Section 1 Short title
This Act may be cited as the “Child Care Access and Refundability Expansion Act” or as the “Child CARE Act”.
Child Care Access and Refundability Expansion Act
A BILL
To amend the Internal Revenue Code of 1986 to increase and improve the credit for dependent care expenses and to provide a credit for education of employees of child care centers.
Sec. 2 Credit for dependent care expenses
Credit made refundable—
In general— The Internal Revenue Code of 1986 is amended by redesignating section 21 as section 36C and by moving such section after section 36B.
Credit not allowed for services provided outside the United States— Section 36C(b)(2)(A) of such Code, as redesignated by this section, is amended by adding at the end the following: “Such term shall not include any amount paid for services provided outside the United States.”.
Conforming amendments—
Section 23(f)(1) of such Code is amended by striking “section 21(e)” and inserting “section 36C(e)”.
Section 35(g)(6) of such Code is amended by striking “section 21(e)” and inserting “section 36C(e)”.
Section 36C(a)(1) of such Code, as redesignated by this section, is amended by striking “this chapter” and inserting “this subtitle”.
Section 129(a)(2)(C) of such Code is amended by striking “section 21(e)” and inserting “section 36C(e)”.
Section 129(b)(2) of such Code is amended by striking “section 21(d)(2)” and inserting “section 36C(d)(2)”.
Section 129(e)(1) of such Code is amended by striking “section 21(b)(2)” and inserting “section 36C(b)(2)”.
Section 213(e) of such Code is amended by striking “section 21” and inserting “section 36C”.
Section 6211(b)(4)(A) of such Code is amended by inserting “36C,” after “36B,”.
Section 6213(g)(2)(H) of such Code is amended by striking “section 21” and inserting “section 36C”.
Section 6213(g)(2)(L) of such Code is amended by striking “section 21, 24, 32, or 6428 ” and inserting “section 24, 32, 36C, or 6428”.
Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting “36C,” after “36B,”.
The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 21.
The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 36B the following new item:
Increase in dollar limitation— Section 36C(c) of such Code, as redesignated by this section, is amended—
by striking “$3,000” in paragraph (1) and inserting “$8,000”, and
by striking “$6,000” in paragraph (2) and inserting “twice the dollar amount in effect under paragraph (1)”.
Credit allowed for 50 percent of qualified expenses— Section 36C(a)(2) of such Code, as redesignated by this section, is amended by striking “35 percent ” and all that follows and inserting “50 percent.”.
Income limitation— Section 36C(a) of such Code, as redesignated by this section, is amended by adding at the end the following new paragraph:
“(3) Income limitation—No credit shall be allowed under paragraph (1) with respect to any taxpayer for any taxable year if the taxpayer’s adjusted gross income for such taxable year exceeds $200,000.”
Inflation adjustment of dollar and income limitations— Section 36C(e) of such Code, as redesignated by this section, is amended by adding at the end the following new paragraph:
“(11) Inflation adjustment
“(A) In general—In the case of any taxable year beginning in a calendar year after 2015, the $8,000 amount in subsection (c)(1) and the $200,000 amount in subsection (a)(3) shall each be increased by an amount equal to—
“(i) such dollar amount, 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 “calendar year 2014” for “calendar year 1992” in subparagraph (B) thereof.
“(B) Rounding—Any increase determined under subparagraph (A) shall be rounded to the nearest multiple of $100.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
Sec. 3 Credit for education of employees of child care centers
In general— Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“45S. Child care center education credit
“(a) In general—For the purposes of section 38, the child care center education credit determined under this section for the taxable year is an amount equal to 50 percent of so much of the child care educational expenses paid or incurred by the taxpayer with respect to the operation of a qualified child care center during the taxable year.
“(b) Limitation—The child care educational expenses taken into account under subsection (a) with respect to any eligible employee of the taxpayer for any taxable year shall not exceed $1,000.
“(c) Definitions—For purposes of this section—
“(1) Child care educational expenses
“(A) In general—The term “child care educational expenses” means, with respect to any eligible employee, expenses paid or incurred by the taxpayer to an eligible educational institution (as defined in section 25A(f)(2)) for classes related to early childhood education or development or child care certification.
“(B) Eligible employee—The term “eligible employee” means any employee of the taxpayer whose primary job function is providing care to children in a qualified child care center.
“(2) Qualified child care center—The term “qualified child care center” means any dependent care center (as defined in section 36C(b)(2)(D)) located in the United States which meets the requirements of section 36C(b)(2)(C)(i).
“(d) Denial of double benefit—No deduction shall be allowed under this chapter for the portion of the expenses otherwise allowable as a deduction that are taken into account in determining the credit under this section for the taxable year.”
Credit To be part of general business credit— Subsection (b) of section 38 of such Code is amended by striking “plus” at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting “, plus”, and by adding at the end the following new paragraph:
“(37) the child care center education credit determined under section 45S(a).”
Clerical amendment— The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
Effective date— The amendments made by this section shall apply to expenses paid or incurred after the date of the enactment of this Act, in taxable years ending after such date.