[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5256 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
S. 5256
To amend the Internal Revenue Code of 1986 to enhance the child tax
credit, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 25, 2024
Mr. Romney 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 enhance the child tax
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. SHORT TITLE.
This Act may be cited as the ``Family Security Act''.
TITLE I--CHILD TAX CREDIT AND TAX CREDIT FOR PREGNANT MOTHERS
SEC. 101. PERMANENT EXPANSION OF CHILD TAX CREDIT.
(a) In General.--Section 24 of the Internal Revenue Code of 1986 is
amended--
(1) by striking subsections (a) through (e) and inserting
the following new subsections:
``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an
amount equal to the applicable percentage of the base credit
amount.
``(2) Base credit amount.--For purposes of paragraph (1),
the base credit amount shall be an amount equal to the sum of--
``(A) for each qualifying child who has not
attained age 6 as of the close of the calendar year in
which the taxable year of the taxpayer begins, $4,200,
and
``(B) for each qualifying child of the taxpayer who
is not described in subparagraph (A), $3,000.
``(b) Applicable Percentage and Limitation Based on Adjusted Gross
Income.--
``(1) Applicable percentage.--For purposes of subsection
(a), the applicable percentage shall be--
``(A) in the case of a taxpayer whose modified
adjusted gross income is equal to or greater than
$20,000, 100 percent, or
``(B) in the case of a taxpayer whose modified
adjusted gross income is less than $20,000, an amount
(expressed as a percentage) equal to the quotient of--
``(i) the modified adjusted gross income of
the taxpayer, divided by
``(ii) $20,000.
``(2) Limitation.--The amount of the credit allowable under
subsection (a) 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--
``(A) in the case of a joint return, $400,000, or
``(B) in any other case, $200,000.
``(3) Modified adjusted gross income.--For purposes of this
subsection, the term `modified adjusted gross income' means
adjusted gross income increased by any amount excluded from
gross income under section 911, 931, or 933.
``(4) Adjustment for inflation.--
``(A) In general.--In the case of a taxable year
beginning after 2026, each of the $20,000 amounts in
paragraph (1) shall be increased by an amount equal
to--
``(i) $20,000, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `2025' for `2016' in
subparagraph (A)(ii) thereof.
``(B) Rounding.--If any increase under this
paragraph is not a multiple of $100, such increase
shall be rounded to the next lowest multiple of $100.
``(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 age 18 as of the close of the calendar
year in which the taxable year of the taxpayer begins.
``(2) Exception for certain noncitizens.--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) Limitation on Number of Children.--The number of qualifying
children of a taxpayer for which a credit may be allowed under this
section for any taxable year shall not exceed 6.
``(e) Identification Requirements.--
``(1) In general.--No credit shall be allowed under this
section to a taxpayer who does not include on the return of tax
for the taxable year--
``(A) the social security number of the taxpayer
(and, in the case of a joint return, the social
security number of at least 1 spouse), and
``(B) with respect to any qualifying child, the
name and the social security number of such qualifying
child.
``(2) Social security number defined.--For purposes of this
subsection, the term `social security number' means, with
respect to a return of tax, a social security number issued to
an individual by the Social Security Administration, but only
if the social security number is issued--
``(A) to a citizen of the United States or pursuant
to subclause (I) (or that portion of subclause (III)
that relates to subclause (I)) of section
205(c)(2)(B)(i) of the Social Security Act, and
``(B) before the due date of filing such return.'',
(2) by striking subsections (h) through (j) and inserting
the following:
``(h) 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. Any failure to so reduce the credit shall be
treated as arising out of a mathematical or clerical error and
assessed according to section 6213(b)(1).
``(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. Any failure to so increase the tax shall be
treated as arising out of a mathematical or clerical error and
assessed according to section 6213(b)(1).'',
(3) in subsection (k)--
(A) by striking paragraph (2) and inserting the
following:
``(2) Puerto rico.--
``(A) Nonapplication of advance payments.--For
nonapplication of advance payment to residents of
Puerto Rico, see section 7527A(e)(4)(A).
``(B) Allowance of credit.--In the case of any bona
fide resident of Puerto Rico (within the meaning of
section 937(a)), the credit determined under this
section shall be allowable to such resident.'', and
(B) in paragraph (3)--
(i) in subparagraph (A), by striking ``and
without regard to the application of this
section to bona fide residents of Puerto Rico
under subsection (i)(1)'', and
(ii) in subparagraph (C), by striking
clause (ii) and inserting the following:
``(ii) Application of section in event of
absence of approved plan.--In the case of a
taxable year with respect to which a plan is
not approved under subparagraph (B), rules
similar to the rules of paragraph (2)(B) shall
apply with respect to bona fide residents of
American Samoa (within the meaning of section
937(a)).'', and
(4) by redesignating subsection (k) (as amended by
paragraph (3)) as subsection (i).
(b) Treatment as Fully Refundable.--
(1) Credit moved to subpart relating to refundable
credits.--
(A) In general.--The Internal Revenue Code of 1986
is amended--
(i) by redesignating section 24, as amended
by this section, as section 36C, and
(ii) by moving such section, as so
redesignated, from subpart A of part IV of
subchapter A of chapter 1 to the location
immediately after section 36B in subpart C of
part IV of subchapter A of chapter 1.
(B) Technical amendment.--Subsection (a) of section
36C of such Code, as moved and redesignated by
subparagraph (A), is amended by striking ``this
chapter'' and inserting ``this subtitle''.
(C) Clerical amendments.--
(i) The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such
Code is amended by striking the item relating
to section 24.
(ii) The table of sections for subpart C of
part IV of subchapter A of chapter 1 of such
Code is amended by adding at the end the
following new item:
``Sec. 36C. Child tax credit.''.
(2) Conforming amendments.--
(A) Section 26(b)(2)(Z) of such Code is amended by
striking ``24(j)(2)'' and inserting ``36C(h)(2)''.
(B) 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.''.
(C) Section 48D(d)(4) of such Code is amended by
striking ``section 24(k)'' and inserting ``section
36C(i)''.
(D) Section 152(f)(6)(B)(ii) of such Code is
amended by striking ``section 24'' and inserting
``section 36C''.
(E) 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))''.
(F) Section 3402(f)(1)(C) of such Code is amended
by striking ``section 24 (determined after application
of subsection (j) thereof)'' and inserting ``section
36C (determined after application of subsection (h)
thereof)''.
(G) Section 6103(l)(13)(A)(v) of such Code is
amended by striking ``section 24'' and inserting
``section 36C''.
(H) Section 6211(b)(4)(A) of such Code is amended--
(i) by striking ``24 by reason of
subsections (d) and (i)(1) thereof,'', and
(ii) by inserting ``36C,'' after ``36B,''.
(I) Section 6213(g)(2) of such Code is amended--
(i) in subparagraph (I), by striking
``correct TIN required under section 24(e)''
and inserting ``correct social security number
required under section 36C(e)'',
(ii) in subparagraph (L)--
(I) by striking ``24, or 32'' and
inserting ``32, or 36C'', and
(II) by striking ``TIN'' each place
it appears and inserting ``TIN or
social security number'', and
(iii) in subparagraph (P)--
(I) by striking ``24(g)(2)'' and
inserting ``36C(g)(2)'', and
(II) by striking ``section 24'' and
inserting ``section 36C''.
(J) Section 6402(m) of such Code is amended by
striking ``section 24 (by reason of subsection (d)
thereof) or 32'' and inserting ``section 32 or 36C''.
(K) Section 6417(f) of such Code is amended by
striking ``section 24(k)'' and inserting ``section
36C(i)''.
(L) Section 6695(g)(2) of such Code is amended by
striking ``24, 25A(a)(1), or 32'' and inserting
``25A(a)(1), 32, or 36C''.
(M) Paragraph (2) of section 1324(b) of title 31,
United States Code, is amended--
(i) by striking ``24,'', and
(ii) by inserting ``36C,'' after ``36B,''.
(N) Section 1613(a)(11)(A) of the Social Security
Act (42 U.S.C. 1382b(a)(11)(A)) is amended by striking
``section 24 of the Internal Revenue Code of 1986
(relating to child tax credit) by reason of subsection
(d) thereof'' and inserting ``section 36C of the
Internal Revenue Code of 1986 (relating to child tax
credit), and any payment made to such individual (or
such spouse) under section 7527A of such Code (relating
to advance payment of child tax credit)''.
(c) Coordination With Advance Payments of Credit.--Section 7527A of
the Internal Revenue Code of 1986 is amended--
(1) in subsection (a)--
(A) by inserting ``who have made an election under
subsection (c)(1)'' after ``making periodic payments to
taxpayers'', and
(B) by striking ``periodic payments'' each place it
appears and inserting ``monthly payments'',
(2) in subsection (b)--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph
(A), by striking ``50 percent of the amount
which would be treated as allowed under subpart
C of part IV of subchapter A of chapter 1 by
reason of section 24(i)(1)'' and inserting
``the amount allowed under section 36C'',
(ii) by striking subparagraph (A), and
(iii) by redesignating subparagraphs (B)
through (D) as subparagraphs (A) through (C),
respectively,
(B) in paragraph (3)--
(i) in subparagraph (A)(ii), by striking
``subpart C of part IV of subchapter A of
chapter 1 by reason of section 24(i)(1)'' and
inserting ``section 36C'', and
(ii) in subparagraph (B), by striking
``periodic payment'' each place it appears and
inserting ``monthly payment'',
(C) by striking paragraph (4), and
(D) by redesignating paragraph (5) as paragraph
(4),
(3) in subsection (c), by striking paragraph (1) and
inserting the following:
``(1) make an election to receive payments under this
section, and'',
(4) in subsection (e)(4)--
(A) by striking subparagraph (A) and inserting the
following:
``(A) Nonapplication for residents of puerto
rico.--If the taxpayer (in the case of a joint return,
either spouse) is a bona fide resident of Puerto Rico
(within the meaning of section 937(a)) for the taxable
year, the advance payment amount with respect to the
calendar year in which such taxable year begins shall
be reduced to zero.'',
(B) in subparagraph (B), by striking ``section
24(k)'' and inserting ``section 36C(i)'', and
(C) in subparagraph (C)--
(i) in clause (i)--
(I) by striking ``section
24(k)(1)(A)'' and inserting ``section
36C(i)(1)(A)'', and
(II) by striking ``in 2021'' and
inserting ``after 2020'', and
(ii) in clause (ii)--
(I) by striking ``section
24(k)(3)'' and inserting ``section
36C(i)(3)'', and
(II) by striking ``in 2021'' and
inserting ``after 2020'',
(5) in subsection (f), by striking ``with respect to'' and
all that follows and inserting ``with respect to any period
before July 1, 2021.'', and
(6) in subsection (g), by striking ``subsections (i)(1) and
(j) of section 24'' and inserting ``section 36C''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
SEC. 102. TAX CREDIT FOR PREGNANT MOTHERS.
(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 36C (as redesignated by section 101) the following new section:
``SEC. 36D. CREDIT FOR PREGNANT MOTHERS.
``(a) Allowance of Credit.--In the case of an eligible taxpayer
with a qualifying unborn child, there shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an amount
equal to the applicable percentage of $2,800.
``(b) Applicable Percentage.--
``(1) In general.--For purposes of subsection (a), the
applicable percentage shall be--
``(A) in the case of a taxpayer whose modified
adjusted gross income is equal to or greater than
$10,000, 100 percent, or
``(B) in the case of a taxpayer whose modified
adjusted gross income is less than $10,000, the amount
(expressed as a percentage) equal to the quotient of--
``(i) the modified adjusted gross income of
the taxpayer, divided by
``(ii) $10,000.
``(2) Limitation.--The amount of the credit allowable under
subsection (a) 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--
``(A) in the case of a joint return, $400,000, or
``(B) in any other case, $200,000.
``(3) Modified adjusted gross income.--For purposes of this
subsection, the term `modified adjusted gross income' has the
same meaning given such term in section 36C(b)(3).
``(4) Adjustment for inflation.--
``(A) In general.--In the case of a taxable year
beginning after 2026, each of the $10,000 amounts in
paragraph (1) shall be increased by an amount equal
to--
``(i) $10,000, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `2025' for `2016' in
subparagraph (A)(ii) thereof.
``(B) Rounding.--If any increase under this
paragraph is not a multiple of $100, such increase
shall be rounded to the next lowest multiple of $100.
``(c) Qualifying Unborn Child.--
``(1) In general.--For purposes of this section, the term
`qualifying unborn child' means an unborn child whose
gestational age is 20 weeks or greater, as certified by a
physician in accordance with paragraph (2).
``(2) Certification.--
``(A) In general.--Upon the request of the mother,
a physician may make a determination with respect to
the gestational age of the unborn child. Any
determination made under this paragraph shall be based
on the reasonable medical judgment of the physician
following such inquiries, examinations, and tests as a
reasonably prudent physician would deem necessary for
purposes of making such determination.
``(B) Form.--If the physician has made a
determination pursuant to subparagraph (A) that the
gestational age of the unborn child is 20 weeks or
greater, such physician may, upon the request of the
mother, provide the mother with a form which includes
the following:
``(i) The gestational age and the expected
due date of the unborn child.
``(ii) The name and social security number
of the mother.
``(iii) If applicable, the name and social
security number of the spouse of such mother.
``(iv) The name and contact information of
the physician.
``(v) A written certification from such
physician stating, under penalty of perjury
pursuant to section 1746 of title 28, that--
``(I) the mother was determined to
have been pregnant with the unborn
child, according to standard medical
practice, by such physician, and
``(II) such physician has
determined that, in their reasonable
medical judgment, the gestational age
of the unborn child is 20 weeks or
greater.
``(vi) A written certification from the
mother of the unborn child stating, under
penalty of perjury pursuant to section 1746 of
title 28, United States Code, that she--
``(I) is the biological mother of
such unborn child, or
``(II) initiated the pregnancy with
the intention of bearing and retaining
custody of and parental rights to such
child (or acted to such effect).
``(C) Prohibition.--Notwithstanding any other
provision of law, the certification described in this
paragraph shall not be used for any purpose other than
to determine the eligibility of the taxpayer for the
credit allowed under this section.
``(d) Application.--
``(1) In general.--In the case of the involuntary death of
an unborn child, or the death of an unborn child as a result of
any treatment intended to save the life of the mother or any
treatment of an ectopic pregnancy, occurring after 20 weeks
gestation, the death of such child shall have no effect with
respect to whether the credit is allowed under this section to
an eligible taxpayer, provided that such taxpayer otherwise
satisfies the applicable requirements under this section.
``(2) More than 1 unborn child during the same taxable
year.--In the case of an eligible taxpayer who--
``(A) has more than 1 pregnancy during a taxable
year, or
``(B) is determined to be pregnant with more than 1
qualifying unborn child,
the credit under this section shall be allowed with respect to
each qualifying unborn child.
``(3) Interaction with child tax credit.--The allowance of
a credit under this section with respect to a qualifying unborn
child shall have no effect in regards to the application of
section 36C with respect to such child after the date of their
birth.
``(e) Prohibition.--No credit shall be allowed under this section
if an unborn child died as a result of an induced abortion, but not
including any treatment intended to save the life of the mother or any
treatment of an ectopic pregnancy.
``(f) Reconciliation of Credit and Advanced Payments.--
``(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 7527B to such taxpayer during such
taxable year. Any failure to so reduce the credit shall be
treated as arising out of a mathematical or clerical error and
assessed according to section 6213(b)(1).
``(2) Excess advance payments.--If the aggregate amount of
payments under section 7527B 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. Any failure to so increase the tax shall be
treated as arising out of a mathematical or clerical error and
assessed according to section 6213(b)(1).
``(g) Definitions.--In this section--
``(1) Eligible taxpayer.--The term `eligible taxpayer'
means a taxpayer who--
``(A) with respect to an unborn child, is the
mother who--
``(i) carries or carried such child in the
womb, and
``(ii) is the biological mother of such
child or initiated the pregnancy with the
intention of bearing and retaining custody of
and parental rights to such child (or acted to
such effect), or
``(B) in the case of a joint return, is the spouse
of such mother,
but only if such taxpayer includes on the return of tax for the
taxable year the social security number of such taxpayer (of at
least 1 of such mother or spouse, in the case of a joint
return).
``(2) Gestational age.--The term `gestational age' means
the age of the unborn child, as calculated from the first day
of the mother's last menstrual period.
``(3) Physician.--The term `physician' means an individual
who is--
``(A) licensed to practice--
``(i) medicine and surgery,
``(ii) osteopathic medicine and surgery, or
``(iii) midwifery, or
``(B) otherwise legally authorized to--
``(i) perform births and to diagnose and
attend miscarriages or stillbirths, and
``(ii) perform examinations to determine
the gestational age of an unborn child,
by the State in which such practice is performed.
``(4) Reasonable medical judgment.--The term `reasonable
medical judgment' means a medical judgment that would be made
by a reasonably prudent physician who is knowledgeable about
the case and the treatment possibilities with respect to the
medical conditions involved.
``(5) Social security number.--The term `social security
number' has the meaning given such term by section
36C(e)(2).''.
(b) Advance Payments.--Chapter 77 of the Internal Revenue Code of
1986 is amended by inserting after section 7527A the following new
section:
``SEC. 7527B. ADVANCE PAYMENT OF CREDIT FOR PREGNANT MOTHERS.
``(a) In General.--The Secretary shall establish a program for
making payments to any qualified taxpayer which--
``(1) in the aggregate, equal the advance payment amount
determined with respect to such taxpayer, and
``(2) are scheduled to provide the amount described in
paragraph (1) through monthly payments--
``(A) beginning in the month in which an election
is made by the qualified taxpayer under subsection (c),
and
``(B) ending on the month in which the expected due
date of the unborn child occurs.
``(b) Advance Payment Amount.--
``(1) In general.--With respect to any qualified taxpayer,
the advance payment amount shall be equal to the amount (if
any) which is estimated by the Secretary as being equal to the
amount of the credit which would otherwise be allowed under
section 36D for the taxable year beginning in the calendar year
in which such estimate is being made, except that the
taxpayer's modified adjusted gross income for such taxable year
shall be deemed to be equal to the taxpayer's modified adjusted
gross income for the reference taxable year.
``(2) Reference taxable year.--For purposes of this
subsection, the term `reference taxable year' means, with
respect to any estimate made by the Secretary under paragraph
(1) with respect to a taxpayer during 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.
``(c) Election.--A taxpayer shall make an election to receive
payments under this section in such form and manner as the Secretary
may prescribe, with such election to include the form described in
subsection (d)(3).
``(d) Qualified Taxpayer.--For purposes of this section, the term
`qualified taxpayer' means any taxpayer--
``(1) with a qualifying unborn child (as defined in section
36D(c)(1)),
``(2) who is described in subparagraph (A) or (B) of
section 36D(g)(1) with respect to such child,
``(3) who has submitted the form described in section
36D(c)(2)(B) to the Secretary with respect to such child, and
``(4) who has made an election under subsection (c).
``(e) Payments After Birth.--Notwithstanding subsection (a)(2)(B),
payments made to any qualified taxpayer under this section shall be
made after the date of the birth of the child if needed to ensure that
the aggregate amount of such payments satisfy the requirement under
subsection (a)(1).
``(f) Regulations.--The Secretary shall issue such regulations or
other guidance as the Secretary determines necessary or appropriate to
carry out this subsection and, to the extent practicable, to align the
payment program established under this section with the payment program
established under section 7527A.''.
(c) Clerical Amendments.--
(1) Credit for pregnant mothers.--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 36C the following new item:
``Sec. 36D. Credit for pregnant mothers.''.
(2) Advance payment of credit for pregnant mothers.--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 credit for pregnant mothers.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
TITLE II--OTHER AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
SEC. 201. SIMPLIFICATION OF EARNED INCOME CREDIT FOR TAXPAYERS WITH
CHILDREN.
(a) Additional Limitation.--Paragraph (2) of section 32(a) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(2) Limitation.--The amount of the credit allowable to a
taxpayer under paragraph (1) for any taxable year shall not
exceed the lesser of--
``(A) the excess (if any) of--
``(i) the credit percentage of the earned
income amount, over
``(ii) the phaseout percentage of so much
of the adjusted gross income (or, if greater,
the earned income) of the taxpayer for the
taxable year as exceeds the phaseout amount, or
``(B) an amount equal to--
``(i) in the case of any taxpayer with no
qualifying children--
``(I) who is not filing a joint
return, $700, or
``(II) who is filing a joint
return, $1,400, or
``(ii) in the case of any taxpayer with 1
or more qualifying children--
``(I) who is not filing a joint
return, $4,300, or
``(II) who is filing a joint
return, $5,000.''.
(b) Credit Percentage and Phaseout Percentage.--The table contained
in paragraph (1) of section 32(b) of the Internal Revenue Code of 1986
is amended--
(1) by striking ``1 qualifying child'' in the first row and
inserting ``1 or more qualifying children'',
(2) by striking ``15.98'' in the first row and inserting
``25'',
(3) by striking the second and third rows, and
(4) by striking ``7.65'' in the third column of the last
row and inserting ``10''.
(c) Earned Income and Phaseout Amounts.--The table contained in
subparagraph (A) of section 32(b)(2) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``1 qualifying child'' in the first row and
inserting ``1 or more qualifying children'',
(2) by striking ``$6,330'' in the first row and inserting
``$12,647'',
(3) by striking ``$11,610'' in the first row and inserting
``$33,000'',
(4) by striking the second row,
(5) by striking ``$4,220'' in the last row and inserting
``$9,150'', and
(6) by striking ``$5,280'' in the last row and inserting
``$10,000''.
(d) Joint Returns.--Subparagraph (B) of section 32(b)(2) of the
Internal Revenue Code of 1986 is amended by striking ``$5,000'' and
inserting ``$10,000, and the earned income amount determined under
subparagraph (A) shall be increased--
``(i) by $2,059, in the case of a taxpayer
with 1 or more qualifying children, and
``(ii) by $9,151, in the case of a taxpayer
with no qualifying children.''.
(e) Inflation Adjustment.--Paragraph (1) of section 32(j) of the
Internal Revenue Code of 1986 is amended--
(1) by striking ``2015'' and inserting ``2026'',
(2) by striking clauses (i) and (ii) of subparagraph (B)
thereof and redesignating clause (iii) of such subparagraph as
clause (ii), and
(3) by inserting before clause (ii) of subparagraph (B)
thereof, as so redesignated, the following new clause:
``(i) in the case of amounts in subsection
(b)(2), `calendar year 2025' for `calendar year
2016', and''.
(f) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendments
made by this section shall apply to taxable years beginning
after December 31, 2025.
(2) Nonapplication to exempted children.--
(A) In general.--Subject to subparagraph (B), in
the case of any eligible individual (as defined in
section 32(c)(1) of the Internal Revenue Code of 1986)
who has any qualifying children for the taxable year
who are exempted children, section 32 of the Internal
Revenue Code of 1986 shall be applied with respect to
such eligible individual as if the amendments made by
subsections (a) through (e) of this section had not
been enacted.
(B) Separate application.--In the case of any
eligible individual (as so defined) who has--
(i) any qualifying children for the taxable
year who are not exempted children, and
(ii) any qualifying children for such
taxable year who are exempted children,
section 32 of the Internal Revenue Code of 1986 shall
be applied separately with respect to the children
described in clause (i) and (pursuant to the rules
described in subparagraph (A)) the children described
in clause (ii).
(C) Exempted child.--For purposes of this
paragraph, the term ``exempted child'' means an
individual who is described in subparagraph (A)(ii) or
(B) of section 152(c)(3).
SEC. 202. ELIMINATION OF ADDITIONAL EXEMPTION FOR DEPENDENTS.
(a) In General.--Paragraph (5) of section 151(d) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(5) Elimination of additional exemption for dependents
for taxable years after 2025.--In the case of a taxable year
beginning after December 31, 2025--
``(A) In general.--For purposes of subsection (c),
the term `exemption amount' means zero.
``(B) References.--For purposes of any other
provision of this title, the reduction of the exemption
amount to zero under subparagraph (A) shall not be
taken into account in determining whether a deduction
is allowed or allowable, or whether a taxpayer is
entitled to a deduction, under this section.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2025.
SEC. 203. ELIMINATION OF HEAD OF HOUSEHOLD FILING STATUS.
(a) In General.--Section 1 of the Internal Revenue Code of 1986 is
amended--
(1) by striking subsection (b),
(2) in subsection (c)--
(A) in the heading, by striking ``and Heads of
Households'', and
(B) by striking ``or the head of a household as
defined in section 2(b)'',
(3) in subsection (f), by striking ``(b),'' each place it
appears,
(4) in subsection (i)--
(A) in paragraph (1)--
(i) in subparagraph (A)(i), by striking
``(b),'',
(ii) in subparagraph (B)--
(I) in clause (i), by adding
``and'' at the end,
(II) by striking clause (ii), and
(III) by redesignating clause (iii)
as clause (ii), and
(iii) in subparagraph (C), by striking
``subparagraph (B)(iii)'' and inserting
``subparagraph (B)(ii)'',
(B) in paragraph (2), by striking ``(b),'', and
(C) in paragraph (3)--
(i) in subparagraph (A), by striking
``(b),'',
(ii) in subparagraph (B)--
(I) by striking clause (ii), and
(II) by redesignating clauses (iii)
and (iv) as clauses (ii) and (iii),
respectively, and
(iii) in subparagraph (C), by striking
``clauses (i), (ii), and (iii)'' and inserting
``clauses (i) and (ii)'', and
(5) in subsection (j)--
(A) in paragraph (2)--
(i) by striking subparagraph (B), and
(ii) in subparagraph (C), by striking ``and
Heads of Households'' in the heading,
(B) in paragraph (3)(B)(ii), by striking ``or head
of household'', and
(C) in paragraph (5)(B)--
(i) in clause (i)--
(I) by striking subclause (II), and
(II) by redesignating subclauses
(III) and (IV) as subclauses (II) and
(III), respectively, and
(ii) in clause (ii)--
(I) by striking subclause (II), and
(II) by redesignating subclauses
(III) and (IV) as subclauses (II) and
(III), respectively.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 25B(b) of the Internal Revenue
Code of 1986 is amended to read as follows:
``(2) Other returns.--In the case of any taxpayer not
described in paragraph (1), the applicable percentage shall be
determined under paragraph (1) except that such paragraph shall
be applied by substituting for each dollar amount therein (as
adjusted under paragraph (3)) a dollar amount equal to 50
percent of such dollar amount.''.
(2) Section 25E(b)(2) of such Code is amended--
(A) in subparagraph (A), by adding ``and'' at the
end, and
(B) by striking subparagraphs (B) and (C) and
inserting the following:
``(B) in the case of a taxpayer not described in
subparagraph (A), $75,000.''.
(3) Section 30D(f)(10)(B) of such Code is amended--
(A) in clause (i), by adding ``and'' at the end,
and
(B) by striking clauses (ii) and (iii) and
inserting the following:
``(ii) in the case of a taxpayer not
described in clause (i), $150,000.''.
(4) Section 36B(b)(3)(B)(ii)(I)(aa) of such Code is amended
by striking ``and heads of households''.
(5) Section 63(c) of such Code is amended--
(A) in paragraph (2)--
(i) in subparagraph (A)(ii), by adding
``or'' at the end,
(ii) by striking subparagraph (B), and
(iii) by redesignating subparagraph (C) as
subparagraph (B),
(B) in paragraph (4), by striking ``, (2)(C),''
each place it appears, and
(C) in paragraph (7)--
(i) by striking subparagraph (A) and
inserting the following:
``(A) Increase in standard deduction.--Paragraph
(2)(B) shall be applied by substituting `$12,000' for
`$3,000'.'', and
(ii) in subparagraph (B)--
(I) in clause (i), by striking
``paragraphs (2)(B) and (2)(C)'' and
inserting ``paragraph (2)(B)'', and
(II) in clause (ii), by striking
``$18,000 and $12,000 amounts'' and
inserting ``$12,000 amount''.
(6) Section 68(b) of such Code is amended--
(A) in paragraph (1)--
(i) by striking subparagraph (B),
(ii) in subparagraph (C), by striking ``or
head of household'', and
(iii) by redesignating subparagraphs (C)
and (D) as subparagraphs (B) and (C),
respectively, and
(B) in paragraph (2), by striking ``subparagraphs
(A), (B), and (C)'' and inserting ``subparagraphs (A)
and (B)''.
(7) Section 904(b)(3)(E)(i)(I) of such Code is amended by
striking ``(b),''.
(8) Section 6012(a)(1) of such Code is amended--
(A) in subparagraph (A)--
(i) in clause (i), by striking ``is not a
head of a household (as defined in section
2(b)),'',
(ii) by striking clause (ii),
(iii) by redesignating clauses (iii) and
(iv) as clauses (ii) and (iii), respectively,
and
(iv) in the flush text at the end, by
striking ``Clause (iv)'' and inserting ``Clause
(iii)'', and
(B) in subparagraph (B)--
(i) by striking ``clause (i), (ii), or
(iii)'' and inserting ``clause (i) or (ii)'',
and
(ii) by striking ``clause (iv)'' and
inserting ``clause (iii)''.
(9) Subparagraph (B) of section 6433(b)(3) of such Code is
amended to read as follows:
``(B) Other returns.--In the case of any taxpayer
who is not filing a joint return and who is not a
surviving spouse (as defined in section 2(a)), the
applicable dollar amount and the phaseout range shall
be \1/2\ of the amounts applicable under subparagraph
(A) (as so adjusted).''.
(10) Subsection (g) of section 6695 of such Code is amended
to read as follows:
``(g) Failure To Be Diligent in Determining Eligibility for Certain
Tax Benefits.--Any person who is a tax return preparer with respect to
any return or claim for refund who fails to comply with due diligence
requirements imposed by the Secretary by regulations with respect to
determining eligibility for, or the amount of, the credit allowable by
section 24, 25A(a)(1), or 32, shall pay a penalty of $500 for each such
failure.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
SEC. 204. EXCLUSION OF CHILDREN FROM CREDIT FOR EXPENSES FOR HOUSEHOLD
AND DEPENDENT CARE SERVICES NECESSARY FOR GAINFUL
EMPLOYMENT.
(a) In General.--Section 21 of the Internal Revenue Code of 1986 is
amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) by striking subparagraph (A),
(ii) in subparagraph (B), by inserting
``who has attained age 18 and'' before ``who is
physically or mentally incapable'', and
(iii) by redesignating subparagraphs (B)
and (C) as subparagraphs (A) and (B),
respectively, and
(B) in paragraph (2), by striking subparagraph (B)
and inserting the following:
``(B) Exception.--Employment-related expenses
described in subparagraph (A) which are incurred for
services outside the taxpayer's household shall be
taken into account only if incurred for the care of a
qualifying individual who regularly spends at least 8
hours each day in the taxpayer's household.'',
(2) in subsection (d)(2), by striking ``subsection
(b)(1)(C)'' and inserting ``subsection (b)(1)(B)'', and
(3) in subsection (e)(5)--
(A) in subparagraph (B), by striking ``is under the
age of 13 or'' and inserting ``has attained age 18
and'', and
(B) in the flush text at the end, by striking
``subparagraph (A) or (B) of subsection (b)(1)
(whichever is appropriate)'' and inserting ``subsection
(b)(1)(A)''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
SEC. 205. LIMITATION ON DEDUCTION FOR STATE AND LOCAL TAXES OF
INDIVIDUALS.
(a) In General.--Paragraph (6) of section 164(b) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(6) Limitation on individual deductions for taxable years
after 2025.--
``(A) In general.--In the case of an individual and
a taxable year beginning after December 31, 2025--
``(i) foreign real property taxes shall not
be taken into account under subsection (a)(1),
and
``(ii) the aggregate amount of taxes taken
into account under paragraphs (1), (2), and (3)
of subsection (a) and paragraph (5) of this
subsection for any taxable year shall not
exceed $30,000 ($15,000 in the case of a
married individual filing a separate return).
``(B) Exceptions.--Subparagraph (A) shall not apply
to--
``(i) any foreign taxes described in
subsection (a)(3), or
``(ii) any taxes described in paragraph (1)
and (2) of subsection (a) which are paid or
accrued in carrying on a trade or business or
an activity described in section 212.
``(C) Special rule.--For purposes of subparagraph
(A)(ii), an amount paid in a taxable year beginning
before January 1, 2026, with respect to a State or
local income tax imposed for a taxable year beginning
after December 31, 2025, shall be treated as paid on
the last day of the taxable year for which such tax is
so imposed.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2025.
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