[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5953 Introduced in House (IH)]

<DOC>






118th CONGRESS
  1st Session
                                H. R. 5953

To amend the Internal Revenue Code of 1986 to expand the earned income 
             and child tax credits, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 12, 2023

                Mrs. Sykes introduced the following bill

                            October 25, 2023

              Referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to expand the earned income 
             and child tax credits, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Lower Your Taxes 
Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Sense of Congress.
Sec. 3. Expansion of earned income tax credit.
Sec. 4. Payments to taxpayers determined by treating State non-
                            refundable earned income tax credits as 
                            refundable.
Sec. 5. Establishment of refundable child tax credit with monthly 
                            advance payment.
Sec. 6. Capital gains rates not applicable to certain high income 
                            taxpayers.
Sec. 7. Increase in rates of certain corporate taxes.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that the net revenue derived from this 
Act should be used to reduce the national deficit, to the extent 
thereof, and thereafter to reduce the national debt.

SEC. 3. EXPANSION OF EARNED INCOME TAX CREDIT.

    (a) Credit Percentage.--The table contained in section 32(b)(1) of 
the Internal Revenue Code of 1986 is amended--
            (1) by striking ``34'' and inserting ``68'',
            (2) by striking ``40'' and inserting ``80'',
            (3) by striking ``45'' and inserting ``90'', and
            (4) by striking ``7.65'' in the column with the heading 
        ``The credit percentage is:'' and inserting ``35''.
    (b) Phaseout Percentage.--The table contained in section 32(b)(1) 
of such Code is amended--
            (1) by striking ``15.98'' and inserting ``7'',
            (2) by striking ``21.06'' both places it appears and 
        inserting ``10'', and
            (3) by striking ``7.65'' in the column with the heading 
        ``The phaseout percentage is:'' and inserting ``7''.
    (c) Earned Income Amount.--The table contained in section 
32(b)(2)(A) of such Code is amended--
            (1) by striking ``$6,330'' and inserting ``$19,000'',
            (2) by striking ``$8,890'' and inserting ``$27,000'', and
            (3) by striking ``$4,220'' and inserting ``$15,000''.
    (d) Phaseout Amount.--
            (1) In general.--The table contained in section 32(b)(2)(A) 
        of such Code is amended--
                    (A) by striking ``$11,610'' both places it appears 
                and inserting ``$30,000'', and
                    (B) by striking ``$5,280'' and inserting 
                ``$15,000''.
            (2) Joint returns.--Section 32(b)(2)(B) of such Code is 
        amended by striking ``determined under subparagraph (A) shall 
        be increased by $5,000'' and inserting ``twice the amount 
        determined under subparagraph (A)''.
            (3) Inflation adjustment.--Section 32(j) of such Code is 
        amended to read as follows:
    ``(j) Inflation Adjustments.--
            ``(1) Earned income and phaseout amounts.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2024, each of the dollar amounts in 
                subsection (b)(2)(A) shall be increased by an amount 
                equal to--
                            ``(i) such dollar mount, multiplied by
                            ``(ii) the GDP adjustment determined under 
                        subparagraph (B) for the calendar year in which 
                        the taxable year begins.
                    ``(B) GDP adjustment.--For purposes of this 
                paragraph, the term `GDP adjustment' for any calendar 
                year is the percentage (if any) by which--
                            ``(i) the per capita nominal gross domestic 
                        product for the preceding calendar year (as 
                        determined by the Secretary), exceeds
                            ``(ii) the per capita nominal gross 
                        domestic product for calendar year 2023 (as 
                        determined by the Secretary).
                    ``(C) Rounding.--If any dollar amount in subsection 
                (b)(2)(A), after any increase under subparagraph (A), 
                is not a multiple of $10, such dollar amount shall be 
                rounded to the nearest multiple of $10.
            ``(2) Excessive investment income.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2021, the dollar amount in subsection 
                (i)(1) shall 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 2020' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                    ``(B) Rounding.--If the dollar amount in subsection 
                (i)(1), after any increase under subparagraph (A), is 
                not a multiple of $50, such dollar amount shall be 
                rounded to the next lowest multiple of $50.''.
    (e) Age Limitations.--Section 32(c)(1)(A)(ii)(II) of such Code is 
amended by striking ``has attained age 25 but not attained age 65'' and 
inserting ``has attained age 18''.
    (f) Notification of Taxpayers by Treasury of Potential Eligibility 
for the Earned Income Tax Credit.--
            (1) In general.--With respect to taxable years beginning in 
        calendar years after 2023, the Secretary shall establish a 
        program to notify (whether by electronic means or otherwise) 
        specified individuals that such individuals may be eligible for 
        the earned income tax credit.
            (2) Specified individual.--For purposes of this subsection, 
        the term ``specified individual'' means any individual who--
                    (A) based on information available to the Secretary 
                related to the taxable year or the preceding taxable 
                year, the Secretary determines is likely to be eligible 
                for the earned income tax credit, and
                    (B) either--
                            (i) filed a return of tax for such taxable 
                        year and did not claim the earned income tax 
                        credit, or
                            (ii) did not (as of such determination) 
                        file a return of tax for such taxable year.
            (3) Secretary.--For purposes of this subsection, the term 
        ``Secretary'' means the Secretary of the Treasury or the 
        Secretary's delegate.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

SEC. 4. PAYMENTS TO TAXPAYERS DETERMINED BY TREATING STATE NON-
              REFUNDABLE EARNED INCOME TAX CREDITS AS REFUNDABLE.

    (a) In General.--The Secretary shall establish a program for making 
annual payments to eligible individuals equal to the State refundable 
earned income tax credit equivalency amount with respect to taxable 
years beginning in calendar years after 2023.
    (b) Eligible Individual.--For purposes of this section--
            (1) In general.--The term ``eligible individual'' means any 
        individual who is eligible for, and claims, a non-refundable 
        earned income tax credit for a taxable year beginning after 
        December 31, 2023, under the income tax laws of an eligible 
        State.
            (2) Eligible state.--The term ``eligible State'' means any 
        State if--
                    (A) the Secretary determines that such States has 
                in effect, as of the date of the enactment of this Act, 
                a non-refundable earned income tax credit, and
                    (B) such State enters into an agreement with the 
                Secretary to provide the Secretary such information as 
                the Secretary may require to administer this section.
            (3) Non-refundable earned income tax credit.--
                    (A) In general.--The term ``non-refundable earned 
                income tax credit'' means, with respect to any State, a 
                credit against the income tax imposed by such State 
                which the Secretary has determined is based on the 
                earned income of the taxpayer and which is limited to 
                the tax liability of such taxpayer.
                    (B) Treatment of certain credit modifications.--A 
                credit shall not be treated as a non-refundable earned 
                income tax credit for any taxable year if the Secretary 
                determines that such credit as in effect for such 
                taxable year has been modified (relative to such credit 
                as in effect on the date of the enactment of this Act) 
                in manner which suggests that a significant purpose of 
                such modification was to increase the amount of 
                payments made under this section.
                    (C) Treatment of credits scheduled to terminate.--A 
                credit shall not be treated as non-refundable earned 
                income tax credit for any taxable year if such credit 
                was not scheduled to be in effect for such taxable year 
                under the income tax laws of the State as in effect on 
                the date of the enactment of this Act.
    (c) State Refundable Earned Income Tax Credit Equivalency Amount.--
For purposes of this section, the term ``State refundable earned income 
tax credit equivalency amount'' means, with respect to any individual 
for any taxable year, the amount determined by the Secretary as being 
the excess (if any) of--
            (1) the amount of the non-refundable earned income tax 
        credit which would have been allowed to such individual for 
        such taxable year if such credit were not limited based on the 
        tax liability of the taxpayer, over
            (2) the amount by which such individual's State income tax 
        liability would increase if such credit were not allowed 
        (determined after taking into account all other income tax 
        credits other than income tax credits which constitute credits 
        for the payment of tax).
    (d) Payments Treated in Same Manner as Refundable Income Tax 
Credits.--Except as otherwise provided by the Secretary, the program 
established under subsection (a) shall effectuate the payments 
described therein by deeming the amount of such payment as a payment of 
Federal income tax for purposes of the Internal Revenue Code of 1986. 
Any overpayment of tax attributable to such deemed payment shall be 
refunded by the Secretary as soon as practicable. For purposes of 
section 1324 of title 31, United States Code, any such refund shall be 
treated in the same manner as a refund due from a credit provision 
referred to in subsection (b)(2) of such section.
    (e) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury or the Secretary's 
delegate.

SEC. 5. ESTABLISHMENT OF REFUNDABLE CHILD TAX CREDIT WITH MONTHLY 
              ADVANCE PAYMENT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 24 the following new sections:

``SEC. 24A. MONTHLY CHILD TAX CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year the sum of 
the monthly specified child allowances determined with respect to the 
taxpayer under subsection (b) for each calendar month during such 
taxable year.
    ``(b) Monthly Specified Child Allowance.--
            ``(1) In general.--For purposes of this section, the term 
        `monthly specified child allowance' means, with respect to any 
        taxpayer for any calendar month, the sum of--
                    ``(A) $300, with respect to each specified child of 
                such taxpayer who will (as of the close of such month) 
                have attained age 6, plus
                    ``(B) $350, with respect to each specified child of 
                such taxpayer who will not (as of the close of such 
                month) have attained age 6.
            ``(2) Limitations based on modified adjusted gross 
        income.--
                    ``(A) Initial reduction.--The monthly specified 
                child allowance otherwise determined under paragraph 
                (1) with respect to any taxpayer for any calendar month 
                shall be reduced (but not below zero) by \1/12\ of 5 
                percent of the excess (if any) of the taxpayer's 
                modified adjusted gross income for the applicable 
                taxable year over the initial threshold amount in 
                effect for such applicable taxable year.
                    ``(B) Limitation on initial reduction.--In the case 
                of any calendar month beginning before January 1, 2026, 
                the amount of the reduction under subparagraph (A) 
                shall not exceed the lesser of--
                            ``(i) the excess (if any) of--
                                    ``(I) the monthly specified child 
                                allowance with respect to the taxpayer 
                                for such calendar month (determined 
                                without regard to this paragraph), over
                                    ``(II) the amount which would be 
                                determined under subclause (I) if the 
                                dollar amounts in effect under 
                                subparagraphs (A) and (B) of paragraph 
                                (1) were each equal to $166.67, or
                            ``(ii) \1/12\ of 5 percent of the excess of 
                        the secondary threshold amount over the initial 
                        threshold amount.
                    ``(C) Secondary reduction.--In the case of any 
                calendar month beginning before January 1, 2026, the 
                monthly specified child allowance otherwise determined 
                under paragraph (1) with respect to any taxpayer for 
                such calendar month (determined after the application 
                of subparagraphs (A) and (B)) shall be reduced (but not 
                below zero) by \1/12\ of 5 percent of the excess (if 
                any) of the taxpayer's modified adjusted gross income 
                for the applicable taxable year over the secondary 
                threshold amount.
                    ``(D) Definitions related to limitations based on 
                modified adjusted gross income.--For purposes of this 
                paragraph--
                            ``(i) Initial threshold amount.--The term 
                        `initial threshold amount' means--
                                    ``(I) $150,000, in the case of a 
                                joint return or surviving spouse (as 
                                defined in section 2(a)),
                                    ``(II) \1/2\ the dollar amount in 
                                effect under subclause (I), in the case 
                                of a married individual filing a 
                                separate return, and
                                    ``(III) $112,500, in any other 
                                case.
                            ``(ii) Secondary threshold amount.--The 
                        term `secondary threshold amount' means--
                                    ``(I) $400,000, in the case of a 
                                joint return or surviving spouse (as 
                                defined in section 2(a)),
                                    ``(II) $300,000, in the case of a 
                                head of household (as defined in 
                                section 2(b)), and
                                    ``(III) $200,000, in any other 
                                case.
                            ``(iii) Applicable taxable year.--The term 
                        `applicable taxable year' means, with respect 
                        to any taxable year for which the credit under 
                        this section is determined--
                                    ``(I) such taxable year, or
                                    ``(II) if the taxpayer elects the 
                                application of this subclause (at such 
                                time and in such form and manner as the 
                                Secretary may provide), the preceding 
                                taxable year or the second preceding 
                                taxable year (as specified in such 
                                election).
                            ``(iv) Modified adjusted gross income.--The 
                        term `modified adjusted gross income' means 
                        adjusted gross income increased by any amount 
                        excluded from gross income under section 911, 
                        931, or 933.
            ``(3) Inflation adjustments.--
                    ``(A) Monthly specified child allowance.--In the 
                case of any month beginning after December 31, 2023, 
                each dollar amount in paragraph (1) shall be increased 
                by an amount equal to--
                            ``(i) such dollar amount, multiplied by--
                            ``(ii) the percentage (if any) by which--
                                    ``(I) the CPI (as defined in 
                                section 1(f)(4)) for the calendar year 
                                preceding the calendar year in which 
                                such month begins, exceeds
                                    ``(II) the CPI (as so defined) for 
                                calendar year 2020.
                    ``(B) Initial threshold amount.--In the case of any 
                taxable year beginning after December 31, 2023, the 
                dollar amounts in subclauses (I) and (III) of paragraph 
                (2)(D)(i) shall each be increased by an amount equal 
                to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the percentage (if any) which would 
                        be determined under subparagraph (A)(ii) if 
                        subclause (II) thereof were applied by 
                        substituting `2022' for `2020'.
                    ``(C) Rounding.--
                            ``(i) Monthly specified child allowance.--
                        Any increase under subparagraph (A) which is 
                        not a multiple of $10 shall be rounded to the 
                        nearest multiple of $10.
                            ``(ii) Initial threshold amount.--Any 
                        increase under subparagraph (B) which is not a 
                        multiple of $5,000 shall be rounded to the 
                        nearest multiple of $5,000.
    ``(c) Specified Child.--For purposes of this section--
            ``(1) In general.--The term `specified child' means, with 
        respect to any taxpayer for any calendar month, an individual--
                    ``(A) who has the same principal place of abode as 
                the taxpayer for more than one-half of such month,
                    ``(B) who is younger than the taxpayer and will 
                not, as of the close of such month, have attained age 
                18,
                    ``(C) who receives care from the taxpayer during 
                such month that is not compensated,
                    ``(D) who is not the spouse of the taxpayer at any 
                time during such month, and
                    ``(E) who either--
                            ``(i) is a citizen, national, or resident 
                        of the United States, or
                            ``(ii) if the taxpayer is a citizen or 
                        national of the United States, such individual 
                        is described in section 152(f)(1)(B) with 
                        respect to such taxpayer.
            ``(2) Certain individuals ineligible.--In the case of an 
        individual who is a specified child with respect to another 
        taxpayer for any calendar month, such individual shall be 
        treated for such calendar month as having no specified 
        children.
            ``(3) Care from the taxpayer.--
                    ``(A) In general.--Except as otherwise provided by 
                the Secretary, whether any individual receives care 
                from the taxpayer (within the meaning of paragraph 
                (1)(C)) shall be determined on the basis of facts and 
                circumstances with respect to the following factors:
                            ``(i) The supervision provided by the 
                        taxpayer regarding the daily activities and 
                        needs of the individual.
                            ``(ii) The maintenance by the taxpayer of a 
                        secure environment at which the individual 
                        resides.
                            ``(iii) The provision or arrangement by the 
                        taxpayer of, and transportation by the taxpayer 
                        to, medical care at regular intervals and as 
                        required for the individual.
                            ``(iv) The involvement by the taxpayer in, 
                        and financial and other support by the taxpayer 
                        for, educational or similar activities of the 
                        individual.
                            ``(v) Any other factor that the Secretary 
                        determines to be appropriate to determine 
                        whether the individual receives care from the 
                        taxpayer.
                    ``(B) Determination of whether care is 
                compensated.--For purposes of determining if care is 
                compensated within the meaning of paragraph (1)(C), 
                compensation from the Federal Government, a State or 
                local government, a Tribal government, or any 
                possession of the United States shall not be taken into 
                account.
            ``(4) Application of tie-breaker rules.--
                    ``(A) In general.--Except as provided in 
                subparagraph (D), if any individual would (but for this 
                paragraph) be a specified child of 2 or more taxpayers 
                for any month, such individual shall be treated as the 
                specified child only of the taxpayer who is--
                            ``(i) the parent of the individual (or, if 
                        such individual would (but for this paragraph) 
                        be a specified child of 2 or more parents of 
                        the individual for such month, the parent of 
                        the individual determined under subparagraph 
                        (B)),
                            ``(ii) if the individual is not a specified 
                        child of any parent of the individual 
                        (determined without regard to this paragraph), 
                        the specified relative of the individual with 
                        the highest adjusted gross income for the 
                        taxable year which includes such month, or
                            ``(iii) if the individual is neither a 
                        specified child of any parent of the individual 
                        nor a specified child of any specified relative 
                        of the individual (in both cases determined 
                        without regard to this paragraph), the taxpayer 
                        with the highest adjusted gross income for the 
                        taxable year which includes such month.
                    ``(B) Tie-breaker among parents.--If any individual 
                would (but for this paragraph) be the specified child 
                of 2 or more parents of the individual for any month, 
                such child shall be treated only as the specified child 
                of--
                            ``(i) the parent with whom the child 
                        resided for the longest period of time during 
                        such month, or
                            ``(ii) if the child resides with both 
                        parents for the same amount of time during such 
                        month, the parent with the highest adjusted 
                        gross income for the taxable year which 
                        includes such month.
                    ``(C) Specified relative.--For purposes of this 
                paragraph, the term `specified relative' means an 
                individual who is--
                            ``(i) an ancestor of a parent of the 
                        specified child,
                            ``(ii) a brother or sister of a parent of 
                        the specified child, or
                            ``(iii) a brother, sister, stepbrother, or 
                        stepsister of the specified child.
                    ``(D) Certain parents or specified relatives not 
                taken into account.--This paragraph shall be applied 
                without regard to any parent or specified relative of 
                an individual for any month if--
                            ``(i) such parent or specified relative 
                        elects to have such individual not be treated 
                        as a specified child of such parent or 
                        specified relative for such month,
                            ``(ii) in the case of a parent of such 
                        individual, the adjusted gross income of the 
                        taxpayer (with respect to whom such individual 
                        would be treated as a specified child after 
                        application of this subparagraph) for the 
                        taxable year which includes such month is 
                        higher than the highest adjusted gross income 
                        of any parent of the individual for any taxable 
                        year which includes such month (determined 
                        without regard to any parent with respect to 
                        whom such individual is not a specified child, 
                        determined without regard to subparagraphs (A) 
                        and (B) and after application of this 
                        subparagraph), and
                            ``(iii) in the case of a specified relative 
                        of such individual, the adjusted gross income 
                        of the taxpayer (with respect to whom such 
                        individual would be treated as a specified 
                        child after application of this subparagraph) 
                        for the taxable year which includes such month 
                        is higher than the highest adjusted gross 
                        income of any parent and any specified relative 
                        of the individual for any taxable year which 
                        includes such month (determined without regard 
                        to any parent and any specified relative with 
                        respect to whom such individual is not a 
                        specified child, determined without regard to 
                        subparagraphs (A) and (B) and after application 
                        of this subparagraph).
                    ``(E) Treatment of joint returns.--For purposes of 
                this paragraph, with respect to any month, the adjusted 
                gross income of each person who files a joint return 
                for the taxable year which includes such month is the 
                total adjusted gross income shown on the joint return 
                for the taxable year.
                    ``(F) Parent.--Except as otherwise provided by the 
                Secretary, the term `parent' shall have the same 
                meaning as when used in section 152(c)(4).
            ``(5) Treatment of temporary absences.--Except as provided 
        in regulations or other guidance issued by the Secretary, for 
        purposes of this subsection--
                    ``(A) In general.--In the case of any individual's 
                temporary absence from such individual's principal 
                place of abode, each day composing the temporary 
                absence shall--
                            ``(i) be treated as a day at such 
                        individual's principal place of abode,
                            ``(ii) be treated as satisfying the care 
                        requirement described in paragraph (1)(C) for 
                        each day described in clause (i), and
                            ``(iii) not be treated as a day at any 
                        other location.
                    ``(B) Temporary absence.--For purposes of 
                subparagraph (A), an absence shall be treated as 
                temporary if--
                            ``(i) the individual would have resided at 
                        the place of abode but for the absence, and
                            ``(ii) under the facts and circumstances, 
                        it is reasonable to assume that the individual 
                        will return to reside at the place of abode.
            ``(6) Special rule for divorced parents, etc.--Rules 
        similar to the rules section 152(e) shall apply for purposes of 
        this subsection.
            ``(7) Eligibility determined on basis of presumptive 
        eligibility.--
                    ``(A) In general.--If a period of presumptive 
                eligibility is established under section 7527B(c) for 
                any individual with respect to any taxpayer--
                            ``(i) such individual shall be treated as 
                        the specified child of such taxpayer for any 
                        month in such period of presumptive 
                        eligibility, and
                            ``(ii) such individual shall not be treated 
                        as the specified child of any other taxpayer 
                        with respect to whom a period of presumptive 
                        eligibility has not been established for any 
                        such month.
                    ``(B) Ability of credit claimants to establish 
                presumptive eligibility.--Nothing in section 7527B(c) 
                shall be interpreted to preclude a taxpayer from 
                establishing a period of presumptive eligibility 
                (including any such period described in section 
                7527B(c)(2)(D)) with respect to any specified child for 
                purposes of this section solely because such taxpayer 
                affirmatively elects not to receive monthly advance 
                child payments under section 7527B.
    ``(d) Credit Refundable.--If the taxpayer (in the case of a joint 
return, either spouse) has a principal place of abode (determined as 
provided in section 32) in the United States or Puerto Rico for more 
than one-half of any calendar month during the taxable year, so much of 
the credit otherwise allowed under subsection (a) as is attributable to 
monthly specified child allowances with respect to any such calendar 
month shall be allowed under subpart C (and not allowed under this 
subpart).
    ``(e) Identification Requirements.--
            ``(1) Qualifying child identification requirement.--No 
        credit shall be allowed under this section to a taxpayer with 
        respect to any qualifying child unless the taxpayer includes 
        the name and taxpayer identification number of such qualifying 
        child on the return of tax for the taxable year and such 
        taxpayer identification number was issued on or before the due 
        date for filing such return.
            ``(2) Taxpayer identification requirement.--No credit shall 
        be allowed under this section if the taxpayer identification 
        number of the taxpayer was issued after the due date for filing 
        the return for the taxable year.
    ``(f) Restrictions on Taxpayers Who Improperly Claimed Credit or 
Improperly Received Monthly Advance Child Payment.--
            ``(1) Taxpayers making prior fraudulent or reckless 
        claims.--
                    ``(A) In general.--No credit shall be allowed under 
                this section for any taxable year (and no payment shall 
                be made under section 7527B for any month) in the 
                disallowance period.
                    ``(B) Disallowance period.--For purposes of 
                subparagraph (A), the disallowance period is--
                            ``(i) the period of 10 taxable years after 
                        the most recent taxable year for which there 
                        was a final determination that the taxpayer's 
                        claim of credit under this section or section 
                        24 (or payment received under section 7527A or 
                        7527B) was due to fraud,
                            ``(ii) the period of 2 taxable years after 
                        the most recent taxable year for which there 
                        was a final determination that the taxpayer's 
                        claim of credit under this section or section 
                        24 (or payment received under section 7527A or 
                        7527B) was due to reckless or intentional 
                        disregard of rules and regulations (but not due 
                        to fraud), and
                            ``(iii) in addition to any period 
                        determined under clause (i) or (ii) (as the 
                        case may be), the period beginning on the date 
                        of the final determination described in such 
                        clause and ending with the beginning of the 
                        period described in such clause.
            ``(2) Taxpayers making improper prior claims.--In the case 
        of a taxpayer who is denied credit under this section or 
        section 24 for any taxable year as a result of the deficiency 
        procedures under subchapter B of chapter 63, no credit shall be 
        allowed under this section for any subsequent taxable year (and 
        no payment shall be made under section 7527B for any subsequent 
        month) unless the taxpayer provides such information as the 
        Secretary may require to demonstrate eligibility for such 
        credit.
            ``(3) Coordination with possessions of the united states.--
        For purposes of this subsection, a taxpayer's claim of credit 
        under this section or section 24 (or payment received under 
        section 7527A or section 7527B) includes a claim of credit 
        under this section or section 24 of the income tax law of any 
        jurisdiction other than the United States (or similar payment 
        received under section 7527A or section 7527B of such income 
        tax law), and a claim made or a payment received from American 
        Samoa pursuant to a plan described in subsection (i)(3)(B) or 
        section 24(k)(3)(B).
    ``(g) Reconciliation of Credit and Monthly Advance Child 
Payments.--
            ``(1) In general.--The amount otherwise determined under 
        subsection (a) with respect to any taxpayer for any taxable 
        year shall be reduced (but not below zero) by the aggregate 
        amount of payments made under section 7527B to such taxpayer 
        for one or more calendar months in such taxable year. Any 
        failure to so reduce the credit shall be treated as arising out 
        of a mathematical or clerical error and assessed according to 
        section 6213(b)(1).
            ``(2) Recapture of excess advance payments in certain 
        circumstances.--In the case of a taxpayer described in 
        paragraph (3) for any taxable year, the tax imposed by this 
        chapter for such taxable year shall be increased by the excess 
        (if any) of--
                    ``(A) the aggregate amount of payments made to the 
                taxpayer under section 7527B for one or more calendar 
                months in such taxable year, over
                    ``(B) the amount determined under subsection (a) 
                with respect to the taxpayer for such taxable year 
                (without regard to paragraph (1) of this subsection).
            ``(3) Taxpayers subject to recapture.--
                    ``(A) Fraud or reckless or intentional disregard of 
                rules and regulations.--A taxpayer is described in this 
                paragraph with respect to any taxable year if the 
                Secretary determines that the amount described in 
                paragraph (2)(A) with respect to the taxpayer for such 
                taxable year was determined on the basis of fraud or a 
                reckless or intentional disregard of rules and 
                regulations.
                    ``(B) Understatement of income; changes in filing 
                status.--If the amount described in paragraph (2)(A) 
                with respect to the taxpayer for the taxable year was 
                determined on the basis of an amount of the taxpayer's 
                modified adjusted gross income which was less than the 
                taxpayer's modified adjusted gross income for the 
                applicable taxable year (as defined in subsection 
                (b))--
                            ``(i) such taxpayer shall be treated as 
                        described in this paragraph, and
                            ``(ii) the increase determined under 
                        paragraph (2) by reason of this subparagraph 
                        shall not exceed the excess of--
                                    ``(I) the amount described in 
                                paragraph (2)(A), over
                                    ``(II) the amount which would be so 
                                described if the payments described 
                                therein had been determined on the 
                                basis of the taxpayer's modified 
                                adjusted gross income for the 
                                applicable taxable year (as defined in 
                                subsection (b)).
                        A rule similar to the rule of the preceding 
                        sentence shall apply if the amount described in 
                        paragraph (2)(A) with respect to the taxpayer 
                        for the taxable year was determined on the 
                        basis of a filing status of the taxpayer which 
                        differs from the taxpayer's filing status for 
                        the applicable taxable year (as so defined).
                    ``(C) Payments made outside of period of 
                presumptive eligibility.--If any payment described in 
                paragraph (2)(A) with respect to the taxpayer for the 
                taxable year was made with respect to a child for a 
                month which was not part of a period of presumptive 
                eligibility established under section 7527B(c) for such 
                child with respect to such taxpayer--
                            ``(i) such taxpayer shall be treated as 
                        described in this paragraph, and
                            ``(ii) the increase determined under 
                        paragraph (2) by reason of this subparagraph 
                        shall not exceed the portion of such payment so 
                        made.
                    ``(D) Certain payments made after notice from 
                secretary.--If the Secretary notifies a taxpayer under 
                section 7527B(j)(2) that such taxpayer is subject to 
                recapture with respect to any payments--
                            ``(i) such taxpayer shall be treated as 
                        described in this paragraph, and
                            ``(ii) the increase determined under 
                        paragraph (2) by reason of this subparagraph 
                        shall not exceed the aggregate amount of such 
                        payments.
                    ``(E) Taxpayers moving to another jurisdiction.--To 
                minimize the amount of advance payments made under 
                section 7527B to ineligible individuals, the Secretary 
                shall issue regulations or other guidance for purposes 
                of this paragraph which apply with respect to taxpayers 
                who are described in section 7527B(b)(4) with respect 
                to the reference month but are not so described with 
                respect to one or more months during the taxable year 
                for which advance payments under section 7527B are 
                made.
                    ``(F) Other circumstances to prevent abuse.--A 
                taxpayer is described in this paragraph with respect to 
                any taxable year pursuant to regulations or other 
                guidance of the Secretary describing other recapture 
                circumstances to facilitate the administration and 
                enforcement by the Secretary of section 7527B to 
                minimize the amount of advance payments made under 
                section 7527B to ineligible individuals and to prevent 
                abuse.
            ``(4) Joint returns.--Except as otherwise provided by the 
        Secretary, in the case of an advance payment made under section 
        7527B with respect to a joint return, half of such payment 
        shall be treated as having been made to each individual filing 
        such return.
            ``(5) Coordination with possessions of the united states.--
        For purposes of this subsection, payments made under section 
        7527B include payments made by any jurisdiction other than the 
        United States under section 7527B of the income tax law of such 
        jurisdiction, and advance payments made by American Samoa 
        pursuant to a plan described in subsection (h)(3)(B). Any 
        increase in tax imposed on a taxpayer by reason of paragraph 
        (2) of the income tax law of a jurisdiction other than the 
        United States shall be considered to reduce the aggregate 
        amount of payments made to such taxpayer by such jurisdiction. 
        In carrying out this section, the Secretary shall coordinate 
        with each possession of the United States to prevent any 
        application of this paragraph that is inconsistent with the 
        purposes of this subsection.
    ``(h) Application of Credit in Possessions.--
            ``(1) Mirror code possessions.--
                    ``(A) In general.--The Secretary shall pay to each 
                possession of the United States with a mirror code tax 
                system amounts equal to the loss (if any) to that 
                possession by reason of the application of this section 
                (determined without regard to this subsection) with 
                respect to taxable years beginning in calendar years 
                after 2023. Such amounts shall be determined by the 
                Secretary based on information provided by the 
                government of the respective possession.
                    ``(B) Coordination with credit allowed against 
                united states income taxes.--No credit shall be allowed 
                under this section for any taxable year to any 
                individual to whom a credit is allowable against taxes 
                imposed by a possession of the United States with a 
                mirror code tax system by reason of the application of 
                this section in such possession for such taxable year.
                    ``(C) Mirror code tax system.--For purposes of this 
                paragraph, the term `mirror code tax system' means, 
                with respect to any possession of the United States, 
                the income tax system of such possession if the income 
                tax liability of the residents of such possession under 
                such system is determined by reference to the income 
                tax laws of the United States as if such possession 
                were the United States.
            ``(2) Cross references related to application of credit to 
        residents of puerto rico.--
                    ``(A) For application of refundable credit to 
                residents of Puerto Rico, see subsection (d).
                    ``(B) For application of advance payment to 
                residents of Puerto Rico, see section 7527B(b)(4).
            ``(3) American samoa.--
                    ``(A) In general.--The Secretary shall pay to 
                American Samoa amounts estimated by the Secretary as 
                being equal to the aggregate benefits that would have 
                been provided to residents of American Samoa by reason 
                of the application of this section for taxable years 
                beginning in calendar years after 2023 if the 
                provisions of this section had been in effect in 
                American Samoa (applied as if American Samoa were the 
                United States and without regard to the application of 
                this section to residents of Puerto Rico under 
                subsection (d)).
                    ``(B) Distribution requirement.--Subparagraph (A) 
                shall not apply unless American Samoa has a plan, which 
                has been approved by the Secretary, under which 
                American Samoa will promptly distribute such payments 
                to its residents.
                    ``(C) Coordination with credit allowed against 
                united states income taxes.--
                            ``(i) In general.--In the case of a taxable 
                        year with respect to which a plan is approved 
                        under subparagraph (B), this section (other 
                        than this subsection) shall not apply to any 
                        individual eligible for a distribution under 
                        such plan.
                            ``(ii) Application of section in event of 
                        absence of approved plan.--In the case of a 
                        taxable year with respect to which a plan is 
                        not approved under subparagraph (B), subsection 
                        (d) shall be applied by substituting `, Puerto 
                        Rico, or American Samoa' for `or Puerto Rico'.
            ``(4) Treatment of payments.--For purposes of section 1324 
        of title 31, United States Code, the payments under this 
        subsection shall be treated in the same manner as a refund due 
        from a credit provision referred to in subsection (b)(2) of 
        such section.
    ``(i) Regulations.--The Secretary shall issue such regulations or 
other guidance as the Secretary determines necessary or appropriate to 
carry out the purposes of this section, including regulations or other 
guidance--
            ``(1) for determining whether an individual receives care 
        from a taxpayer for purposes of subsection (c)(1), and
            ``(2) to coordinate or modify the application of this 
        section and sections 24, 7527A, and 7527B in the case of any 
        taxpayer--
                    ``(A) whose taxable year is other than a calendar 
                year,
                    ``(B) whose filing status for a taxable year is 
                different from the status used for determining one or 
                more monthly payments under section 7527B during such 
                taxable year, or
                    ``(C) whose principal place of abode for any month 
                is different from the principal place of abode used for 
                determining the monthly payment under section 7527B for 
                such month.

``SEC. 24B. CREDIT FOR CERTAIN OTHER DEPENDENTS.

    ``(a) In General.--There shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an amount equal to 
$500 with respect to each specified dependent of such taxpayer for such 
taxable year.
    ``(b) Limitation Based on Modified Adjusted Gross Income.--
            ``(1) In general.--The amount of the credit allowable under 
        subsection (a) shall be reduced (but not below zero) by $50 for 
        each $1,000 (or fraction thereof) by which the taxpayer's 
        modified adjusted gross income exceeds the threshold amount.
            ``(2) Threshold amount.--For purposes of this subsection, 
        the term `threshold amount' means--
                    ``(A) $400,000, in the case of a joint return or 
                surviving spouse (as defined in section 2(a)),
                    ``(B) $300,000, in the case of a head of household 
                (as defined in section 2(b)), and
                    ``(C) $200,000, in any other case.
            ``(3) Modified adjusted gross income.--For purposes of this 
        subsection, the term `modified adjusted gross income' means 
        adjusted gross income increased by any amount excluded from 
        gross income under section 911, 931, or 933.
    ``(c) Specified Dependent.--For purposes of this section, the term 
`specified dependent' means, with respect to any taxpayer for any 
taxable year, any dependent of such taxpayer for such taxable year 
unless such dependent--
            ``(1) is a specified child of the taxpayer, or any other 
        taxpayer, for any month during such taxable year, or
            ``(2) would not be a dependent if subparagraph (A) of 
        section 152(b)(3) were applied without regard to all that 
        follows `resident of the United States'.
    ``(d) Identification Requirements.--Rules similar to the rules of 
section 24A(e) shall apply for purposes of this section.
    ``(e) Taxable Year Must Be Full Taxable Year.--Except in the case 
of a taxable year closed by reason of the death of the taxpayer, no 
credit shall be allowable under this section in the case of a taxable 
year covering a period of less than 12 months.
    ``(f) Regulations.--The Secretary shall issue such regulations or 
other guidance as the Secretary determines necessary or appropriate to 
carry out the purposes of this section.''.
    (b) Monthly Payment of Child Tax Credit.--Chapter 77 of such Code 
is amended by inserting after section 7527A the following new section:

``SEC. 7527B. MONTHLY PAYMENTS OF CHILD TAX CREDIT.

    ``(a) In General.--The Secretary shall establish a program for 
making payments to taxpayers with respect to each calendar month equal 
to the monthly advance child payment determined with respect to such 
taxpayer for such month.
    ``(b) Monthly Advance Child Payment.--For purposes of this section 
and except as otherwise provided in this section, the term `monthly 
advance child payment' means, with respect to any taxpayer for any 
calendar month, the amount (if any) which is estimated by the Secretary 
as being equal to the monthly specified child allowance which would be 
determined under section 24A(b) with respect to such taxpayer for such 
calendar month if--
            ``(1) unless determined by the Secretary based on any 
        information known to the Secretary, the only specified children 
        of such taxpayer for such calendar month are the specified 
        children of such taxpayer for the reference month,
            ``(2) unless determined by the Secretary based on any 
        information known to the Secretary, the ages of such children 
        (and the status of such children as specified children) are 
        determined for such calendar month by taking into account the 
        passage of time since such reference month,
            ``(3) the limitations of section 24A(b)(2) were applied 
        with respect to the reference taxable year rather than with 
        respect to the applicable taxable year, and
            ``(4) unless determined by the Secretary based on any 
        information known to the Secretary, no monthly specified child 
        allowance were determined with respect to such taxpayer for 
        such calendar month unless the taxpayer (in the case of a joint 
        return, either spouse) has a principal place of abode 
        (determined as provided in section 32) in the United States or 
        Puerto Rico for more than one-half of the reference month.
    ``(c) Presumptive Eligibility.--
            ``(1) In general.--An individual shall be treated as a 
        specified child of a taxpayer for purposes of determining any 
        monthly advance child payment under this section only if such 
        month is part of the period of presumptive eligibility 
        determined by the Secretary under this subsection with respect 
        to such specified child and such taxpayer (determined by 
        treating the month described in subclause (I) of paragraph 
        (2)(A)(ii) as being the first month beginning after the 
        determination described in such subclause).
            ``(2) Period of presumptive eligibility.--For purposes of 
        this section--
                    ``(A) In general.--Except as otherwise provided by 
                the Secretary, the term `period of presumptive 
                eligibility' means the period--
                            ``(i) beginning with the month for which 
                        presumptive eligibility is established, and
                            ``(ii) ending with the earliest of--
                                    ``(I) the beginning of the month 
                                described in clause (i) if the 
                                Secretary determines that the taxpayer 
                                committed fraud or intentionally 
                                disregarded rules or regulations in 
                                establishing or maintaining presumptive 
                                eligibility,
                                    ``(II) in the case of any 
                                notification from the Secretary that 
                                the period of presumptive eligibility 
                                has been terminated or suspended by 
                                reason of any question regarding 
                                eligibility of the taxpayer for monthly 
                                advance child payments with respect to 
                                such child, the month specified in such 
                                notice as the month on which such 
                                termination or suspension begins, and
                                    ``(III) the month following any 
                                failure of the taxpayer to make the 
                                required annual renewal of presumptive 
                                eligibility by such date as the 
                                Secretary may provide.
                    ``(B) Establishing presumptive eligibility.--A 
                taxpayer shall establish presumptive eligibility with 
                respect to any specified child for any month at such 
                time and in such manner as the Secretary may provide. 
                Except as otherwise provided by the Secretary, in order 
                to establish a period of presumptive eligibility the 
                taxpayer must express a reasonable expectation and 
                intent that the taxpayer will continue to be eligible 
                with respect to such specified child for at least the 
                two months following the month for which presumptive 
                eligibility is to be established.
                    ``(C) Method of establishing presumptive 
                eligibility.--The Secretary shall ensure information to 
                establish presumptive eligibility under this paragraph 
                may be provided on the return of tax for the taxable 
                year ending before the calendar year which includes the 
                month for which such eligibility is to be established, 
                through the on-line portal described in subsection (e), 
                or in such other manner as the Secretary may provide.
                    ``(D) Inclusion of automatic grace periods and 
                periods of hardship.--The period of presumptive 
                eligibility shall include any period to which paragraph 
                (1) or (2) of subsection (g) applies.
                    ``(E) Automatic eligibility for birth of child.--
                The Secretary shall issue regulations or other guidance 
                to establish procedures pursuant to which, to the 
                maximum extent administratively practicable--
                            ``(i) a parent of a child born during a 
                        calendar month shall be treated as 
                        automatically establishing presumptive 
                        eligibility with respect to such child,
                            ``(ii) the period of such automatic 
                        presumptive eligibility is determined, and
                            ``(iii) the first monthly advance child 
                        payment with respect to such child is increased 
                        to properly take into account the months in the 
                        period of such automatic presumptive 
                        eligibility which precede such payment.
                    ``(F) Presumptive eligibility based on certain 
                government programs.--The Secretary shall issue 
                regulations or other guidance to establish procedures 
                under which--
                            ``(i) based on information provided to the 
                        Secretary by one or more government entities, a 
                        parent or specified relative of a child is 
                        treated as automatically establishing 
                        presumptive eligibility with respect to such 
                        child, and
                            ``(ii) the period for which such automatic 
                        presumptive eligibility is determined 
                        (including any additional circumstances under 
                        which such period will terminate).
                    ``(G) Coordination with presumption.--For purposes 
                of determining the status of any individual as a 
                specified child for purposes of determining presumptive 
                eligibility with respect to any period, section 24A(c) 
                shall be applied without regard to paragraph (7) 
                thereof.
            ``(3) Notice of termination of presumptive eligibility by 
        reason of failure to make annual renewal.--If a taxpayer's 
        period of presumptive eligibility with respect to any specified 
        child terminates by reason of paragraph (2)(A)(ii)(III), the 
        Secretary shall provide the taxpayer a written notice of such 
        termination.
    ``(d) Determination of Reference Month and Reference Taxable 
Year.--For purposes of this section--
            ``(1) Reference month.--The term `reference month' means, 
        with respect to any taxpayer for any calendar month, the most 
        recent of--
                    ``(A) in the case of a taxpayer who filed a return 
                of tax for the last taxable year ending before such 
                calendar month, the last month of such taxable year,
                    ``(B) in the case of a taxpayer who filed a return 
                of tax for the taxable year preceding the taxable year 
                described in subparagraph (A), the last month of such 
                preceding taxable year, and
                    ``(C) in the case of a taxpayer who provides, 
                through a specified alternative mechanism, information 
                which is sufficient to estimate the taxpayer's monthly 
                advance child payment for such month, such month.
            ``(2) Reference taxable year.--The term `reference taxable 
        year' means, with respect to any taxpayer for any calendar 
        month, the most recent of--
                    ``(A) the taxable year described in subparagraph 
                (A) or (B) of paragraph (1), or
                    ``(B) in the case of a taxpayer who provides, 
                through a specified alternative mechanism, information 
                which is sufficient to estimate the taxpayer's modified 
                adjusted gross income for the taxable year which 
                includes such month, such taxable year.
            ``(3) Availability of information.--Any month or year 
        referred to in subparagraph (A), (B), or (C) of paragraph (1) 
        or subparagraph (A) or (B) of paragraph (2) shall not be taken 
        into account in determining the reference month or reference 
        taxable year with respect to any calendar month unless all 
        relevant information with respect to such month or year is 
        available to the Secretary and the Secretary has adequate time 
        to make estimates under this section on the basis of such 
        information before the beginning of such calendar month.
            ``(4) Treatment of insufficient information.--Except as 
        otherwise provided by the Secretary--
                    ``(A) if a taxpayer is not described in 
                subparagraph (A), (B), or (C) of paragraph (1) with 
                respect to any calendar month, the monthly advance 
                child payment with respect to such taxpayer for such 
                calendar month shall be treated as zero unless the 
                Secretary determines that the Secretary can make the 
                estimate described in subsection (b) on the basis of 
                information known to the Secretary which the Secretary 
                determines is reasonably reliable, and
                    ``(B) if the taxpayer is not described in paragraph 
                (1)(C) and the information on the return of tax 
                referred to in subparagraph (A) or (B) of paragraph (1) 
                does not establish the status of the taxpayer (in the 
                case of a joint return, either spouse) as having a 
                principal place of abode (determined as provided in 
                section 32) in the United States or Puerto Rico for 
                more than one-half of the reference month, the 
                Secretary shall determine such status based on 
                information known to the Secretary.
            ``(5) Transition rule.--In any case with respect to which 
        section 24A was not in effect for the taxable year described in 
        subparagraph (A), (B), or (C) of paragraph (1) (whichever is 
        applicable), subsection (b)(1) shall be applied by substituting 
        `the qualifying children of such taxpayer for the taxable year 
        which includes the reference month' for `the specified children 
        of such taxpayer for the reference month'.
    ``(e) On-Line Information Portal; Specified Alternative 
Mechanisms.--
            ``(1) On-line information portal.--The Secretary shall 
        establish an on-line portal which allows taxpayers to--
                    ``(A) subject to such restrictions as the Secretary 
                may provide, elect to begin or cease receiving payments 
                under this section, and
                    ``(B) provide information to the Secretary which is 
                relevant in determining the monthly advance child 
                payment and the taxpayer's eligibility for such 
                payment, including information regarding--
                            ``(i) the number of the taxpayer's 
                        specified children, including by reason of the 
                        birth of a child,
                            ``(ii) the taxpayer's marital status,
                            ``(iii) the taxpayer's modified adjusted 
                        gross income,
                            ``(iv) the taxpayer's principal place of 
                        abode, and
                            ``(v) any other factor which the Secretary 
                        may provide.
            ``(2) Specified alternative mechanism.--For purposes of 
        this section, the term `specified alternative mechanism' means 
        the on-line portal established under paragraph (1), the on-line 
        portal established under section 7527A, and any other mechanism 
        or method established by the Secretary to allow taxpayer's to 
        provide the information described in paragraph (1) (including 
        in connection with the filing of any return of tax).
            ``(3) Availability in multiple languages.--The Secretary 
        shall ensure that the on-line portal described in paragraph (1) 
        is available in multiple languages.
    ``(f) Specified Child of More Than 1 Taxpayer.--
            ``(1) In general.--In the event that (without regard to 
        this paragraph) a period of presumptive eligibility with 
        respect to the same specified child would exist for more than 1 
        taxpayer at the same time--
                    ``(A) except as otherwise provided in this section 
                or by the Secretary, a period of presumptive 
                eligibility shall exist only respect to the taxpayer 
                with the most recent reference month,
                    ``(B) the Secretary shall establish procedures 
                under which the Secretary expeditiously adjudicates 
                taxpayers' competing claims of presumptive eligibility 
                with respect to the same child, and
                    ``(C) the Secretary shall notify any taxpayer of 
                the termination of a period of presumptive eligibility 
                pursuant to this subsection.
            ``(2) Provisions related to adjudication.--
                    ``(A) Expedited process; appeals.--The procedures 
                established under paragraph (1)(B) shall include--
                            ``(i) an expedited process for taxpayers 
                        who meet such requirements as the Secretary may 
                        establish for such expedited process, and
                            ``(ii) procedures for adjudicating an 
                        appeal of an adverse decision.
                    ``(B) Information receipt and coordination.--The 
                Secretary may enter into agreements to receive 
                information from, and otherwise coordinate with--
                            ``(i) Federal agencies (including the 
                        Social Security Administration and the 
                        Department of Agriculture),
                            ``(ii) any State, local government, Tribal 
                        government, or possession of the United States, 
                        and
                            ``(iii) any other individual or entity that 
                        the Secretary determines to be appropriate for 
                        purposes of adjudicating a competing claim 
                        described in paragraph (1).
                    ``(C) Adjudication not treated as assessment.--An 
                adjudication under the procedures established under 
                paragraph (1)(B) (including the adjudication of any 
                appeal) shall not be treated as an assessment described 
                in section 6201.
                    ``(D) Adjudication not treated as inspection of 
                taxpayer's books of account.--The inspection of a 
                taxpayer's books of account in connection with any 
                adjudication under the procedures established under 
                paragraph (1)(B) (including the adjudication of any 
                appeal) shall not be treated as an examination or 
                inspection of a taxpayer's books of account for 
                purposes of section 7605(b).
            ``(3) Retroactive payments.--If, pursuant to the procedures 
        established under paragraph (1)(B), the Secretary determines 
        that a child is a specified child of a taxpayer and the 
        Secretary did not make payments to such taxpayer with respect 
        to such child for any portion of the period during which the 
        determination was made, the Secretary may make a one-time 
        payment to the taxpayer with respect to which such child is the 
        specified child in an amount equal to the aggregate amount by 
        which the monthly advance child payments to such taxpayer would 
        have increased during such period if such determination had 
        been made immediately.
            ``(4) Recapture of payments.--If, pursuant to the 
        procedures established under paragraph (1)(B), the Secretary 
        makes payments with respect to the child during the period 
        during which the determination is made--
                    ``(A) the Secretary shall provide each taxpayer 
                which receives such payments notice that such payments 
                may be subject to recapture, and
                    ``(B) upon making such determination, the Secretary 
                shall determine on the basis of the facts and 
                circumstances of each such taxpayer whether any such 
                payments should be subject to recapture and shall so 
                notify each such taxpayer.
    ``(g) Rules Related to Grace Periods and Hardships.--
            ``(1) Automatic grace period.--
                    ``(A) In general.--Notwithstanding subsection (f), 
                in the case of any failure or delay in establishing a 
                period of presumptive eligibility with respect to which 
                the taxpayer elects the application of this 
                subparagraph, credit under section 24A or retroactive 
                payment under this section (similar to the payment 
                described in subsection (f)(3)) shall be allowed or 
                made with respect to so much of the period of such 
                failure or delay as does not exceed 3 months. The 
                preceding sentence shall not apply if the Secretary 
                determines that such failure or delay was due to fraud 
                or reckless or intentional disregard of rules and 
                regulations.
                    ``(B) Limitation.--Subparagraph (A) shall not apply 
                with respect to any taxpayer more than once during any 
                36-month period.
            ``(2) Hardship.--Notwithstanding subsection (f), if the 
        Secretary determines that a failure or delay in establishing a 
        period of presumptive eligibility with respect to any specified 
        child was due to domestic violence, serious illness, natural 
        disaster, or any other hardship, credit under section 24A or 
        retroactive payment under this section (similar to the payment 
        described in subsection (f)(3)) shall be allowed or made with 
        respect to so much of the period of such failure or delay as 
        does not exceed 6 months.
    ``(h) Provisions Related to Form, Manner, and Treatment of 
Payments.--
            ``(1) Application of electronic funds payment 
        requirement.--The payments made by the Secretary under 
        subsection (a) shall be made by electronic funds transfer to 
        the same extent and in the same manner as if such payments were 
        Federal payments not made under this title.
            ``(2) Delivery of payments.--Notwithstanding any other 
        provision of law, the Secretary may certify and disburse 
        refunds payable under this section electronically to--
                    ``(A) any account to which the payee authorized, on 
                or after January 1, 2023, the delivery of a refund of 
                taxes under this title or of a Federal payment (as 
                defined in section 3332 of title 31, United States 
                Code),
                    ``(B) any account belonging to a payee from which 
                that individual, on or after January 1, 2023, made a 
                payment of taxes under this title, or
                    ``(C) any Treasury-sponsored account (as defined in 
                section 208.2 of title 31, Code of Federal 
                Regulations).
            ``(3) Waiver of certain rules.--Notwithstanding section 
        3325 of title 31, United States Code, or any other provision of 
        law, with respect to any payment of a refund under this 
        section, a disbursing official in the executive branch of the 
        United States Government may modify payment information 
        received from an officer or employee described in section 
        3325(a)(1)(B) of such title for the purpose of facilitating the 
        accurate and efficient delivery of such payment. Except in 
        cases of fraud or reckless neglect, no liability under section 
        3325, 3527, 3528, or 3529 of title 31, United States Code, 
        shall be imposed with respect to payments made under this 
        paragraph.
            ``(4) Exception from reduction or offset.--Any applicable 
        payment (as defined in paragraph (5)(E)(iii)) shall not be--
                    ``(A) subject to reduction or offset pursuant to 
                section 3716 or 3720A of title 31, United States Code,
                    ``(B) subject to reduction or offset pursuant to 
                subsection (c), (d), (e), or (f) of section 6402, or
                    ``(C) reduced or offset by other assessed Federal 
                taxes that would otherwise be subject to levy or 
                collection.
            ``(5) Assignment of benefits.--
                    ``(A) In general.--The right of any person to any 
                applicable payment shall not be transferable or 
                assignable, at law or in equity, and no applicable 
                payment shall be subject to, execution, levy, 
                attachment, garnishment, or other legal process, or the 
                operation of any bankruptcy or insolvency law.
                    ``(B) Encoding of payments.--In the case of an 
                applicable payment described in subparagraph 
                (E)(iii)(I) that is paid electronically by direct 
                deposit through the Automated Clearing House (ACH) 
                network, the Secretary of the Treasury (or the 
                Secretary's delegate) shall--
                            ``(i) issue the payment using a unique 
                        identifier that is reasonably sufficient to 
                        allow a financial institution to identify the 
                        payment as an applicable payment, and
                            ``(ii) further encode the payment pursuant 
                        to the same specifications as required for a 
                        benefit payment defined in section 212.3 of 
                        title 31, Code of Federal Regulations.
                    ``(C) Garnishment.--
                            ``(i) Encoded payments.--In the case of a 
                        garnishment order that applies to an account 
                        that has received an applicable payment that is 
                        encoded as provided in subparagraph (B), a 
                        financial institution shall follow the 
                        requirements and procedures set forth in part 
                        212 of title 31, Code of Federal Regulations, 
                        except--
                                    ``(I) notwithstanding section 212.4 
                                of title 31, Code of Federal 
                                Regulations (and except as provided in 
                                subclause (II)), a financial 
                                institution shall not fail to follow 
                                the procedures of sections 212.5 and 
                                212.6 of such title with respect to a 
                                garnishment order merely because such 
                                order has attached, or includes, a 
                                notice of right to garnish federal 
                                benefits issued by a State child 
                                support enforcement agency, and
                                    ``(II) a financial institution 
                                shall not, with regard to any 
                                applicable payment, be required to 
                                provide the notice referenced in 
                                sections 212.6 and 212.7 of title 31, 
                                Code of Federal Regulations.
                            ``(ii) Other payments.--In the case of a 
                        garnishment order (other than an order that has 
                        been served by the United States) that has been 
                        received by a financial institution and that 
                        applies to an account into which an applicable 
                        payment that has not been encoded as provided 
                        in subparagraph (B) has been deposited 
                        electronically on any date during the lookback 
                        period or into which an applicable payment that 
                        has been deposited by check on any date in the 
                        lookback period, the financial institution, 
                        upon the request of the account holder, shall 
                        treat the amount of the funds in the account at 
                        the time of the request, up to the amount of 
                        the applicable payment (in addition to any 
                        amounts otherwise protected under part 212 of 
                        title 31, Code of Federal Regulations), as 
                        exempt from a garnishment order without 
                        requiring the consent of the party serving the 
                        garnishment order or the judgment creditor.
                            ``(iii) Liability.--A financial institution 
                        that acts in good faith in reliance on clauses 
                        (i) or (ii) shall not be subject to liability 
                        or regulatory action under any Federal or State 
                        law, regulation, court or other order, or 
                        regulatory interpretation for actions 
                        concerning any applicable payments.
                    ``(D) No reclamation rights.--This paragraph shall 
                not alter the status of applicable payments as tax 
                refunds or other nonbenefit payments for purpose of any 
                reclamation rights of the Department of the Treasury or 
                the Internal Revenue Service as per part 210 of title 
                31, Code of Federal Regulations.
                    ``(E) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Account holder.--The term `account 
                        holder' means a natural person whose name 
                        appears in a financial institution's records as 
                        the direct or beneficial owner of an account.
                            ``(ii) Account review.--The term `account 
                        review' means the process of examining deposits 
                        in an account to determine if an applicable 
                        payment has been deposited into the account 
                        during the lookback period. The financial 
                        institution shall perform the account review 
                        following the procedures outlined in section 
                        212.5 of title 31, Code of Federal Regulations 
                        and in accordance with the requirements of 
                        section 212.6 of title 31, Code of Federal 
                        Regulations.
                            ``(iii) Applicable payment.--The term 
                        `applicable payment' means--
                                    ``(I) any payment made to an 
                                individual under this section (other 
                                than any payment made pursuant to 
                                paragraph (6)),
                                    ``(II) any advance payment made by 
                                a possession of the United States with 
                                a mirror code tax system (as defined in 
                                section 24(h)) pursuant to an election 
                                under paragraph (6)(B) which 
                                corresponds to a payment described in 
                                subclause (I), and
                                    ``(III) any advance payment made by 
                                American Samoa pursuant to a program 
                                for making such payments which is 
                                described in paragraph (6)(C)(ii).
                            ``(iv) Garnishment.--The term `garnishment' 
                        means execution, levy, attachment, garnishment, 
                        or other legal process.
                            ``(v) Garnishment order.--The term 
                        `garnishment order' means a writ, order, 
                        notice, summons, judgment, levy, or similar 
                        written instruction issued by a court, a State 
                        or State agency, a municipality or municipal 
                        corporation, or a State child support 
                        enforcement agency, including a lien arising by 
                        operation of law for overdue child support or 
                        an order to freeze the assets in an account, to 
                        effect a garnishment against a debtor.
                            ``(vi) Lookback period.--The term `lookback 
                        period' means the two month period that begins 
                        on the date preceding the date of account 
                        review and ends on the corresponding date of 
                        the month two months earlier, or on the last 
                        date of the month two months earlier if the 
                        corresponding date does not exist.
            ``(6) Application of advance payments in the possessions of 
        the united states.--
                    ``(A) Puerto rico.--
                            ``(i) For application of child tax credit 
                        to residents of Puerto Rico, see section 
                        24A(d).
                            ``(ii) For application of monthly advance 
                        child payments to residents of Puerto Rico, see 
                        subsection (b)(4).
                    ``(B) Mirror code possessions.--In the case of any 
                possession of the United States with a mirror code tax 
                system (as defined in section 24A(h)(1)(C)), this 
                section shall not be treated as part of the income tax 
                laws of the United States for purposes of determining 
                the income tax law of such possession unless such 
                possession elects to have this section be so treated.
                    ``(C) Administrative expenses of advance 
                payments.--
                            ``(i) Mirror code possessions.--In the case 
                        of any possession described in subparagraph (B) 
                        which makes the election described in such 
                        subparagraph, the amount otherwise paid by the 
                        Secretary to such possession under section 
                        24A(h)(1)(A) with respect to taxable years 
                        beginning in 2024, 2025, and 2026 shall each be 
                        increased by $300,000 if such possession has a 
                        plan, which has been approved by the Secretary, 
                        for making monthly advance child payments 
                        consistent with such election.
                            ``(ii) American samoa.--The amount 
                        otherwise paid by the Secretary to American 
                        Samoa under subparagraph (A) of section 
                        24A(h)(3) with respect to taxable years 
                        beginning in 2024, 2025, and 2026 shall each be 
                        increased by $300,000 if the plan described in 
                        subparagraph (B) of such section includes a 
                        program, which has been approved by the 
                        Secretary, for making monthly advance child 
                        payments under rules similar to the rules of 
                        this section.
                            ``(iii) Timing of payment.--The Secretary 
                        may pay, upon the request of the possession of 
                        the United States to which the payment is to be 
                        made, the amount of the increase determined 
                        under clause (i) or (ii), respectively, 
                        immediately upon approval of the plan with 
                        respect to which such payment relates.
    ``(i) Application of Certain Definitions and Rules Applicable to 
Child Tax Credit.--
            ``(1) Definitions.--Except as otherwise provided in this 
        section, terms used in this section which are also used in 
        section 24A shall have the same respective meanings as when 
        used in section 24A.
            ``(2) Treatment of certain deaths.--A child shall not be 
        taken into account in determining the monthly advance child 
        payment for any calendar month if the death of such child 
        before the end of such month is known to the Secretary as of 
        date on which the Secretary estimates such payment.
            ``(3) Identification requirements.--Rules similar to the 
        rules which apply under section 24A(e) shall apply for purposes 
        of this section except that such rules shall apply with respect 
        to the return of tax for the reference taxable year or, in the 
        case of information provided through a specified alternative 
        mechanism, with respect to the information provided through 
        such mechanism.
            ``(4) Restrictions on taxpayers who improperly claimed 
        credit or received monthly advance child payments.--For 
        restrictions on taxpayers who improperly claimed credit or 
        received monthly advance child payments, see section 24A(f).
    ``(j) Notice of Payments.--
            ``(1) In general.--Not later than January 31 of the 
        calendar year following any calendar year during which the 
        Secretary makes one or more payments to any taxpayer under this 
        section, the Secretary shall provide such taxpayer with a 
        written notice which includes--
                    ``(A) the taxpayer's taxpayer identity (as defined 
                in section 6103(b)(6)),
                    ``(B) the aggregate amount of such payments made to 
                such taxpayer during such calendar year, and
                    ``(C) such other information as the Secretary 
                determines appropriate.
            ``(2) Certain payments subject to recapture.--In the case 
        of any payments made to a taxpayer which the Secretary has 
        determined are subject to recapture, the notice provided under 
        paragraph (1) to such taxpayer shall include the amount of such 
        payments.
    ``(k) Notification of Certain Events.--With respect to any taxpayer 
receiving monthly advance child payments under this section with 
respect to any specified child, the Secretary shall, to the maximum 
extent practicable, provide reasonable advance notice of each of the 
following:
            ``(1) Any month with respect to which such monthly advance 
        child payment will increase (relative to the preceding month) 
        by reason of an inflation adjustment under section 
        24A(b)(3)(A).
            ``(2) Any month with respect to which such monthly advance 
        child payment will be reduced (relative to the preceding month) 
        by reason of such child ceasing to be a specified child by 
        reason of attaining age 18.
            ``(3) In the case of a taxpayer with a specified child 
        described in section 24A(b)(1)(A), any month with respect to 
        which such monthly advance child payment will be reduced by 
        reason of such child attaining age 6.
    ``(l) Regulations.--The Secretary shall issue such regulations or 
other guidance as the Secretary determines necessary or appropriate to 
carry out the purposes of this section.''.
    (c) Termination of Annual Child Tax Credit.--Section 24 of such 
Code is amended by adding at the end the following new subsection:
    ``(l) Termination.--This section shall not apply to (and no payment 
shall be made under subsection (k) with respect to) any taxable year 
beginning after December 31, 2023.''.
    (d) Disclosure of Information Relating to Advance Payment of Child 
Tax Credit.--Section 6103(e) of such Code is amended by adding at the 
end the following new paragraph:
            ``(12) Disclosure of information relating to advance 
        payment of child tax credit.--
                    ``(A) Joint filers.--In the case of an individual 
                to whom the Secretary makes payments under section 
                7527A or who is eligible for monthly advance child 
                payments under section 7527B, if the reference taxable 
                year (as defined in section 7527A(b)(2) or 7527B(d)(2), 
                as the case may be) that the Secretary uses to 
                calculate such payments is a year for which the 
                individual filed an income tax return jointly with 
                another individual, the Secretary may disclose to such 
                individual any information which is relevant in 
                determining the payment under section 7527A, or the 
                monthly advance child payment under section 7527B, and 
                the individual's eligibility for such payment, 
                including information regarding any of the following:
                            ``(i) The number of specified children, 
                        including by reason of the birth of a child.
                            ``(ii) The name and TIN of specified 
                        children.
                            ``(iii) Marital status.
                            ``(iv) Modified adjusted gross income.
                            ``(v) Principal place of abode.
                            ``(vi) Any other factor which the Secretary 
                        may provide pursuant to section 7527A(c) or 
                        7527B(e).
                    ``(B) Competing claimants.--In the case of an 
                individual who has a competing claim of presumptive 
                eligibility with respect to a specified child under 
                section 7527B(f)(1), the Secretary may disclose to such 
                individual return information provided by another 
                individual who has a competing claim of presumptive 
                eligibility with respect to the same specified child in 
                the course of the Secretary's adjudication of that 
                competing claim, as well as any other information 
                considered by the Secretary with respect to that 
                competing claim. Such information shall be limited to 
                the items specified in subparagraph (A) and the 
                following:
                            ``(i) Information received under any 
                        agreements or coordination the Secretary 
                        entered into with--
                                    ``(I) any State, local government, 
                                Tribal government, or possession of the 
                                United States, or
                                    ``(II) any other individual or 
                                entity that the Secretary determines to 
                                be appropriate for purposes of 
                                adjudicating a competing claim.
                            ``(ii) Information considered by the 
                        Secretary about where and with whom the 
                        specified child resided.
                            ``(iii) Information considered by the 
                        Secretary about expenditures made by the 
                        claimants to the extent such payments relate to 
                        the competing claim.''.
    (e) Conforming Amendments.--
            (1) Section 26(b)(2) of such Code is amended by striking 
        ``and'' at the end of subparagraph (Y), by striking the period 
        at the end of subparagraph (Z) and inserting ``, and'', and by 
        adding at the end the following new subparagraph:
                    ``(AA) section 24A(g)(2) (relating to recapture of 
                certain monthly advance child payments).''.
            (2) Section 152(f)(6)(B)(ii) of such Code is amended to 
        read as follows:
                            ``(ii) the credits under sections 24, 24A, 
                        and 24B and the payments under sections 7527A 
                        and 7527B,''.
            (3) Section 3402(f)(1)(C) of such Code is amended by 
        inserting ``or section 24A (determined after application of 
        subsection (g) thereof)'' after ``section 24 (determined after 
        application of subsection (j) thereof)''.
            (4) Section 6103(l)(13)(A)(v) of such Code is amended by 
        insert ``or section 24A, as the case may be'' after ``section 
        24''.
            (5) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``24A by reason of subsection (d) thereof,'' after 
        ``24 by reason of subsections (d) and (i)(1) thereof,''.
            (6) Section 6213(g)(2)(I) of such Code is amended by 
        inserting ``or section 24A(e) (relating to monthly child tax 
        credit)'' after ``section 24(e) (relating to child tax 
        credit)''.
            (7) Section 6213(g)(2)(L) of such Code is amended by 
        inserting ``24A,'' after ``24,''.
            (8) Section 6213(g)(2)(P) of such Code is amended--
                    (A) by inserting ``or 24A(f)(2)'' after ``section 
                24(g)(2)'',
                    (B) by inserting ``or 24A'' after ``under section 
                24'', and
                    (C) by striking ``subsection (g)(1) thereof'' and 
                inserting ``section 24(g)(1) or section 24A(f)(1), 
                respectively''.
            (9) Section 6695(g)(2) of such Code is amended by inserting 
        ``24A,'' after ``24,''.
            (10) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, as amended by the preceding provisions of this 
        Act, is amended--
                    (A) by inserting ``24A,'' after ``24,'', and
                    (B) by inserting ``7527B,'' after ``7527A,''.
            (11) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 24 
        the following new items:

``Sec. 24A. Monthly child tax credit.
``Sec. 24B. Credit for certain other dependents.''.
            (12) The table of sections for chapter 77 of such Code is 
        amended by inserting after the item relating to section 7527A 
        the following new item:

``Sec. 7527B. Monthly payments of child tax credit.''.
    (f) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2023.
            (2) Monthly advance child payments.--The amendments made by 
        subsection (b) shall apply to calendar months beginning after 
        December 31, 2023.
            (3) Information disclosure.--The amendment made by 
        subsection (d) shall take effect on the date of the enactment 
        of this Act.

SEC. 6. CAPITAL GAINS RATES NOT APPLICABLE TO CERTAIN HIGH INCOME 
              TAXPAYERS.

    (a) In General.--Section 1(h)(1) of the Internal Revenue Code of 
1986 is amended by inserting ``and the taxable income of such taxpayer 
for such taxable year does not exceed $1,000,000 (half such amount in 
the case of a married individual filing a separate return)'' after ``If 
a taxpayer has a net capital gain for any taxable year''.
    (b) Inflation Adjustment.--Section 1(h) of such Code is amended by 
adding at the end the following new paragraph:
            ``(12) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2024, the $1,000,000 amount in 
                paragraph (1) shall 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 2022' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                    ``(B) Rounding.--If any increase under subparagraph 
                (A) is not a multiple of $50, such dollar amount shall 
                be rounded to the next lowest multiple of $50.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

SEC. 7. INCREASE IN RATES OF CERTAIN CORPORATE TAXES.

    (a) Corporate Income Tax Rate.--Section 11(b) of the Internal 
Revenue Code of 1986 is amended by striking ``21 percent'' and 
inserting ``28 percent''.
    (b) Rate of Tax on Repurchase of Corporate Stock.--Section 4501(a) 
of such Code is amended by striking ``1 percent'' and inserting ``4 
percent''.
    (c) Corporate Alternative Minimum Tax Rate.--Section 55(b)(2)(A)(i) 
of such Code is amended to read as follows:
                            ``(i) the sum of--
                                    ``(I) 15 percent of so much of the 
                                adjusted financial statement income (as 
                                defined in section 56A) as does not 
                                exceed $5,000,000,000, plus
                                    ``(II) 25 percent of so much of 
                                such adjusted financial statement 
                                income as exceeds $5,000,000,000,''.
    (d) Effective Dates.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.
                                 <all>