[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7360 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 7360

 To amend the Internal Revenue Code of 1986 to increase and make fully 
  refundable the Child and Dependent Care Tax Credit, to increase the 
   maximum amount excludable from gross income for employer-provided 
           dependent care assistance, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 14, 2024

  Ms. Tenney (for herself and Mr. Schneider) introduced the following 
      bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to increase and make fully 
  refundable the Child and Dependent Care Tax Credit, to increase the 
   maximum amount excludable from gross income for employer-provided 
           dependent care assistance, 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.

    This Act may be cited as the ``Promoting Affordable Childcare for 
Everyone Act'' or the ``PACE Act''.

SEC. 2. REFUNDABILITY OF CHILD AND DEPENDENT CARE TAX CREDIT.

    (a) In General.--The Internal Revenue Code of 1986 is amended--
            (1) by redesignating section 21 as section 36C; and
            (2) by moving section 36C, as so redesignated, from subpart 
        A of part IV of subchapter A of chapter 1 to the location 
        immediately before section 37 in subpart C of part IV of 
        subchapter A of chapter 1.
    (b) Technical Amendments.--
            (1) Paragraph (1) of section 23(f) of the Internal Revenue 
        Code of 1986 is amended by striking ``21(e)'' and inserting 
        ``36C(e)''.
            (2) Paragraph (6) of section 35(g) of such Code is amended 
        by striking ``21(e)'' and inserting ``36C(e)''.
            (3) Paragraph (1) of section 36C(a) of such Code (as 
        redesignated by subsection (a)) is amended by striking ``this 
        chapter'' and inserting ``this subtitle''.
            (4) Subparagraph (C) of section 129(a)(2) of such Code is 
        amended by striking ``section 21(e)'' and inserting ``section 
        36C(e)''.
            (5) Paragraph (2) of section 129(b) of such Code is amended 
        by striking ``section 21(d)(2)'' and inserting ``section 
        36C(d)(2)''.
            (6) Paragraph (1) of section 129(e) of such Code is amended 
        by striking ``section 21(b)(2)'' and inserting ``section 
        36C(b)(2)''.
            (7) Subsection (e) of section 213 of such Code is amended 
        by striking ``section 21'' and inserting ``section 36C''.
            (8) Subparagraph (H) of section 6213(g)(2) of such Code is 
        amended by striking ``section 21'' and inserting ``section 
        36C''.
            (9) Subparagraph (L) of section 6213(g)(2) of such Code is 
        amended by inserting ``36C,'' after ``32,''.
            (10) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36C,'' after ``36B,''.
            (11) The table of sections for subpart C 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 36B 
        the following:

``Sec. 36C. Expenses for household and dependent care services 
                            necessary for gainful employment.''.
            (12) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 21.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

SEC. 3. ENHANCEMENT OF THE CHILD AND DEPENDENT CARE TAX CREDIT.

    (a) In General.--Section 36C of the Internal Revenue Code of 1986, 
as redesignated by section 2 of this Act, is amended--
            (1) in paragraph (2) of subsection (a), by striking ``35 
        percent reduced (but not below 20 percent)'' and inserting ``50 
        percent reduced (but not below 35 percent)'';
            (2) by striking subsection (g) and redesignating subsection 
        (f) as subsection (g); and
            (3) by inserting after subsection (e) the following new 
        subsection:
    ``(f) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 2023, each of the dollar amounts in subsections 
        (a)(2) and (c) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) 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.
            ``(2) Rounding.--If any increase determined under paragraph 
        (1) is not a multiple of $50, such increase shall be rounded to 
        the nearest multiple of $50.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

SEC. 4. INCREASE IN EXCLUSION FOR EMPLOYER-PROVIDED DEPENDENT CARE 
              ASSISTANCE.

    (a) In General.--Subparagraph (A) of section 129(a)(2) of the 
Internal Revenue Code of 1986 (relating to dependent care assistance 
programs) is amended by striking ``$5,000 ($2,500'' and inserting 
``$7,500 (half such dollar amount''.
    (b) Inflation Adjustment.--Paragraph (2) of section 129(a) of such 
Code is amended by striking subparagraph (D) and inserting the 
following new subparagraph:
                    ``(D) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2024, 
                the $7,500 amount in subparagraph (A) 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 2023' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                Any increase determined under the preceding sentence 
                shall be rounded to the nearest multiple of $100.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.
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