HR 4039

110th CONGRESS
1st Session

H. R. 4039

To amend the Internal Revenue Code of 1986 to increase, expand the availability of, and repeal the sunset with respect to, the dependent care tax credit.

IN THE HOUSE OF REPRESENTATIVES

November 1, 2007

Mr. BARROW 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, expand the availability of, and repeal the sunset with respect to, the dependent care tax credit.

    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 `Child Care Family Tax Relief Act of 2007'.

SEC. 2. INCREASE AND INFLATION ADJUSTMENT FOR DEPENDENT CARE CREDIT.

    (a) In General-

      (1) INCREASE- Paragraph (2) of section 21(a) of the Internal Revenue Code of 1986 (relating to expenses for household and dependent care services necessary for gainful employment) is amended to read as follows:

      `(2) APPLICABLE PERCENTAGE- The term `applicable percentage' means--

        `(A) 40 percent in the case of a taxpayer whose adjusted gross income is $70,000 or less, and

        `(B) 20 percent in the case of any other taxpayer.'.

      (2) INFLATION ADJUSTMENT- Section 21 of such Code is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection:

    `(f) Cost-of-Living Adjustment- In the case of any taxable year beginning in a calendar year after 2007, the $70,000 amount contained in subsection (a)(2)(A) shall be increased by an amount equal to--

      `(1) such dollar amount, multiplied by

      `(2) 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 2006' for `calendar year 1992' in subparagraph (B) thereof.

    Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000.'.

    (b) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2006.

SEC. 3. INCREASE IN DEPENDENT CARE CREDIT MADE PERMANENT.

    Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the amendments made by section 204 of such Act (relating to dependent care credit).

END