To amend the Internal Revenue Code of 1986 to accelerate the increase in the child tax credit and to expand the refundability of such credit, and for other purposes.

April 30, 2003

Mrs. LINCOLN (for herself, Mr. ROCKEFELLER, Mr. BINGAMAN, and Mr. BREAUX) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Internal Revenue Code of 1986 to accelerate the increase in the child tax credit and to expand the refundability of such credit, 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. EXPANSION OF CHILD TAX CREDIT.

(a) ACCELERATION OF INCREASE IN CREDIT- 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) EXPANSION OF CREDIT REFUNDABILITY-

(1) IN GENERAL- Clause (i) of section 24(d)(1)(B) of the Internal Revenue Code of 1986 (relating to portion of credit refundable) is amended to read as follows:

`(i) 15 percent of so much of the taxpayer's earned income (within the meaning of section 32) which is taken into account in computing taxable income for the taxable year as exceeds $7,500, or'.

(2) CONFORMING AMENDMENT- Section 24(d) of such Code is amended by striking paragraph (3).

(c) INCREASE IN AGE OF QUALIFYING CHILD- Section 24(c)(1)(B) of the Internal Revenue Code of 1986 (defining qualifying child) is amended by striking `age of 17' and inserting `age of 19'.

(d) EFFECTIVE DATES-

(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2002.

(2) SUBSECTION (c)- The amendment made by subsection (c) shall apply to calendar years beginning after 2002.

END