[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3787 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 3787

 To amend the Internal Revenue Code of 1986 to increase the credit for 
employers establishing workplace child care facilities, to increase the 
   child care credit to encourage greater use of quality child care 
services, to provide incentives for students to earn child care-related 
   degrees and to work in child care facilities, and to increase the 
       exclusion for employer-provided dependent care assistance.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             February 8 (legislative day, February 7), 2024

     Mrs. Shaheen (for herself, Mr. King, Ms. Klobuchar, and Mrs. 
  Gillibrand) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to increase the credit for 
employers establishing workplace child care facilities, to increase the 
   child care credit to encourage greater use of quality child care 
services, to provide incentives for students to earn child care-related 
   degrees and to work in child care facilities, and to increase the 
       exclusion for employer-provided dependent care assistance.

    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 ``Right Start Child Care and Education 
Act of 2024''.

SEC. 2. INCREASE IN EMPLOYER-PROVIDED CHILD CARE CREDIT.

    (a) Increase in Creditable Percentage of Child Care Expenditures.--
Paragraph (1) of section 45F(a) of the Internal Revenue Code of 1986 is 
amended by striking ``25 percent'' and inserting ``50 percent''.
    (b) Increase in Creditable Percentage of Resource and Referral 
Expenditures.--Paragraph (2) of section 45F(a) of the Internal Revenue 
Code of 1986 is amended by striking ``10 percent'' and inserting ``20 
percent''.
    (c) Increase in Maximum Credit.--Subsection (b) of section 45F of 
the Internal Revenue Code of 1986 is amended by striking ``$150,000'' 
and inserting ``$500,000''.
    (d) Special Rule for Small Businesses.--Section 45F(e) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new paragraph:
            ``(4) Small businesses.--
                    ``(A) In general.--In the case of a taxpayer 
                described in subparagraph (B)--
                            ``(i) subsection (a)(1) shall be applied by 
                        substituting `60 percent' for `50 percent', and
                            ``(ii) subsection (b) shall be applied by 
                        substituting `$600,000' for `$500,000'.
                    ``(B) Taxpayer described.--A taxpayer described in 
                this subparagraph is a taxpayer that meets the gross 
                receipts test of section 448(c), determined--
                            ``(i) by substituting `5-taxable-year' for 
                        `3-taxable-year' in paragraph (1) thereof, and
                            ``(ii) by substituting `5-year' for `3-
                        year' each place such term appears in paragraph 
                        (3)(A) thereof.''.
    (e) Treatment of Jointly Owned or Operated Childcare Facility.--
Section 45F(c)(1) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subparagraph:
                    ``(C) Jointly owned or operated childcare 
                facility.--For purposes of subparagraph (A)(i)(I), a 
                facility shall not fail to be treated as a qualified 
                childcare facility of the taxpayer merely because such 
                facility is jointly owned or operated by the taxpayer 
                and other persons.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.

SEC. 3. 3-YEAR CREDIT FOR INDIVIDUALS HOLDING CHILD CARE-RELATED 
              DEGREES WHO WORK IN LICENSED CHILD CARE FACILITIES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 36B the following new section:

``SEC. 36C. RIGHT START CHILD CARE AND EDUCATION CREDIT.

    ``(a) In General.--In the case of an individual who is an eligible 
child care provider for the taxable year, there shall be allowed as a 
credit against the tax imposed by this chapter for the taxable year the 
amount of--
            ``(1) $4,000, in the case of an eligible child care 
        provider with a degree described in subsection (c)(1)(A)(i), 
        and
            ``(2) $2,500, in any other case.
    ``(b) 3-Year Credit.--
            ``(1) In general.--The credit allowable by subsection (a) 
        for any taxable year to an individual shall be allowed for such 
        year only if the individual elects the application of this 
        section for such year.
            ``(2) Election.--An election to have this section apply may 
        not be made by an individual for any taxable year if such an 
        election by such individual is in effect for any 3 prior 
        taxable years.
    ``(c) Eligible Child Care Provider.--For purposes of this section--
            ``(1) In general.--The term `eligible child care provider' 
        means, for any taxable year, any individual if--
                    ``(A) as of the close of such taxable year, such 
                individual holds--
                            ``(i) a bachelor's degree, or
                            ``(ii) an associate's degree,
                in early childhood education, child care, or a related 
                degree, and such degree was awarded by an eligible 
                educational institution (as defined in section 
                25A(f)(2)), and
                    ``(B) during such taxable year, such individual 
                performs at least 1,200 hours of child care services at 
                a facility if--
                            ``(i) the principal use of the facility is 
                        to provide child care services,
                            ``(ii) no more than 25 percent of the 
                        children receiving child care services at the 
                        facility are children (as defined in section 
                        152(f)) of the individual or such individual's 
                        spouse, and
                            ``(iii) the facility meets the requirements 
                        of all applicable laws and regulations of the 
                        State or local government in which it is 
                        located, including the licensing of the 
                        facility as a child care facility.
                Subparagraph (B)(i) shall not apply to a facility which 
                is the principal residence (within the meaning of 
                section 121) of the operator of the facility.
            ``(2) Child care services.--The term `child care services' 
        means child care and early childhood education.''.
    (b) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) of the Internal Revenue Code of 
        1986 is amended by inserting ``, 36C'' after ``36B''.
            (2) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``, 36C'' after ``36B''.
    (c) Clerical Amendment.--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 new item:

``Sec. 36C. Right start child care and education credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.

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

    (a) In General.--Section 129(a)(2)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``$5,000 ($2,500'' and inserting ``the 
applicable limitation amount (half such amount''.
    (b) Conforming Amendment.--Section 129(a)(2) of the Internal 
Revenue Code of 1986 is amended by striking subparagraph (D) and by 
inserting after subparagraph (C) the following new subparagraph:
                    ``(D) Applicable limitation amount.--For purposes 
                of this paragraph, the term `applicable limitation 
                amount' means the amount that is the sum of--
                            ``(i) $10,000, and
                            ``(ii) $2,000 for each individual described 
                        in subparagraph (A) or (B) of section 21(b)(1) 
                        with respect to the taxpayer.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
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