[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2438 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 2438
To amend the Internal Revenue Code of 1986 to create a refundable tax
credit for foster families, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 27, 2025
Mrs. Houchin (for herself and Ms. Johnson of Texas) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committee on Education and Workforce, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to create a refundable tax
credit for foster families, 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 ``Foster Care Tax Credit Act''.
SEC. 2. FOSTER CARE TAX CREDIT.
(a) Allowance of Credit.--
(1) 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. FOSTER CARE TAX CREDIT.
``(a) Allowance of Credit.--In the case of an eligible taxpayer,
there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to $850.
``(b) Limitation.--
``(1) In general.--The amount of the credit allowable under
subsection (a) (determined without regard to this subsection)
shall be reduced (but not below zero) by the amount which bears
the same ratio to such credit (as so determined) as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted
gross income for such taxable year, over
``(ii) the threshold amount, bears to
``(B) $17,000.
``(2) Threshold amount.--For purposes of paragraph (1), the
term `threshold amount' means--
``(A) $250,000, in the case of a joint return,
``(B) $150,000, in the case of an individual who is
not married, and
``(C) $125,000, in the case of a married individual
filing a separate return.
For purposes of this paragraph, marital status shall be
determined under section 7703.
``(3) Modified adjusted gross income.--For purposes of this
subsection, the term `modified adjusted gross income' means the
adjusted gross income of the taxpayer for the taxable year
increased by any amount excluded from gross income under
section 911, 931, or 933.
``(c) Eligible Taxpayer.--For purposes of this section--
``(1) In general.--The term `eligible taxpayer' means, with
respect to any taxable year, any taxpayer--
``(A) with whom a qualifying foster child was
placed for a period of not less than 1 month during
such taxable year, and
``(B) for whom a credit under section 24 with
respect to such eligible foster child is not allowed
for such taxable year.
``(2) Qualifying foster child.--The term `qualifying foster
child' means an eligible foster child (within the meaning of
section 152(f)(1)(C))--
``(A) who has not attained age 17, and
``(B) who is a citizen, national, or resident of
the United States.
``(3) Calendar month.--For purposes of this paragraph
(1)(A), if a foster child resides in the home of the taxpayer
for more than 15 consecutive days of a calendar month but fewer
than the total number of days in such calendar month, such
foster child shall be treated as residing in the home of the
taxpayer for the full calendar month.
``(d) 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.''.
(2) Conforming amendments.--
(A) Section 6211(b)(4) of the Internal Revenue Code
of 1986 is amended by inserting ``36C,'' after
``36B,''.
(B) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting ``25E,'' after ``25A,''.
(C) 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. Foster care tax credit.''.
(b) Information Returns Relating to Foster Child Placement.--
(1) In general.--Subpart A of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 is amended by
inserting after section 6039J the following new section:
``SEC. 6039K. INFORMATION REPORTING WITH RESPECT TO FOSTER CHILD
PLACEMENT.
``(a) In General.--Every authorized placement agency and court
which places a qualifying foster child with a person during a calendar
year shall, at such time as the Secretary shall prescribe, make a
return described in subsection (b).
``(b) Form and Manner of Return.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains, with respect to each qualifying foster
child placed during the calendar year--
``(A) the name, address, and TIN of each individual
with whom such qualifying foster child was placed,
``(B) the name of the qualifying foster child, and
``(C) the dates during which such placement
occurred.
``(c) Statements To Be Furnished to Foster Parents.--
``(1) In general.--Every person required to make a return
under subsection (a) shall furnish to each individual whose
name is required to be set forth under subsection (b)(2)(A) a
written statement showing--
``(A) the name and address of the person required
to make such return and the phone number of the
information contact for such person, and
``(B) the information required to be shown on the
return with respect to such individual.
``(2) Time for furnishing statements.--The written
statement required under paragraph (1) shall be furnished on or
before January 31 of the year following the calendar year for
which the return under subsection (a) was required to be made.
``(d) Qualifying Foster Child.--For purposes of this section, the
term `qualifying foster child' has the meaning given such term under
section 36C(c)(2).''.
(2) Assessable penalties.--
(A) Section 6724(d)(1)(B) of such Code is amended
by striking ``or'' at the end of clause (xxv), by
striking ``and'' at the end of clause (xxvi) and
inserting ``or'', and by inserting after clause (xxvi)
the following new clause:
``(xxvii) section 6039K (relating to
information returns with respect to foster
child placement),''.
(B) Section 6724(d)(2) of such Code is amended by
redesignating the second subparagraph (JJ) as
subparagraph (KK), by striking ``or'' at the end of
subparagraph (II), by striking the period at the end of
the first subparagraph (JJ), by striking the period at
the end of subparagraph (KK) (as so redesignated) and
inserting a comma, and by inserting after such
subparagraph (KK) the following new subparagraph:
``(LL) section 6039K(c) (relating to statements
with respect to foster child placement).''.
(3) Clerical amendment.--The table of sections of subpart A
of part III of subchapter A of chapter 61 of such Code is
amended by inserting after the item relating to section 6039J
the following new item:
``Sec. 6039K. Information reporting with respect to foster child
placement.''.
(c) Election Not To Take Child Tax Credit.--Section 24(h)(4) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new subparagraph:
``(D) Election not to take credit.--A taxpayer may
elect not to have this paragraph apply with respect to
any dependent of the taxpayer to whom a credit would
otherwise be allowed by reason of subparagraph (A). In
any case in which a taxpayer makes an election under
this subparagraph, the credit allowed under this
section shall be treated as not allowed with respect to
such dependent.''.
(d) Application of Tax Return Preparer Due Diligence Penalty.--
Section 6695(g) of the Internal Revenue Code of 1986 is amended by
striking ``or 32'' and inserting ``32, or 36C''.
(e) Effective Date.--The amendments made by this section shall
apply to calendar months beginning after December 31, 2024, in taxable
years beginning after such date.
(f) Education.--
(1) In general.--The Secretary of Health and Human Services
(or the Secretary's delegate), in coordination with the
Secretary of the Treasury or such Secretary's delegate, shall
identify provisions in the Internal Revenue Code of 1986 that
can be used by or can benefit foster families, and shall
increase outreach efforts to provide information and
educational materials regarding such provisions to State and
Indian tribal foster care agencies and to foster families.
(2) Authorization of appropriations.--There are authorized
to be appropriated such sums as necessary for the purposes of
carrying out paragraph (1).
SEC. 3. STUDY AND REPORT ON EMERGENCY AND SHORT-TERM FOSTER PLACEMENTS.
(a) Study.--The Secretary of Health and Human services, in
coordination with the Secretary of the Treasury (or the Secretary's
delegate), shall conduct a study on--
(1) the costs and financial burdens on foster families who
experience multiple emergency and short-term foster placements
annually; and
(2) challenges to verifying and documenting the placement
of children in emergency and short-term placement.
For purposes of this subsection, a short-term placement is a placement
that lasts less than 1 week.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Secretary of Health and Human Services shall submit to
Congress a report on the study conducted under subsection (a).
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