[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 928 Introduced in House (IH)]

<DOC>






117th CONGRESS
  1st Session
                                H. R. 928

To amend the Internal Revenue Code of 1986 to make the child tax credit 
  fully refundable, establish an increased child tax credit for young 
                   children, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 8, 2021

  Ms. DeLauro (for herself, Ms. DelBene, Mr. Torres of New York, Mr. 
  Smith of Washington, Ms. Schakowsky, Ms. Bonamici, Mr. Carson, Mr. 
  Horsford, Mrs. Beatty, Mrs. Demings, Mr. Lowenthal, Mr. Michael F. 
Doyle of Pennsylvania, Ms. Lee of California, Mrs. Luria, Mr. Gallego, 
  Mrs. Carolyn B. Maloney of New York, Mr. Hastings, Ms. Norton, Ms. 
  Scanlon, Mr. Panetta, Mr. Evans, Mr. Connolly, Mr. Malinowski, Ms. 
Dean, Mr. Lieu, Mr. Garcia of Illinois, Mr. Sarbanes, Mr. DeFazio, Mr. 
Kilmer, Mr. McGovern, Ms. Wasserman Schultz, Ms. Pingree, Ms. Barragan, 
Mr. Doggett, Ms. Roybal-Allard, Mr. Blumenauer, Mr. Bowman, Mr. Welch, 
  Mr. Danny K. Davis of Illinois, Ms. Lofgren, Mr. Butterfield, Mrs. 
Hayes, Mrs. Kirkpatrick, Mrs. Watson Coleman, Mr. Sires, Mr. Cohen, Mr. 
 Soto, Mr. Langevin, Ms. Schrier, Ms. Meng, Mr. Grijalva, Ms. Jackson 
 Lee, Ms. Escobar, Ms. Clark of Massachusetts, Mr. Courtney, Ms. Ross, 
  Ms. Sherrill, Ms. Brownley, Ms. Houlahan, Mr. Crow, Mr. Lynch, Mr. 
  Tonko, Mr. Keating, Mr. Cooper, Ms. Ocasio-Cortez, Mr. Morelle, Mr. 
  Espaillat, Ms. Matsui, Mr. Trone, Mr. McNerney, Mr. Price of North 
Carolina, Ms. Wild, Ms. DeGette, Ms. Kelly of Illinois, Mr. Meeks, Mr. 
Sablan, Mr. Larson of Connecticut, Ms. Speier, Mr. Higgins of New York, 
Mr. Pocan, Mr. Cardenas, Mr. Vargas, Ms. Sewell, Ms. Manning, Miss Rice 
of New York, Mr. Carbajal, Mr. Cuellar, Mr. David Scott of Georgia, Ms. 
  Leger Fernandez, Mr. Suozzi, Mr. Jones, Ms. Sanchez, Ms. Craig, Ms. 
 Garcia of Texas, Ms. Moore of Wisconsin, Mr. Veasey, Mr. Nadler, Mr. 
Foster, Mr. Takano, Mr. Yarmuth, Mr. Johnson of Georgia, Ms. Bass, Mr. 
   Pallone, Ms. Titus, Ms. Blunt Rochester, Ms. Omar, Ms. Tlaib, Ms. 
   Kuster, Ms. Lois Frankel of Florida, Mr. Sherman, Mr. Ryan, Mrs. 
   Lawrence, Mr. DeSaulnier, Mrs. Trahan, Mr. Lawson of Florida, Ms. 
    Wilson of Florida, Mr. Kahele, Mrs. Napolitano, Ms. Williams of 
Georgia, Mr. Khanna, Mr. Payne, Ms. Clarke of New York, Ms. Strickland, 
Ms. Jacobs of California, Ms. Kaptur, Mr. O'Halleran, Mr. Jeffries, Mr. 
    Neguse, Mr. Larsen of Washington, Ms. Chu, Mr. Cartwright, Ms. 
  McCollum, Ms. Velazquez, Mr. Sean Patrick Maloney of New York, Mr. 
Kildee, Mr. Hoyer, Mr. Costa, Mr. Levin of California, Mr. Auchincloss, 
 Mr. Beyer, Ms. Newman, Mr. Raskin, Ms. Castor of Florida, Mr. Gomez, 
  Ms. Jayapal, Mr. Himes, Mr. Moulton, Mr. Casten, Mrs. Dingell, Mr. 
   Brown, Mrs. Torres of California, Mr. Huffman, Ms. Plaskett, Mr. 
Pascrell, Mr. Quigley, Mr. Scott of Virginia, and Ms. Eshoo) 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 make the child tax credit 
  fully refundable, establish an increased child tax credit for young 
                   children, 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. SHORT TITLE.

    This Act may be cited as the ``American Family Act of 2021''.

SEC. 2. ESTABLISHMENT OF FULLY REFUNDABLE CHILD TAX CREDIT.

    (a) Elimination of Existing Child Tax Credit.--Subpart A of part IV 
of subchapter A of chapter 1 of subtitle A of the Internal Revenue Code 
of 1986 is amended by striking section 24.
    (b) Establishment of Fully Refundable Child Tax Credit.--Subpart C 
of part IV of subchapter A of chapter 1 of subtitle A of such Code is 
amended by inserting after section 36B the following new section:

``SEC. 36C. CHILD TAX CREDIT.

    ``(a) Allowance of Credit.--In the case of an eligible individual, 
there shall be allowed as a credit against the tax imposed by this 
chapter for the taxable year an amount equal to the sum of--
            ``(1) with respect to each qualifying child of the taxpayer 
        who has attained 6 years of age before the close of such 
        taxable year and for which the taxpayer is allowed a deduction 
        under section 151, an amount equal to $3,000, and
            ``(2) with respect to each qualifying child of the taxpayer 
        who has not attained 6 years of age before the close of such 
        taxable year and for which the taxpayer is allowed a deduction 
        under section 151, an amount equal to 120 percent of the dollar 
        amount in paragraph (1).
    ``(b) Limitation.--
            ``(1) In general.--The amount of the credit allowable under 
        subsection (a) shall be reduced (but not below zero) by the 
        applicable amount for each $1,000 (or fraction thereof) by 
        which the taxpayer's modified adjusted gross income exceeds the 
        threshold amount. For purposes of the preceding sentence, the 
        term `modified adjusted gross income' means adjusted gross 
        income increased by any amount excluded from gross income under 
        section 911, 931, or 933.
            ``(2) Threshold amount.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `threshold amount' means--
                            ``(i) $180,000 in the case of a joint 
                        return,
                            ``(ii) $130,000 in the case of an 
                        individual who is not married, and
                            ``(iii) $90,000 in the case of a married 
                        individual filing a separate return.
                    ``(B) Marital status.--For purposes of this 
                paragraph, marital status shall be determined under 
                section 7703.
            ``(3) Applicable amount.--For purposes of paragraph (1), 
        the term `applicable amount' means an amount equal to the 
        quotient of--
                    ``(A) the amount of the credit allowable under 
                subsection (a), as determined without regard to this 
                subsection, divided by
                    ``(B) an amount equal to the product of--
                            ``(i) $20, multiplied by
                            ``(ii) the total number of qualifying 
                        children of the taxpayer.
    ``(c) Qualifying Child.--For purposes of this section--
            ``(1) In general.--The term `qualifying child' means a 
        qualifying child of the taxpayer (as defined in section 152(c)) 
        who has not attained 18 years of age.
            ``(2) Exception for certain non-citizens.--The term 
        `qualifying child' shall not include any individual who would 
        not be a dependent if subparagraph (A) of section 152(b)(3) 
        were applied without regard to all that follows `resident of 
        the United States'.
    ``(d) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means, with respect to any taxable year, any 
individual if such individual's principal place of abode is in the 
United States (as determined under section 32(c)(4)) for more than one-
half of such taxable year.
    ``(e) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 2021, the $3,000 amount in subsection (a)(1) 
        shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under paragraph (2) for the calendar year in which the 
                taxable year begins.
            ``(2) Cost-of-living adjustment.--For purposes of paragraph 
        (1), the cost-of-living adjustment for any calendar year is the 
        percentage (if any) by which--
                    ``(A) the CPI for the preceding calendar year (as 
                determined pursuant to section 1(f)(4)), exceeds
                    ``(B) the CPI for calendar year 2020.
            ``(3) Rounding.--If any increase determined under paragraph 
        (1) is not a multiple of $50, such increase shall be rounded to 
        the nearest multiple of $50.
    ``(f) Partial Non-Refundable Credit Allowed for Certain Other 
Dependents.--
            ``(1) In general.--In the case of a taxable year beginning 
        after December 31, 2020, and before January 1, 2026, the 
        aggregate credits allowed to a taxpayer under subpart A shall 
        be increased by $500 for each dependent of the taxpayer (as 
        defined in section 152) other than a qualifying child described 
        in subsection (c). The amount of the credit allowed under this 
        subsection shall not be treated as a credit allowed under this 
        subpart.
            ``(2) Exception for certain noncitizens.--Paragraph (1) 
        shall not apply with respect to any individual who would not be 
        a dependent if subparagraph (A) of section 152(b)(3) were 
        applied without regard to all that follows `resident of the 
        United States'.
            ``(3) Limitation.--
                    ``(A) In general.--The amount of the credit 
                allowable under paragraph (1) shall be reduced (but not 
                below zero) by $50 for each $1,000 (or fraction 
                thereof) by which the taxpayer's modified adjusted 
                gross income exceeds the threshold amount.
                    ``(B) Modified adjusted gross income.--For purposes 
                of subparagraph (A), the term `modified adjusted gross 
                income' means adjusted gross income increased by any 
                amount excluded from gross income under section 911, 
                931, or 933.
                    ``(C) Threshold amount.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the term `threshold amount' 
                        means--
                                    ``(I) $200,000 in the case of a 
                                joint return,
                                    ``(II) $150,000 in the case of an 
                                individual who is not married, and
                                    ``(III) $100,000 in the case of a 
                                married individual filing a separate 
                                return.
                            ``(ii) Marital status.--For purposes of 
                        this subparagraph, marital status shall be 
                        determined under section 7703.
    ``(g) Identification Requirements.--
            ``(1) Qualifying child and dependent identification 
        requirement.--No credit shall be allowed under this section to 
        a taxpayer with respect to any qualifying child or dependent 
        unless the taxpayer includes the name and taxpayer 
        identification number of such qualifying child or dependent on 
        the return of tax for the taxable year and such taxpayer 
        identification number was issued on or before the due date for 
        filing such return.
            ``(2) Taxpayer identification requirement.--No credit shall 
        be allowed under this section if the taxpayer identification 
        number of the taxpayer was issued after the due date for filing 
        the return for the taxable year.
    ``(h) Taxable Year Must Be Full Taxable Year.--Except in the case 
of a taxable year closed by reason of the death of the taxpayer, no 
credit shall be allowable under this section in the case of a taxable 
year covering a period of less than 12 months.
    ``(i) Restrictions on Taxpayers Who Improperly Claimed Credit in 
Prior Year.--
            ``(1) Taxpayers making prior fraudulent or reckless 
        claims.--
                    ``(A) In general.--No credit shall be allowed under 
                this section for any taxable year in the disallowance 
                period.
                    ``(B) Disallowance period.--For purposes of 
                subparagraph (A), the disallowance period is--
                            ``(i) the period of 10 taxable years after 
                        the most recent taxable year for which there 
                        was a final determination that the taxpayer's 
                        claim of credit under this section was due to 
                        fraud, and
                            ``(ii) the period of 2 taxable years after 
                        the most recent taxable year for which there 
                        was a final determination that the taxpayer's 
                        claim of credit under this section was due to 
                        reckless or intentional disregard of rules and 
                        regulations (but not due to fraud).
            ``(2) Taxpayers making improper prior claims.--In the case 
        of a taxpayer who is denied credit under this section for any 
        taxable year as a result of the deficiency procedures under 
        subchapter B of chapter 63, no credit shall be allowed under 
        this section for any subsequent taxable year unless the 
        taxpayer provides such information as the Secretary may require 
        to demonstrate eligibility for such credit.
    ``(j) Reconciliation of Credit and Advance Credit.--
            ``(1) In general.--The amount of the credit allowed under 
        this section to any taxpayer for any taxable year shall be 
        reduced (but not below zero) by the aggregate amount of 
        payments made under section 7527A to such taxpayer during such 
        taxable year.
            ``(2) Excess advance payments.--If the aggregate amount of 
        payments under section 7527A to the taxpayer during the taxable 
        year exceeds the amount of the credit allowed under this 
        section to such taxpayer for such taxable year (determined 
        without regard to paragraph (1)), the tax imposed by this 
        chapter for such taxable year shall be increased by the amount 
        of such excess.''.
    (c) Advance Payment of Credit.--Chapter 77 of the Internal Revenue 
Code of 1986 is amended by inserting after section 7527 the following 
new section:

``SEC. 7527A. ADVANCE PAYMENT OF CHILD TAX CREDIT.

    ``(a) In General.--As soon as practicable after the date of the 
enactment of this section, the Secretary shall establish a program for 
making monthly payments to taxpayers which, in the aggregate during any 
calendar year, equal the annual advance amount determined with respect 
to such taxpayer for such calendar year.
    ``(b) Annual Advance Amount.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `annual advance amount' means, with 
        respect to any taxpayer for any calendar year, the amount of 
        the credit which would be allowed to such taxpayer under 
        section 36C(a) (determined without regard to subsection (j) 
        thereof) for the taxpayer's taxable year beginning in such 
        calendar year if--
                    ``(A) the taxpayer's modified adjusted gross income 
                for such taxable year were equal to the taxpayer's 
                modified adjusted gross income for the reference 
                taxable year,
                    ``(B) the only qualifying children of such taxpayer 
                are qualifying children properly claimed on the 
                taxpayer's return of tax for the reference taxable 
                year, and
                    ``(C) the age of such qualifying children is 
                determined for such taxable year by taking into account 
                the passage of time since the reference taxable year.
            ``(2) Reference taxable year.--Except as provided in 
        paragraph (3)(A), the term `reference taxable year' means, with 
        respect to any taxpayer for any calendar year, the taxpayer's 
        taxable year beginning in the preceding calendar year or, in 
        the case of taxpayer who did not file a return of tax for such 
        taxable year, the taxpayer's taxable year beginning in the 
        second preceding calendar year.
            ``(3) Modifications during calendar year.--The Secretary 
        may modify, during any calendar year, the annual advance amount 
        with respect to any taxpayer for such calendar year to take 
        into account--
                    ``(A) a return of tax filed by such taxpayer during 
                such calendar year (and the taxable year to which such 
                return relates may be taken into account as the 
                reference taxable year), and
                    ``(B) any other information provided by the 
                taxpayer to the Secretary which allows the Secretary to 
                determine payments under subsection (a) which, in the 
                aggregate during any taxable year of the taxpayer, more 
                closely total the Secretary's best estimate of the 
                credit allowed to the taxpayer under section 36C(a) 
                (determined without regard to subsection (i) thereof) 
                for such taxable year.
    ``(c) On-Line Information Portal.--The Secretary shall establish an 
on-line portal which allows taxpayers to--
            ``(1) elect not to receive payments under this section,
            ``(2) provide information to the Secretary which would be 
        relevant to a modification under subsection (b)(3)(B) of the 
        annual advance amount, including information regarding--
                    ``(A) a change in the number of the taxpayer's 
                qualifying children, including by reason of the birth 
                of a child,
                    ``(B) a change in the taxpayer's marital status,
                    ``(C) a significant change in the taxpayer's 
                modified adjusted gross income, and
                    ``(D) any other factor which the Secretary may 
                provide.
    ``(d) Notice of Payments.--Not later than January 31 of the 
calendar year following any calendar year during which the Secretary 
makes one or more payments to any taxpayer under this section, the 
Secretary shall provide such taxpayer with a written notice which 
includes the taxpayer's taxpayer identity (as defined in section 
6103(b)(6)), the aggregate amount of such payments made to such 
taxpayer during such calendar year, and such other information as the 
Secretary determines appropriate.
    ``(e) Authority To Adjust Interval of Payments.--If the Secretary 
determines that it is not administratively feasible to make monthly 
payments under this section, such payments shall be made on the basis 
of the shortest interval which the Secretary determines is 
administratively feasible.''.
    (d) Conforming Amendments.--
            (1) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of subtitle A of the Internal Revenue 
        Code of 1986 is amended by striking the item relating to 
        section 24.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of subtitle A of such Code is amended 
        by inserting after the item relating to section 36B the 
        following:

``Sec. 36C. Child tax credit.''.
            (3) The table of sections for chapter 77 of such Code is 
        amended by inserting after the item relating to section 7527 
        the following new item:

``Sec. 7527A. Advance payment of child tax credit.''.
            (4) Subparagraph (B) of section 45R(f)(3) of such Code is 
        amended to read as follows:
                    ``(B) Special rule.--Any amounts paid pursuant to 
                an agreement under section 3121(l) (relating to 
                agreements entered into by American employers with 
                respect to foreign affiliates) which are equivalent to 
                the taxes referred to in subparagraph (A) shall be 
                treated as taxes referred to in such subparagraph.''.
            (5) Section 152(f)(6)(B)(ii) of such Code is amended by 
        striking ``section 24'' and inserting ``section 36C''.
            (6) Paragraph (26) of section 501(c) of such Code is 
        amended in the flush matter at the end by striking ``section 
        24(c))'' and inserting ``section 36C(c))''.
            (7) Section 6211(b)(4)(A) of such Code is amended--
                    (A) by striking ``24(d),''; and
                    (B) by inserting ``36C(a),'' after ``36B,''.
            (8) Section 6213(g)(2) of such Code is amended--
                    (A) in subparagraph (I), by striking ``section 
                24(e)'' and inserting ``section 36C(g)''; and
                    (B) in subparagraph (L), by striking ``24, or 32'' 
                and inserting ``32, or 36C''.
            (9) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36C,'' after ``36B,''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2020.

SEC. 3. PAYMENTS TO POSSESSIONS.

    (a) Mirror Code Possession.--The Secretary of the Treasury shall 
pay to each possession of the United States with a mirror code tax 
system amounts equal to the loss to that possession by reason of the 
application of section 36C of the Internal Revenue Code of 1986 (as 
added by section 2) with respect to taxable years beginning after 2020. 
Such amounts shall be determined by the Secretary of the Treasury based 
on information provided by the government of the respective possession.
    (b) Other Possessions.--The Secretary of the Treasury shall pay to 
each possession of the United States which does not have a mirror code 
tax system amounts estimated by the Secretary of the Treasury as being 
equal to the aggregate benefits that would have been provided to 
residents of such possession by reason of the application of section 
36C of such Code (as so added) for taxable years beginning after 2020 
if a mirror code tax system had been in effect in such possession. The 
preceding sentence shall not apply with respect to any possession of 
the United States unless such possession has a plan, which has been 
approved by the Secretary of the Treasury, under which such possession 
will promptly distribute such payments to the residents of such 
possession.
    (c) Coordination With Credit Allowed Against United States Income 
Taxes.--No credit shall be allowed against United States income taxes 
for any taxable year under section 36C of the Internal Revenue Code of 
1986 (as so added) to any person--
            (1) to whom a credit is allowed against taxes imposed by 
        the possession by reason of the amendments made by this section 
        for such taxable year; or
            (2) who is eligible for a payment under a plan described in 
        subsection (b) with respect to such taxable year.
    (d) Definitions and Special Rules.--
            (1) Possession of the united states.--For purposes of this 
        section, the term ``possession of the United States'' includes 
        the Commonwealth of Puerto Rico and the Commonwealth of the 
        Northern Mariana Islands.
            (2) Mirror code tax system.--For purposes of this section, 
        the term ``mirror code tax system'' means, with respect to any 
        possession of the United States, the income tax system of such 
        possession if the income tax liability of the residents of such 
        possession under such system is determined by reference to the 
        income tax laws of the United States as if such possession were 
        the United States.
            (3) Treatment of payments.--For purposes of section 
        1324(b)(2) of title 31, United States Code, the payments under 
        this section shall be treated in the same manner as a refund 
        due from the credit allowed under section 36C of the Internal 
        Revenue Code of 1986.
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