Section 1 Short title
This Act may be cited as the “Family and Community Inflation Relief Act of 2022”.
Family and Community Inflation Relief Act of 2022
A BILL
To amend the Internal Revenue Code of 1986 to adjust certain credits and deductions for inflation.
Sec. 2 Child tax credit
by striking “Taxable year must be full taxable year.—Except” and inserting “Special rules.—
“(1) Taxable year must be full taxable year—Except”
by adding at the end the following new paragraph:
“(2) Adjustment for inflation
“(A) In general—In the case of a taxable year beginning after 2021, the $1,000 amount in subsection (a) and each of the dollar amounts in subsection (b)(2) shall 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 “2020” for “2016” in subparagraph (A)(ii) thereof.
“(B) Rounding—If any increase under subparagraph (A)—
“(i) is not a multiple of $100, in the case of the amount in subsection (a), such increase shall be rounded to the next lowest multiple of $100, or
“(ii) is not a multiple of $1,000, in the case of the amounts in subsection (b)(2), such increase shall be rounded to the next lowest multiple of $1,000.”
Special rules for taxable years through 2025—
In general— Subsection (h) of section 24 of such Code is amended by adding at the end the following new paragraph:
“(8) Adjustment for inflation
“(A) In general—In the case of a taxable year beginning after 2021, the $2,000 amount in paragraph (2) and each of the dollar amounts in paragraph (3) shall 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 “2020” for “2016” in subparagraph (A)(ii) thereof.
“(B) Rounding—If any increase under subparagraph (A)—
“(i) is not a multiple of $100, in the case of the amount in paragraph (2), such increase shall be rounded to the next lowest multiple of $100, or
“(ii) is not a multiple of $1,000, in the case of the amounts in paragraph (3), such increase shall be rounded to the next lowest multiple of $1,000.”
Partial credit for certain other dependents— Paragraph (4) of section 24(h) of such Code is amended by adding at the end the following new subparagraph:
“(D) Adjustment for inflation—In the case of a taxable year beginning after 2021, the $500 amount in subparagraph (A) shall 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 “2020” for “2016” in subparagraph (A)(ii) thereof.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2021.
Sec. 3 Credit for household and dependent care services
In general— Subsection (e) of section 21 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(11) Adjustments for inflation
“(A) In general—In the case of a taxable year beginning after 2021, the $15,000 amount in subsection (a)(2) and the $3,000 and $6,000 amounts in subsection (c) 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 “2020” for “2016” in subparagraph (A)(ii) thereof.
“(B) Rounding—If any increase under subparagraph (A)—
“(i) is not a multiple of $100, in the case of the amounts in subsection (c), such increase shall be rounded to the next lowest multiple of $100, or
“(ii) is not a multiple of $1,000, in the case of the amount in subsection (a)(2), such increase shall be rounded to the next lowest multiple of $1,000.”
Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2021.
Sec. 4 American Opportunity and Lifetime Learning Credits
American Opportunity Tax Credit— Subsection (b) of section 25A of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(5) Adjustment for inflation—In the case of a taxable year beginning after 2021, the $2,000 and $4,000 amounts in paragraph (1) shall each 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 “2020” for “2016” in subparagraph (A)(ii) thereof.”
Lifetime Learning Credit— Subsection (c) of section 25A of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(3) Adjustment for inflation—In the case of a taxable year beginning after 2021, the $10,000 amount in paragraph (1) 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 “2020” for “2016” in subparagraph (A)(ii) thereof.”
Limitations based on modified adjusted gross income— Subsection (d) of section 25A of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(3) Adjustment for inflation—In the case of a taxable year beginning after 2021, each of the dollar amounts in paragraph (1) 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 “2020” for “2016” in subparagraph (A)(ii) thereof.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2021.
Sec. 5 Deduction for interest on education loans
In general— Subsection (f) of section 221 of the Internal Revenue Code of 1986 is amended to read as follows:
“(f) Adjustments for inflation
“(1) In general—In the case of a taxable year beginning after 2002, each of the dollar amounts in subsection (b) shall be increased by an amount equal to—
“(A) in the case of the $2,500 amount in subsection (b)(1) and the $15,000 and $30,000 amounts in subsection (b)(2)(B)(ii)—
“(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 “2020” for “2016” in subparagraph (A)(ii) thereof, and
“(B) in the case of the $50,000 and $100,000 amounts in subsection (b)(2)(B)(i)(II)—
“(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 “2001” for “2016” in subparagraph (A)(ii) thereof.
“(2) Rounding—If any increase under paragraph (1)—
“(A) is not a multiple of $100, in the case of the amount in subsection (b)(1), such increase shall be rounded to the next lowest multiple of $100, or
“(B) is not a multiple of $1,000, in the case of the amounts in subsection (b)(2)(B)(ii) and (b)(2)(B)(i)(II), such increase shall be rounded to the next lowest multiple of $1,000.”
Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2021.
Sec. 6 Determination of standard mileage rate for charitable contributions deduction
In General— Subsection (i) of section 170 of the Internal Revenue Code of 1986 is amended to read as follows:
“(i) Standard mileage rate for use of passenger automobile—For purposes of computing the deduction under this section for use of a passenger automobile, the standard mileage rate shall be the rate determined by the Secretary, which rate shall not be less than the standard mileage rate used for purposes of section 213.”
Effective Date— The amendment made by this section shall apply to miles traveled after the date of the enactment of this Act.
Sec. 7 Extension of limitation on deduction of State and local taxes
Paragraph (6) of section 164(b) of the Internal Revenue Code of 1986 is amended—
by striking “2025” in the heading and inserting “2026”, and
by striking “January 1, 2026” and inserting “January 1, 2027”.