `10 taxable years' in clause 
                                (i) thereof, and
                                    ``(II) by substituting `age of 0' 
                                for `age of 5' each place it appears in 
                                clause (ii).
                    ``(B) Taxpayer described.--A taxpayer is described 
                in this subparagraph if the increase in credits allowed 
                under subpart C for the taxable year by reason of 
                subsection (d)(1) (determined without regard to 
                paragraph (1)(B)) is less than the amount that would be 
                so determined if subsection (d)(1) were applied without 
                regard to subparagraph (B) thereof.
                    ``(C) Applicable percentage.--For purposes of 
                subparagraph (A)--
                            ``(i) In general.--The applicable 
                        percentage is 25 percent.
                            ``(ii) Special rule for certain adopted 
                        children.--In the case of a qualifying child 
                        who is adopted by the taxpayer and who is over 
                        the age of 5 on the date the adoption becomes 
                        final, the applicable percentage shall be 
                        reduced by 2.5 percentage points for each year 
                        by which the age attained by the qualifying 
                        child on the date the adoption becomes final is 
                        over the age of 5.
            ``(6) Special rule for year of birth or adoption.--
                    ``(A) In general.--In the case of a qualifying 
                child who is born or adopted during the taxable year 
                and with respect to whom an election is made under this 
                subsection--
                            ``(i) subsection (h)(7) shall not apply, 
                        and
                            ``(ii) no credit shall be allowed under 
                        this section with respect to such qualifying 
                        child unless the taxpayer includes one of the 
                        following:
                                    ``(I) In the case of a qualifying 
                                child who is adopted, the adoption 
                                taxpayer identification number of such 
                                child.
                                    ``(II) A social security number 
                                (within the meaning of subsection 
                                (h)(7)) of such child.
                                    ``(III) Such documentation as 
                                determined by the Secretary as 
                                appropriate to establish that the 
                                qualifying child qualifies for a social 
                                security number (within the meaning of 
                                subsection (h)(7)).
                    ``(B) Acceleration.--
                            ``(i) In general.--In any case in which a 
                        taxpayer does not include a social security 
                        number (within the meaning of subsection 
                        (h)(7)) of a qualifying child with respect to 
                        whom an election is made under this subsection 
                        on the return of tax for the taxable year of 
                        birth or adoption--
                                    ``(I) the tax imposed by this 
                                chapter for the taxable year succeeding 
                                the taxable year in which the birth or 
                                adoption of the qualifying child occurs 
                                shall be increased by the excess of the 
                                amount of the increase in credit under 
                                paragraph (1) over the amounts of tax 
                                imposed by paragraph (2) for the 
                                preceding taxable year, and
                                    ``(II) paragraph (2) shall not 
                                apply with respect to such increase for 
                                such taxable year or any subsequent 
                                taxable year.
                        For purposes of this title, any increase in tax 
                        under this subparagraph shall be treated in the 
                        same manner as an increase in tax under 
                        paragraph (2).
                            ``(ii) Exception if social security number 
                        provided.--Clause (i) shall not apply if the 
                        taxpayer includes on the return of tax for the 
                        taxable year succeeding the taxable year in 
                        which the birth or adoption of the qualifying 
                        child occurs the social security number (within 
                        the meaning of subsection (h)(7)) of such 
                        qualifying child.
            ``(7) Administration and regulations.--The Secretary shall 
        take such steps as necessary, including through regulations and 
        other guidance, in order to--
                    ``(A) enable and encourage taxpayers to claim an 
                increased credit under this subsection as soon as 
                practical after the birth or adoption of a child, 
                including through a process available on the Internet,
                    ``(B) expedite the processing of refunds in 
                connection with an election to claim the increased 
                credit on a prior year return under paragraph (3),
                    ``(C) prevent fraud and abuse of the increased 
                credit, including, if necessary, through the submission 
                of additional third-party information related to the 
                birth or adoption of a child with respect to whom an 
                increased credit is claimed under this subsection, and
                    ``(D) provide annual information to electing 
                taxpayers relating to outstanding liability with 
                respect to offsetting reductions under paragraph 
                (2).''.
    (b) Credits Not Allowed Against Offset.--Section 26(b)(2) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of subparagraph (X), by striking the period at the end of subparagraph 
(Y) and inserting ``, and'', and by adding at the end the following new 
subparagraph:
                    ``(Z) section 24(i)(2) (relating to offset of 
                advanced child tax credit in year of birth or 
                adoption).''.
    (c) Math Error Authority.--Section 6213(g)(2) of the Internal 
Revenue Code of 1986 is amended by striking ``and'' at the end of 
subparagraph (P), by striking the period at the end of subparagraph (Q) 
and inserting ``, and'', and by inserting after subparagraph (Q) the 
following new subparagraph:
                    ``(R) in the case of a taxpayer to whom section 
                24(i)(2) applies, an omission of correct information 
                relating to the amount of any increase allowed under 
                section 24(i), the applicable fraction (as defined in 
                such section) of such increase, or the determination of 
                whether the taxpayer is described in section 
                24(i)(2)(C)(ii)(II).''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2019.
            (2) Special rule for election to claim credit on prior year 
        return.--In the case of a taxpayer who makes an election under 
        section 24(i)(3) (as added by subsection (a)) with respect to a 
        child born before January 1, 2021 (determined without regard to 
        such section), the amendments made by this section shall apply 
        to taxable years beginning after December 31, 2018.
    (e) GAO Study.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this Act, the Comptroller General of the United 
        States shall submit to Congress a report on taxpayers making an 
        election under section 24(i) of the Internal Revenue Code of 
        1986, as added by subsection (a).
            (2) Matters included.--The report submitted under paragraph 
        (1) shall include the following:
                    (A) The total number of taxpayers making such 
                election for each month during 2019, and the average 
                number of days occurring during the period beginning on 
                the date on which such election is made and ending on 
                the date on which the Secretary of the Treasury (or the 
                Secretary's designee) makes a determination that an 
                increase under such section is allowed.
                    (B) The total number of taxpayers receiving an 
                increased credit under such section during 2019, and 
                the average number of days occurring during the period 
                beginning on the date on which such election is made 
                and ending on the date on which any refund related to 
                such increase is paid.
                    (C) An identification of any excessive delay in any 
                of the periods described in subparagraphs (A) and (B), 
                and a description of the causes for such delay, with 
                recommendations to address those excessive delays.
                    (D) The total number of taxpayers making such 
                election who failed to submit a social security number 
                of the qualifying child or such other information 
                required pursuant to section 24(i)(6)(A) of the 
                Internal Revenue Code of 1986 (as added by subsection 
                (a)), and a description of the barriers preventing 
                taxpayers from meeting such requirements, with 
                recommendations on how to increase taxpayer compliance 
                and address delays caused by other state and Federal 
                agencies.
                    (E) The total number of elections for deferment 
                under section 24(i)(2)(C)(ii) of such Code (as added by 
                subsection (a)) and the number of such elections 
                permitted.
                    (F) The total number of taxpayers not required to 
                make offsetting increases in tax under section 
                24(i)(2)(A) of such Code (as added by subsection (a)) 
                due to the death of the applicable qualifying child or 
                the taxpayer and the revenue impact of such exceptions.
                    (G) A list of regulatory and legislative options, 
                determined in consultation with family and medical 
                leave experts, on the feasibility of expanding Federal 
                tax benefits, including through interaction with 
                programs administered by States, insurance companies, 
                and employers, to support taxpayers who take different 
                types of leave to which the Family and Medical Leave 
                Act of 1993 (29 U.S.C. 2601 et seq.) applies.
                                 <all>