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Us Congress House Bill HB1827

Us Congress 2025-2026 Regular Session

Us Congress House Bill HB1827 Compare Versions

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11 I
22 119THCONGRESS
33 1
44 STSESSION H. R. 1827
55 To amend the Internal Revenue Code of 1986 to expand the employer-
66 provided child care credit and the dependent care assistance exclusion.
77 IN THE HOUSE OF REPRESENTATIVES
88 MARCH4, 2025
99 Mr. C
1010 ARBAJAL(for himself, Mr. LAWLER, Ms. DAVIDSof Kansas, and Mr.
1111 C
1212 ISCOMANI) introduced the following bill; which was referred to the Com-
1313 mittee on Ways and Means
1414 A BILL
1515 To amend the Internal Revenue Code of 1986 to expand
1616 the employer-provided child care credit and the depend-
1717 ent care assistance exclusion.
1818 Be it enacted by the Senate and House of Representa-1
1919 tives of the United States of America in Congress assembled, 2
2020 SECTION 1. SHORT TITLE. 3
2121 This Act may be cited as the ‘‘Child Care Availability 4
2222 and Affordability Act’’. 5
2323 SEC. 2. EXPANSION OF EMPLOYER-PROVIDED CHILD CARE 6
2424 CREDIT. 7
2525 (a) I
2626 NCREASE OF AMOUNT OF QUALIFIEDCHILD 8
2727 C
2828 AREEXPENDITURESTAKENINTOACCOUNT.—Section 9
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3131 •HR 1827 IH
3232 45F(a)(1) of the Internal Revenue Code of 1986 is amend-1
3333 ed by striking ‘‘25 percent’’ and inserting ‘‘50 percent’’. 2
3434 (b) I
3535 NCREASE OFMAXIMUMCREDITAMOUNT.—Sec-3
3636 tion 45F(b) of the Internal Revenue Code of 1986 is 4
3737 amended by striking ‘‘$150,000’’ and inserting 5
3838 ‘‘$500,000’’. 6
3939 (c) T
4040 REATMENT OFJOINTLYOWNED OROPERATED 7
4141 C
4242 HILDCAREFACILITY.—Section 45F(c)(1) of the Internal 8
4343 Revenue Code of 1986 is amended by adding at the end 9
4444 the following new subparagraph: 10
4545 ‘‘(C) J
4646 OINTLY OWNED OR OPERATED 11
4747 CHILDCARE FACILITY.—For purposes of sub-12
4848 paragraph (A)(i)(I), a facility shall not fail to 13
4949 be treated as a qualified childcare facility of the 14
5050 taxpayer merely because such facility is jointly 15
5151 owned or operated by the taxpayer and other 16
5252 persons.’’. 17
5353 (d) S
5454 PECIALRULE FORSMALLBUSINESSES.—Sec-18
5555 tion 45F(e) of the Internal Revenue Code of 1986 is 19
5656 amended by adding at the end the following new para-20
5757 graph: 21
5858 ‘‘(4) S
5959 MALL BUSINESSES.— 22
6060 ‘‘(A) I
6161 N GENERAL.—In the case of a tax-23
6262 payer described in subparagraph (B)— 24
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6565 •HR 1827 IH
6666 ‘‘(i) subsection (a)(1) shall be applied 1
6767 by substituting ‘60 percent’ for ‘50 per-2
6868 cent’, and 3
6969 ‘‘(ii) subsection (b) shall be applied by 4
7070 substituting ‘$600,000’ for ‘$500,000’. 5
7171 ‘‘(B) T
7272 AXPAYER DESCRIBED .—A taxpayer 6
7373 described in this subparagraph is a taxpayer 7
7474 that meets the gross receipts test of section 8
7575 448(c), determined— 9
7676 ‘‘(i) by substituting ‘5-taxable-year’ 10
7777 for ‘3-taxable-year’ in paragraph (1) there-11
7878 of, and 12
7979 ‘‘(ii) by substituting ‘5-year’ for ‘3- 13
8080 year’ each place such term appears in 14
8181 paragraph (3)(A) thereof.’’. 15
8282 (e) E
8383 FFECTIVEDATE.—The amendments made by 16
8484 this section shall apply to amounts paid or incurred after 17
8585 the date of the enactment of this section. 18
8686 SEC. 3. INCREASE IN AMOUNT EXCLUDABLE FOR DEPEND-19
8787 ENT CARE ASSISTANCE PROGRAMS. 20
8888 (a) I
8989 NGENERAL.—Section 129(a)(2)(A) of the Inter-21
9090 nal Revenue Code of 1986 is amended by striking ‘‘$5,000 22
9191 ($2,500’’ and inserting ‘‘$7,500 ($3,750’’. 23
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9494 •HR 1827 IH
9595 (b) EFFECTIVEDATE.—The amendment made by 1
9696 this section shall apply to amounts paid or incurred after 2
9797 the date of the enactment of this section. 3
9898 SEC. 4. HOUSEHOLD AND DEPENDENT CARE CREDIT IN-4
9999 CREASED AND MADE REFUNDABLE. 5
100100 (a) I
101101 NGENERAL.—Subpart C of part IV of sub-6
102102 chapter A of chapter 1 of the Internal Revenue Code of 7
103103 1986 is amending by inserting after section 36B the fol-8
104104 lowing new section: 9
105105 ‘‘SEC. 36C. EXPENSES FOR HOUSEHOLD AND DEPENDENT 10
106106 CARE SERVICES NECESSARY FOR GAINFUL 11
107107 EMPLOYMENT. 12
108108 ‘‘(a) A
109109 LLOWANCE OFCREDIT.— 13
110110 ‘‘(1) I
111111 N GENERAL.—In the case of an individual 14
112112 for which there are 1 or more qualifying individuals 15
113113 with respect to such individual, there shall be al-16
114114 lowed as a credit against the tax imposed by this 17
115115 chapter for the taxable year an amount equal to the 18
116116 applicable percentage of the employment-related ex-19
117117 penses paid by such individual during the taxable 20
118118 year. 21
119119 ‘‘(2) A
120120 PPLICABLE PERCENTAGE DEFINED .—For 22
121121 purposes of paragraph (1), the term ‘applicable per-23
122122 centage’ means 50 percent— 24
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125125 •HR 1827 IH
126126 ‘‘(A) reduced (but not below 35 percent) 1
127127 by 1 percentage point for each $2,000 (or frac-2
128128 tion thereof) by which the taxpayer’s adjusted 3
129129 gross income for the taxable year exceeds 4
130130 $15,000, and 5
131131 ‘‘(B) further reduced (but not below zero) 6
132132 by 1 percentage point for each $2,000 (or frac-7
133133 tion thereof) by which the taxpayer’s adjusted 8
134134 gross income for the taxable year exceeds 9
135135 $150,000. 10
136136 ‘‘(b) D
137137 EFINITIONS OFQUALIFYINGINDIVIDUAL AND 11
138138 E
139139 MPLOYMENT-RELATEDEXPENSES.—For purposes of 12
140140 this section— 13
141141 ‘‘(1) Q
142142 UALIFYING INDIVIDUAL .—The term 14
143143 ‘qualifying individual’ means— 15
144144 ‘‘(A) a dependent of the taxpayer (as de-16
145145 fined in section 152(a)(1)) who has not attained 17
146146 age 13, 18
147147 ‘‘(B) a dependent of the taxpayer (as de-19
148148 fined in section 152, determined without regard 20
149149 to subsections (b)(1), (b)(2), and (d)(1)(B)) 21
150150 who is physically or mentally incapable of car-22
151151 ing for himself or herself and who has the same 23
152152 principal place of abode as the taxpayer for 24
153153 more than one-half of such taxable year, or 25
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156156 •HR 1827 IH
157157 ‘‘(C) the spouse of the taxpayer, if the 1
158158 spouse is physically or mentally incapable of 2
159159 caring for himself or herself and who has the 3
160160 same principal place of abode as the taxpayer 4
161161 for more than one-half of such taxable year. 5
162162 ‘‘(2) E
163163 MPLOYMENT-RELATED EXPENSES .— 6
164164 ‘‘(A) I
165165 N GENERAL.—The term ‘employ-7
166166 ment-related expenses’ means amounts paid for 8
167167 the following expenses, but only if such ex-9
168168 penses are incurred to enable the taxpayer to be 10
169169 gainfully employed for any period for which 11
170170 there are 1 or more qualifying individuals with 12
171171 respect to the taxpayer: 13
172172 ‘‘(i) Expenses for household services. 14
173173 ‘‘(ii) Expenses for the care of a quali-15
174174 fying individual. 16
175175 Such term shall not include any amount paid 17
176176 for services outside the taxpayer’s household at 18
177177 a camp where the qualifying individual stays 19
178178 overnight. 20
179179 ‘‘(B) E
180180 XCEPTION.—Employment-related 21
181181 expenses described in subparagraph (A) which 22
182182 are incurred for services outside the taxpayer’s 23
183183 household shall be taken into account only if in-24
184184 curred for the care of— 25
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187187 •HR 1827 IH
188188 ‘‘(i) a qualifying individual described 1
189189 in paragraph (1)(A), or 2
190190 ‘‘(ii) a qualifying individual (not de-3
191191 scribed in paragraph (1)(A)) who regularly 4
192192 spends at least 8 hours each day in the 5
193193 taxpayer’s household. 6
194194 ‘‘(C) D
195195 EPENDENT CARE CENTERS .—Em-7
196196 ployment-related expenses described in subpara-8
197197 graph (A) which are incurred for services pro-9
198198 vided outside the taxpayer’s household by a de-10
199199 pendent care center (as defined in subpara-11
200200 graph (D)) shall be taken into account only if— 12
201201 ‘‘(i) such center complies with all ap-13
202202 plicable laws and regulations of a State or 14
203203 unit of local government, and 15
204204 ‘‘(ii) the requirements of subpara-16
205205 graph (B) are met. 17
206206 ‘‘(D) D
207207 EPENDENT CARE CENTER DE -18
208208 FINED.—For purposes of this paragraph, the 19
209209 term ‘dependent care center’ means any facility 20
210210 which— 21
211211 ‘‘(i) provides care for more than 6 in-22
212212 dividuals (other than individuals who re-23
213213 side at the facility), and 24
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216216 •HR 1827 IH
217217 ‘‘(ii) receives a fee, payment, or grant 1
218218 for providing services for any of the indi-2
219219 viduals (regardless of whether such facility 3
220220 is operated for profit). 4
221221 ‘‘(c) D
222222 OLLARLIMIT ONAMOUNTCREDITABLE.—The 5
223223 amount of the employment-related expenses incurred dur-6
224224 ing any taxable year which may be taken into account 7
225225 under subsection (a) shall not exceed— 8
226226 ‘‘(1) $5,000 if there is 1 qualifying individual 9
227227 with respect to the taxpayer for such taxable year, 10
228228 or 11
229229 ‘‘(2) $8,000 if there are 2 or more qualifying 12
230230 individuals with respect to the taxpayer for such tax-13
231231 able year. 14
232232 ‘‘(d) E
233233 ARNEDINCOMELIMITATION.— 15
234234 ‘‘(1) I
235235 N GENERAL.—Except as otherwise pro-16
236236 vided in this subsection, the amount of the employ-17
237237 ment-related expenses incurred during any taxable 18
238238 year which may be taken into account under sub-19
239239 section (a) shall not exceed— 20
240240 ‘‘(A) in the case of an individual who is 21
241241 not married at the close of such year, such indi-22
242242 vidual’s earned income for such year, or 23
243243 ‘‘(B) in the case of an individual who is 24
244244 married at the close of such year, the lesser of 25
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247247 •HR 1827 IH
248248 such individual’s earned income or the earned 1
249249 income of his spouse for such year. 2
250250 ‘‘(2) S
251251 PECIAL RULE FOR SPOUSE WHO IS A 3
252252 STUDENT OR INCAPABLE OF CARING FOR SELF .—In 4
253253 the case of a spouse who is a student or a qualifying 5
254254 individual described in subsection (b)(1)(C), for pur-6
255255 poses of paragraph (1), such spouse shall be deemed 7
256256 for each month during which such spouse is a full- 8
257257 time student at an educational institution, or is such 9
258258 a qualifying individual, to be gainfully employed and 10
259259 to have earned income of not less than— 11
260260 ‘‘(A) $250 if subsection (c)(1) applies for 12
261261 the taxable year, or 13
262262 ‘‘(B) $500 if subsection (c)(2) applies for 14
263263 the taxable year. 15
264264 ‘‘(e) S
265265 PECIALRULES.—For purposes of this sec-16
266266 tion— 17
267267 ‘‘(1) P
268268 LACE OF ABODE .—An individual shall 18
269269 not be treated as having the same principal place of 19
270270 abode of the taxpayer if at any time during the tax-20
271271 able year of the taxpayer the relationship between 21
272272 the individual and the taxpayer is in violation of 22
273273 local law. 23
274274 ‘‘(2) M
275275 ARRIED COUPLES MUST FILE JOINT RE -24
276276 TURN.—If the taxpayer is married at the close of 25
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279279 •HR 1827 IH
280280 the taxable year, the credit shall be allowed under 1
281281 subsection (a) only if the taxpayer and the tax-2
282282 payer’s spouse file a joint return for the taxable 3
283283 year. 4
284284 ‘‘(3) M
285285 ARITAL STATUS.—An individual legally 5
286286 separated from the individual’s spouse under a de-6
287287 cree of divorce or of separate maintenance shall not 7
288288 be considered as married. 8
289289 ‘‘(4) C
290290 ERTAIN MARRIED INDIVIDUALS LIVING 9
291291 APART.—If— 10
292292 ‘‘(A) an individual who is married and who 11
293293 files a separate return— 12
294294 ‘‘(i) maintains as the individual’s 13
295295 home a household which constitutes for 14
296296 more than
297297 1
298298 ⁄2of the taxable year the prin-15
299299 cipal place of abode of a qualifying indi-16
300300 vidual, and 17
301301 ‘‘(ii) furnishes over half of the cost of 18
302302 maintaining such household during the 19
303303 taxable year, and 20
304304 ‘‘(B) during the last 6 months of such tax-21
305305 able year such individual’s spouse is not a mem-22
306306 ber of such household, 23
307307 such individual shall not be considered as married. 24
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310310 •HR 1827 IH
311311 ‘‘(5) SPECIAL DEPENDENCY TEST IN CASE OF 1
312312 DIVORCED PARENTS, ETC.—If— 2
313313 ‘‘(A) section 152(e) applies to any child 3
314314 with respect to any calendar year, and 4
315315 ‘‘(B) such child is under the age of 13 or 5
316316 is physically or mentally incapable of caring for 6
317317 himself or herself, 7
318318 in the case of any taxable year beginning in such 8
319319 calendar year, such child shall be treated as a quali-9
320320 fying individual described in subparagraph (A) or 10
321321 (B) of subsection (b)(1) (whichever is appropriate) 11
322322 with respect to the custodial parent (as defined in 12
323323 section 152(e)(4)(A)), and shall not be treated as a 13
324324 qualifying individual with respect to the noncustodial 14
325325 parent. 15
326326 ‘‘(6) P
327327 AYMENTS TO RELATED INDIVIDUALS .— 16
328328 No credit shall be allowed under subsection (a) for 17
329329 any amount paid by the taxpayer to an individual— 18
330330 ‘‘(A) with respect to whom, for the taxable 19
331331 year, a deduction under section 151(c) (relating 20
332332 to deduction for personal exemptions for de-21
333333 pendents) is allowable either to the taxpayer or 22
334334 the taxpayer’s spouse, or 23
335335 ‘‘(B) who is a child of the taxpayer (within 24
336336 the meaning of section 152(f)(1)) who has not 25
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339339 •HR 1827 IH
340340 attained the age of 19 at the close of the tax-1
341341 able year. 2
342342 For purposes of this paragraph, the term ‘taxable 3
343343 year’ means the taxable year of the taxpayer in 4
344344 which the service is performed. 5
345345 ‘‘(7) S
346346 TUDENT.—The term ‘student’ means an 6
347347 individual who during each of 5 calendar months 7
348348 during the taxable year is a full-time student at an 8
349349 educational organization. 9
350350 ‘‘(8) E
351351 DUCATIONAL ORGANIZATION .—The term 10
352352 ‘educational organization’ means an educational or-11
353353 ganization described in section 170(b)(1)(A)(ii). 12
354354 ‘‘(9) I
355355 DENTIFYING INFORMATION REQUIRED 13
356356 WITH RESPECT TO SERVICE PROVIDER .—No credit 14
357357 shall be allowed under subsection (a) for any amount 15
358358 paid to any person unless— 16
359359 ‘‘(A) the name, address, and taxpayer 17
360360 identification number of such person are in-18
361361 cluded on the return claiming the credit, or 19
362362 ‘‘(B) if such person is an organization de-20
363363 scribed in section 501(c)(3) and exempt from 21
364364 tax under section 501(a), the name and address 22
365365 of such person are included on the return 23
366366 claiming the credit. 24
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369369 •HR 1827 IH
370370 In the case of a failure to provide the information 1
371371 required under the preceding sentence, the preceding 2
372372 sentence shall not apply if it is shown that the tax-3
373373 payer exercised due diligence in attempting to pro-4
374374 vide the information so required. 5
375375 ‘‘(10) I
376376 DENTIFYING INFORMATION REQUIRED 6
377377 WITH RESPECT TO QUALIFYING INDIVIDUALS .—No 7
378378 credit shall be allowed under this section with re-8
379379 spect to any qualifying individual unless the TIN of 9
380380 such individual is included on the return claiming 10
381381 the credit. 11
382382 ‘‘(f) R
383383 EGULATIONS.—The Secretary shall issue such 12
384384 regulations or other guidance as may be necessary or ap-13
385385 propriate to carry out the purposes of this section.’’. 14
386386 (b) C
387387 ONFORMINGAMENDMENTS.— 15
388388 (1) Section 1324(b) of title 31 is amended by 16
389389 inserting ‘‘36C,’’ after ‘‘36B,’’. 17
390390 (2) Section 21 of the Internal Revenue Code of 18
391391 1986 is repealed. 19
392392 (3) The table of sections for subpart A of part 20
393393 IV of subchapter A of chapter 1 of such Code is 21
394394 amended by striking the item relating to section 21. 22
395395 (4) Section 6211(b)(4)(A) of such Code is 23
396396 amended by striking ‘‘21 by reason of subsection (g) 24
397397 thereof,’’. 25
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400400 •HR 1827 IH
401401 (5) Section 6213(g)(2) of such Code is amend-1
402402 ed— 2
403403 (A) in subparagraph (H), by striking ‘‘sec-3
404404 tion 21’’ and inserting ‘‘section 36C’’, and 4
405405 (B) in subparagraph (L)— 5
406406 (i) by striking ‘‘21,’’, and 6
407407 (ii) by inserting ‘‘36C,’’ after ‘‘32,’’. 7
408408 (6) The following sections of such Code are 8
409409 each amended by striking ‘‘section 21(e)’’ and in-9
410410 serting ‘‘section 36C(e)’’. 10
411411 (A) Section 23(f)(1). 11
412412 (B) Section 35(g)(6). 12
413413 (C) Section 129(a)(2)(C). 13
414414 (7) Section 129 of such Code is further amend-14
415415 ed— 15
416416 (A) in subsection (b)(2), by striking ‘‘sec-16
417417 tion 21(d)(2)’’ and inserting ‘‘section 17
418418 36C(d)(2)’’, and 18
419419 (B) in subsection (e)(1), by striking ‘‘sec-19
420420 tion 21(b)(2)’’ and inserting ‘‘section 20
421421 36C(b)(2)’’. 21
422422 (8) Section 213(e) of such Code is amended by 22
423423 striking ‘‘section 21’’ and inserting ‘‘section 36C’’. 23
424424 (c) C
425425 LERICALAMENDMENT.—The table of sections 24
426426 for subpart C of part IV of subchapter A of chapter 1 25
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429429 •HR 1827 IH
430430 of such Code is amended by inserting after the item relat-1
431431 ing to section 36B the following new item: 2
432432 ‘‘Sec. 36C. Expenses for household and dependent care services necessary for
433433 gainful employment.’’.
434434 (d) EFFECTIVEDATE.—The amendments made by 3
435435 this section shall apply to taxable years beginning after 4
436436 the date of the enactment of this section. 5
437437 Æ
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