119-hr2438

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2438 Introduced in House

    (IH) ]

<DOC>

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) .
 <all>