[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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