To amend the Internal Revenue Code of 1986 to expand the dependent care tax credit, to accelerate the child tax credit, and to promote dependent care assistance programs.

February 13, 2003

Mr. ROBERTS (for himself, Mrs. HUTCHISON, Ms. COLLINS, and Mr. JEFFORDS) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Internal Revenue Code of 1986 to expand the dependent care tax credit, to accelerate the child tax credit, and to promote dependent care assistance programs.

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 `A Boost for Child Care Act'.

SEC. 2. EXPANSION OF DEPENDENT CARE TAX CREDIT.

(a) PERCENTAGE OF EMPLOYMENT-RELATED EXPENSES DETERMINED BY TAXPAYER STATUS- Paragraph (2) of section 21(a) of the Internal Revenue Code of 1986 (relating to credit for expenses for household and dependent care services necessary for gainful employment) is amended to read as follows:

`(2) APPLICABLE PERCENTAGE DEFINED- For purposes of paragraph (1), the term `applicable percentage' means 50 percent reduced (but not below zero) by 1 percentage point for each $1,500, or fraction thereof, by which the taxpayer's adjusted gross income for the taxable year exceeds $30,000.'.

(b) MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS- Section 21(e) of the Internal Revenue Code of 1986 (relating to special rules) is amended by adding at the end the following new paragraph:

`(11) MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS- Notwithstanding subsection (d), in the case of any taxpayer with 1 or more qualifying individuals described in subsection (b)(1)(A) under the age of 4 at any time during the taxable year, such taxpayer shall be deemed to have employment-related expenses with respect to such qualifying individuals in an amount equal to the greater of--

`(A) the amount of employment-related expenses incurred for such qualifying individuals for the taxable year (determined under this section without regard to this paragraph), or

`(B) $150 for each month in such taxable year during which such qualifying individual is under the age of 4.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2003.

SEC. 3. ACCELERATION OF CHILD TAX CREDIT.

(a) IN GENERAL- Subsection (a) of section 24 of the Internal Revenue Code of 1986 (relating to child tax credit) is amended to read as follows:

`(a) ALLOWANCE OF CREDIT- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer an amount equal to $1,000.'.

(b) CONFORMING AMENDMENTS-

(1) REPEAL OF AMENDMENT- Section 201(a) of the Economic Growth and Tax Relief Reconciliation Act of 2001 is repealed.

(2) REPEAL OF SUNSET- Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 (relating to sunset of provisions of such Act) shall not apply to section 201 (other than subsection (a) of such section) of such Act.

SEC. 4. PROMOTION OF DEPENDENT CARE ASSISTANCE PROGRAMS.

(a) IN GENERAL- The Secretary of Labor shall establish a program to promote awareness of the use of dependent care assistance programs (as described in section 129(d) of the Internal Revenue Code of 1986) by employers.

(b) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out the program under subsection (a) $1,000,000 for each of fiscal years 2004, 2005, 2006, and 2007.

END