To amend the Internal Revenue Code of 1986 to allow all taxpayers who maintain households with dependents a credit for dependents.

January 7, 2003

Mr. RYUN of Kansas introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to allow all taxpayers who maintain households with dependents a credit for dependents.

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 `Family Care Tax Credit Act'.

SEC. 2. HOUSEHOLDS WITH DEPENDENTS.

(a) ALLOWANCE OF CREDIT- Paragraph (1) of section 21(a) of the Internal Revenue Code of 1986 (relating to allowance of credit for expenses for household and dependent care services necessary for gainful employment) is amended by striking `employment-related expenses (as defined in subsection (b)(2)) paid by such individual during the taxable year' and inserting `allowable amount'.

(b) APPLICABLE PERCENTAGE DEFINED- Paragraph (2) of section 21(a) of such Code (relating to applicable percentage defined) is amended--

(1) by striking `35 percent reduced (but not below 20 percent)' and inserting `50 percent reduced', and

(2) by striking `$15,000' and inserting `$30,000'.

(c) DOLLAR LIMIT- Subsection (c) of section 21 of such Code is amended to read as follows:

`(c) ALLOWABLE AMOUNT-

`(1) IN GENERAL- The allowable amount which may be taken into account under subsection (a) is the sum of--

`(A) $250 times the number of months in the taxable year of the taxpayer during which there is not 1 day on which the taxpayer is gainfully employed, plus

`(B) the employment-related expenses paid by the taxpayer during the taxable year.

`(2) LIMITATION- The amount determined under paragraph (1) shall not exceed--

`(A) $3,000 if there is 1 qualifying individual with respect to the taxpayer for such taxable year, or

`(B) $6,000 if there are 2 or more qualifying individuals with respect to the taxpayer for such taxable year.

`(3) REDUCTION FOR EMPLOYER-PROVIDED DEPENDENT CARE ASSISTANCE- The amount determined under paragraph (1) (after the application of paragraph (2)) shall be reduced by the aggregate amount excludable from gross income under section 129 for the taxable year.'.

(d) CONFORMING AMENDMENTS-

(1) The heading for section 21 of such Code is amended to read as follows:

`SEC. 21. HOUSEHOLDS WITH DEPENDENTS.'

(2) Paragraph (2) of section 21(d) of such Code is amended--

(A) in subparagraph (A) by striking `subsection (c)(1)' and inserting `subsection (c)(2)(A)', and

(B) in subparagraph (B) by striking `subsection (c)(2)' and inserting `subsection (c)(2)(B)'.

(3) Subparagraph (H) of section 6213(g)(2) of such Code is amended by striking `expenses for household and dependent care services necessary for gainful employment' and inserting `households with dependents'.

(e) CLERICAL AMENDMENT- The item relating to section 21 in the table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended to read as follows:

`Sec. 21. Households with dependents.'

(f) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

END