[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 1426 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 1426
To amend the Internal Revenue Code of 1986 to establish a refundable
tax credit for parents.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 28, 2021
Mr. Hawley introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish a refundable
tax credit for parents.
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 ``Parent Tax Credit Act''.
SEC. 2. ESTABLISHMENT OF PARENT TAX CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 36B the following new section:
``SEC. 36C. PARENT TAX CREDIT.
``(a) In General.--In the case of an eligible individual, there
shall be allowed as a credit against the tax imposed by this subtitle
for the taxable year an amount equal to $6,000 ($12,000 in the case of
a joint return).
``(b) Limitation Based on Earned Income.--
``(1) In general.--No credit shall be allowed under this
section to any taxpayer for any taxable year in which the
earned income (as defined in section 32(c)(2)) of such taxpayer
during such taxable year is not equal to or greater than the
minimum income level.
``(2) Minimum income level.--For purposes of this
subsection, the minimum income level shall be an amount equal
to the product of--
``(A) the minimum wage rate in effect under section
6(a)(1) of the Fair Labor Standards Act of 1938 (29
U.S.C. 206(a)(1)), multiplied by
``(B) 1040 hours.
``(c) Eligible Individual.--The term `eligible individual' means
any individual--
``(1) who, for the taxable year, has a qualifying child (as
defined in section 152(c)) who has not attained age 13 as of
the close of such taxable year, and
``(2) other than--
``(A) any nonresident alien individual,
``(B) any alien (as defined in section 101(a) of
the Immigration and Nationality Act (8 U.S.C. 1101(a))
who is unlawfully present in the United States (within
the meaning of that Act), and
``(C) any individual with respect to whom a
deduction under section 151 is allowable to another
taxpayer for a taxable year beginning in the calendar
year in which the individual's taxable year begins.
``(d) Identification Number Requirement.--
``(1) In general.--No credit shall be allowed under
subsection (a) to an eligible individual who does not include
on the return of tax for the taxable year--
``(A) such individual's valid identification
number,
``(B) in the case of a joint return, the valid
identification number of such individual's spouse, and
``(C) in the case of a qualifying child described
in subsection (c)(1), the valid identification number
of such qualifying child.
``(2) Valid identification number.--
``(A) In general.--For purposes of paragraph (1),
the term `valid identification number' means a social
security number (as such term is defined in section
24(h)(7)).
``(B) Adoption taxpayer identification number.--For
purposes of paragraph (1)(C), in the case of a
qualifying child who is adopted or placed for adoption,
the term `valid identification number' shall include
the adoption taxpayer identification number of such
child.
``(3) Special rule for members of the armed forces.--
Paragraph (1)(B) shall not apply in the case where at least 1
spouse was a member of the Armed Forces of the United States at
any time during the taxable year and at least 1 spouse
satisfies paragraph (1)(A).
``(4) Mathematical or clerical error authority.--Any
omission of a correct valid identification number required
under this subsection shall be treated as a mathematical or
clerical error for purposes of applying section 6213(g)(2) to
such omission.
``(e) 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.
``(f) Restrictions on Taxpayer Who Improperly Claimed Credit in
Prior Year.--Rules similar to the rules under section 24(g) shall apply
for purposes of this section.
``(g) Adjustment for Inflation.--
``(1) In general.--In the case of any taxable year
beginning after 2022, each dollar amount in subsection (a)
shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`2021'for `2016' in subparagraph (A)(ii) thereof.
``(2) Rounding.--If any increase under paragraph (1) is not
a multiple of $100, such increase shall be rounded to the next
lowest multiple of $100.''.
(b) Advance Payment of Credit.--
(1) In general.--Chapter 77 of the Internal Revenue Code of
1986, as amended by section 9611(b) of the American Rescue Plan
Act of 2021 (Public Law 117-2), is amended by inserting after
section 7527A the following new section:
``SEC. 7527B. ADVANCE PAYMENT OF PARENT 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 advance payments of the credit allowed under section 36C
(determined without regard to subsection (h) of such section), on a
monthly basis, to taxpayers (with the exception of any taxpayer who
elects not to receive such payments pursuant to subsection (c)(1)).
``(b) Limitation.--With respect to any taxable year, the Secretary
may make payments under subsection (a) only to the extent that--
``(1) the total amount of such payments made to any
taxpayer during such taxable year does not exceed the amount
estimated by the Secretary as would be allowable under section
36C for such taxable year, as estimated based on--
``(A) any information provided by the taxpayer
under subsection (c)(2), or
``(B) if no information described in subparagraph
(A) has been provided, any information with respect to
such taxpayer for the most recent taxable year for
which a return has been filed by the taxpayer, and
``(2) for each monthly payment, such payment does not
exceed an amount equal to the quotient of--
``(A) the amount of the credit estimated under
paragraph (1) for such taxable year, divided by
``(B) 12.
``(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, and
``(2) provide information to the Secretary which would be
relevant to the determination under subsection (b)(1),
including information regarding--
``(A) for purposes of section 36C(c)(1), whether
the taxpayer has any 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 earned
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) Administrative Provisions.--
``(1) Application of electronic funds payment
requirement.--The payments made by the Secretary under
subsection (a) shall be made by electronic funds transfer to
the same extent and in the same manner as if such payments were
Federal payments not made under this title.
``(2) Application of certain rules.--Rules similar to the
rules of subparagraphs (B) and (C) of section 6428A(f)(3) shall
apply for purposes of this section.''.
(2) Reconciliation of credit and advance credit.--Section
36C of such Code, as added by subsection (a), is amended by
adding at the end the following:
``(h) Reconciliation of Credit and Advance Credit.--
``(1) In general.--The amount of the credit allowed under
this section for any taxable year shall be reduced (but not
below zero) by the aggregate amount of any advance payments of
such credit under section 7527B for such taxable year.
``(2) Failure to satisfy earned income requirement.--In the
case of any taxpayer who received any advance payment under
section 7527B for the taxable year and whose earned income for
such taxable year was not equal to or greater than the minimum
income level (as determined under subsection (b)(2)), for the
period of 2 taxable years subsequent to such taxable year--
``(A) no advance payment may be provided under
section 7527B to such taxpayer in either taxable year
during such period, and
``(B) the amount of the credit which would (but for
this paragraph) otherwise be allowable to such taxpayer
under subsection (a) in either taxable year during such
period shall be reduced by one-half of such amount.''.
(c) Exception From Reduction or Offset.--Any credit allowed to any
individual under section 36C of the Internal Revenue Code of 1986 (as
added by subsection (a)) or any advance payment of such credit under
section 7527B of such Code (as added under subsection (b)) shall not
be--
(1) subject to reduction or offset pursuant to section 3716
or 3720A of title 31, United States Code,
(2) subject to reduction or offset pursuant to subsection
(d), (e), or (f) of section 6402 of the Internal Revenue Code
of 1986, or
(3) reduced or offset by other assessed Federal taxes that
would otherwise be subject to levy or collection.
(d) Conforming Amendments.--
(1) Section 6211(b)(4)(A) of the Internal Revenue Code of
1986 is amended--
(A) by inserting ``36C,'' after ``36B,'', and
(B) by striking ``and 7527A'' and inserting
``7527A, and 7527B''.
(2) Section 6213(g)(2)(L) of such Code is amended by
inserting ``36C,'' after ``32,''.
(3) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended--
(A) by inserting ``36C,'' after ``36B,'', and
(B) by striking ``or 7527A'' and inserting ``7527A,
or 7527B''.
(4) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 36B
the following new item:
``Sec. 36C. Parent Tax Credit.''.
(5) The table of sections for chapter 77 of such Code is
amended by inserting after the item relating to section 7527A
the following new item:
``Sec. 7527B. Advance payment of Parent Tax Credit.''.
(e) Termination of Child and Dependent Care Credit.--Section 21 of
the Internal Revenue Code of 1986 is amended by adding at the end the
following:
``(i) Termination.--This section shall not apply to any taxable
year beginning after December 31, 2021.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2021.
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