119-hr2763

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2763 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2763

 To amend the Internal Revenue Code of 1986 to establish a refundable 
 child tax credit with monthly advance payment.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 April 9, 2025

 Ms. DeLauro (for herself, Ms. DelBene, Mr. Torres of New York, Mr. 
McGovern, Ms. Norton, Ms. Chu, Ms. Schakowsky, Mr. Mrvan, Mrs. Ramirez, 
 Ms. Adams, Mr. Horsford, Mr. Foster, Mr. Thompson of Mississippi, Mr. 
 Fields, Ms. Lee of Pennsylvania, Mr. Amo, Mr. Davis of Illinois, Mr. 
 Casten, Mr. McGarvey, Ms. Scanlon, Ms. Moore of Wisconsin, Mrs. 
Foushee, Ms. Tlaib, Mr. Evans of Pennsylvania, Ms. Williams of Georgia, 
 Ms. Balint, Mr. Johnson of Georgia, Mrs. McBath, Ms. Garcia of Texas, 
 Mr. Raskin, Ms. Omar, Mr. Soto, Mr. Larson of Connecticut, Mr. Himes, 
Mr. Beyer, Ms. Sewell, Ms. Ross, Ms. Jacobs, Mr. Doggett, Ms. Wasserman 
 Schultz, Ms. Brown, Mr. Moulton, Ms. McClellan, Ms. Budzinski, Mr. 
 Swalwell, Ms. Pingree, Mrs. Dingell, Ms. Dexter, Mr. Boyle of 
 Pennsylvania, Mr. Carson, Ms. Escobar, Mr. Morelle, Ms. Sanchez, Mr. 
Connolly, Mr. Quigley, Mr. Courtney, Mr. Espaillat, Ms. Stansbury, Mr. 
Deluzio, Mr. Larsen of Washington, Mr. Casar, Mr. Pallone, Ms. Kelly of 
Illinois, Mr. Bishop, Mr. Pocan, Mr. Veasey, Ms. Salinas, Mr. Scott of 
 Virginia, Ms. Titus, Mr. Subramanyam, Mrs. Hayes, Ms. McBride, Ms. 
 Brownley, Mr. Stanton, Ms. McCollum, Mr. Case, Mrs. Torres of 
 California, Ms. Lofgren, Mr. Tonko, Ms. Ocasio-Cortez, Ms. Dean of 
 Pennsylvania, Mr. Landsman, Mr. Levin, Mr. Sherman, Ms. Houlahan, Mr. 
Costa, Mr. Ivey, Ms. Matsui, Mr. Frost, Ms. Tokuda, Mr. Kennedy of New 
 York, Ms. Castor of Florida, Ms. Pettersen, Mr. Garamendi, Mr. 
 Gottheimer, Mr. Jackson of Illinois, Ms. Randall, Ms. Lee of Nevada, 
 Ms. Hoyle of Oregon, Mr. Neguse, Ms. Wilson of Florida, Mr. Thanedar, 
 Mrs. Trahan, Mr. Schneider, Mrs. Beatty, Mr. Carter of Louisiana, Mr. 
 Olszewski, Mr. Goldman of New York, Mr. Carbajal, Mr. Peters, Mr. 
Vargas, Mrs. McClain Delaney, Ms. Lois Frankel of Florida, Mrs. Watson 
 Coleman, Mr. Mullin, Ms. Clark of Massachusetts, Mrs. Cherfilus-
 McCormick, Ms. Barragan, Ms. Velazquez, Mrs. McIver, Ms. Strickland, 
 Ms. Pressley, Ms. Meng, Ms. Clarke of New York, Mr. Auchincloss, Mr. 
Khanna, Mr. Garcia of California, Mr. Aguilar, Ms. Leger Fernandez, Mr. 
 Vindman, Ms. Waters, Mr. Takano, Mr. Latimer, Ms. Bonamici, Ms. 
 Jayapal, Ms. McDonald Rivet, Mr. David Scott of Georgia, Ms. Stevens, 
 Mr. Smith of Washington, Mr. Keating, Mr. Lieu, Ms. Morrison, Mr. 
Panetta, Mr. Lynch, Mr. DeSaulnier, Mr. Sorensen, Ms. Bynum, Ms. Simon, 
 Ms. Underwood, Mr. Tran, Ms. DeGette, Ms. Sherrill, Mr. Suozzi, Mr. 
 Cleaver, Mr. Menendez, Mr. Min, Ms. Ansari, Ms. Pou, Mr. Gomez, Ms. 
 Friedman, Mr. Bera, Mr. Garcia of Illinois, Mr. Nadler, Mr. Ruiz, Mr. 
Huffman, Mr. Castro of Texas, Mr. Figures, Ms. Elfreth, Mr. Mfume, Mr. 
Cisneros, Mr. Ryan, Mr. Vasquez, Ms. Schrier, Mr. Cohen, Ms. Scholten, 
Mr. Riley of New York, Ms. Craig, Ms. Johnson of Texas, Mr. Whitesides, 
 Mr. Moskowitz, Mr. Hoyer, Mr. Cuellar, Mr. Liccardo, Mr. Gray, Ms. 
Goodlander, Mr. Conaway, Mr. Correa, Mr. Magaziner, Mrs. Fletcher, Ms. 
 Pelosi, Mr. Bell, Ms. Crockett, Mrs. Sykes, Ms. Kaptur, Mr. Green of 
Texas, Ms. Plaskett, Mr. Mannion, Mr. Jeffries, Mr. Crow, Ms. Kamlager-
Dove, Mr. Clyburn, Mr. Krishnamoorthi, Mr. Norcross, Mr. Davis of North 
 Carolina, Mr. Vicente Gonzalez of Texas, Ms. Davids of Kansas, Ms. 
 Rivas, Mr. Meeks, Mr. Pappas, Mr. Harder of California, and Mr. 
 Hernandez) introduced the following bill; which was referred to the 
 Committee on Ways and Means

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to establish a refundable 
 child tax credit with monthly advance payment.

 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 ``American Family Act''.

SEC. 2. ESTABLISHMENT OF REFUNDABLE CHILD TAX CREDIT WITH MONTHLY 
 ADVANCE PAYMENT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 

section 24 the following new sections:

``

SEC. 24A. MONTHLY CHILD TAX CREDIT.

 ``

    (a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year the sum of 
the monthly specified child allowances determined with respect to the 
taxpayer under subsection

    (b) for each calendar month during such 
taxable year.
 ``

    (b) Monthly Specified Child Allowance.--
 ``

    (1) In general.--For purposes of this section, the term 
 `monthly specified child allowance' means, with respect to any 
 taxpayer for any calendar month, the sum of--
 ``
        (A) $300, with respect to each specified child of 
 such taxpayer who will (as of the close of such month) 
 have attained age 6, plus
 ``
        (B) 120 percent of the dollar amount in effect 
 for such month under subparagraph
        (A) , with respect to 
 each specified child of such taxpayer who will not (as 
 of the close of such month) have attained age 6.
 In the case of any specified child of such taxpayer who will 
 not (as of the close of such month) have attained the age of 1 
 month, subparagraph
        (B) shall be applied by substituting `800 
 percent' for `120 percent'.
 ``

    (2) Limitations based on modified adjusted gross 
 income.--
 ``
        (A) Initial reduction.--The monthly specified 
 child allowance otherwise determined under paragraph

    (1) with respect to any taxpayer for any calendar month 
 shall be reduced (but not below zero) by \1/12\ of 5 
 percent of the excess (if any) of the taxpayer's 
 modified adjusted gross income for the applicable 
 taxable year over the initial threshold amount in 
 effect for such applicable taxable year.
 ``
        (B) Limitation on initial reduction.--The amount 
 of the reduction under subparagraph
        (A) shall not 
 exceed the lesser of--
 ``
            (i) the excess (if any) of--
 ``
            (I) the monthly specified child 
 allowance with respect to the taxpayer 
 for such calendar month (determined 
 without regard to this paragraph), over
 ``
            (II) the amount which would be 
 determined under subclause
            (I) if the 
 dollar amounts in effect under 
 subparagraphs
        (A) and
        (B) of paragraph

    (1) were each equal to $166.67, or
 ``
            (ii) \1/12\ of 5 percent of the excess of 
 the secondary threshold amount over the initial 
 threshold amount.
 ``
            (C) Secondary reduction.--The monthly specified 
 child allowance otherwise determined under paragraph

    (1) with respect to any taxpayer for such calendar 
 month (determined after the application of 
 subparagraphs
        (A) and
        (B) ) shall be reduced (but not 
 below zero) by \1/12\ of 5 percent of the excess (if 
 any) of the taxpayer's modified adjusted gross income 
 for the applicable taxable year over the secondary 
 threshold amount.
 ``
            (D) Definitions related to limitations based on 
 modified adjusted gross income.--For purposes of this 
 paragraph--
 ``
            (i) Initial threshold amount.--The term 
 `initial threshold amount' means--
 ``
            (I) $150,000, in the case of a 
 joint return or surviving spouse (as 
 defined in 

section 2

    (a) ),
 ``
            (II) \1/2\ the dollar amount in 
 effect under subclause
            (I) , in the case 
 of a married individual filing a 
 separate return, and
 ``
            (III) $112,500, in any other 
 case.
 ``
            (ii) Secondary threshold amount.--The 
 term `secondary threshold amount' means--
 ``
            (I) $400,000, in the case of a 
 joint return or surviving spouse (as 
 defined in 

section 2

    (a) ),
 ``
            (II) $200,000, in the case of a 
 married individual filing a separate 
 return, and
 ``
            (III) $300,000, in any other 
 case.
 ``
            (iii) Applicable taxable year.--The term 
 `applicable taxable year' means, with respect 
 to any taxable year for which the credit under 
 this section is determined--
 ``
            (I) such taxable year, or
 ``
            (II) if the taxpayer elects the 
 application of this subclause (at such 
 time and in such form and manner as the 
 Secretary may provide), the preceding 
 taxable year or the second preceding 
 taxable year (as specified in such 
 election).
 ``
            (iv) Modified adjusted gross income.--The 
 term `modified adjusted gross income' means 
 adjusted gross income increased by any amount 
 excluded from gross income under 

section 911, 
 931, or 933.
 ``

    (3) Inflation adjustments.--
 ``
        (A) Monthly specified child allowance.--In the 
 case of any month beginning after December 31, 2025, 
 the $300 amount in paragraph

    (1)
        (A) shall be increased 
 by an amount equal to--
 ``
            (i) such dollar amount, multiplied by--
 ``
            (ii) the percentage (if any) by which--
 ``
            (I) the CPI (as defined in 
 

section 1

    (f)

    (4) ) for the calendar year 
 preceding the calendar year in which 
 such month begins, exceeds
 ``
            (II) the CPI (as so defined) for 
 calendar year 2024.
 ``
        (B) Initial threshold amount.--In the case of any 
 taxable year beginning after December 31, 2024, the 
 dollar amounts in subclauses
            (I) and
            (III) of paragraph

    (2)
            (D) 
            (i) shall each be increased by an amount equal 
 to--
 ``
            (i) such dollar amount, multiplied by
 ``
            (ii) the percentage (if any) which would 
 be determined under subparagraph
        (A)
            (ii) if 
 subclause
            (II) thereof were applied by 
 substituting `2022' for `2024'.
 ``
            (C) Rounding.--
 ``
            (i) Monthly specified child allowance.--
 Any increase under subparagraph
        (A) which is 
 not a multiple of $10 shall be rounded to the 
 nearest multiple of $10.
 ``
            (ii) Initial threshold amount.--Any 
 increase under subparagraph
        (B) which is not a 
 multiple of $5,000 shall be rounded to the 
 nearest multiple of $5,000.
 ``
            (c) Specified Child.--For purposes of this section--
 ``

    (1) In general.--The term `specified child' means, with 
 respect to any taxpayer for any calendar month, an individual--
 ``
        (A) who has the same principal place of abode as 
 the taxpayer for more than one-half of such month,
 ``
        (B) who is younger than the taxpayer and will 
 not, as of the close of such month, have attained age 
 18,
 ``
            (C) who receives care from the taxpayer during 
 such month that is not compensated,
 ``
            (D) who is not the spouse of the taxpayer at any 
 time during such month, and
 ``
        (E) who either--
 ``
            (i) is a citizen, national, or resident 
 of the United States, or
 ``
            (ii) if the taxpayer is a citizen or 
 national of the United States, such individual 
 is a legally adopted individual of such 
 taxpayer or is lawfully placed with such 
 taxpayer for legal adoption by such taxpayer.
 ``

    (2) Certain individuals ineligible.--In the case of an 
 individual who is a specified child with respect to another 
 taxpayer for any calendar month, such individual shall be 
 treated for such calendar month as having no specified 
 children.
 ``

    (3) Care from the taxpayer.--
 ``
        (A) In general.--Except as otherwise provided by 
 the Secretary, whether any individual receives care 
 from the taxpayer (within the meaning of paragraph

    (1)
            (C) ) shall be determined on the basis of facts and 
 circumstances with respect to the following factors:
 ``
            (i) The supervision provided by the 
 taxpayer regarding the daily activities and 
 needs of the individual.
 ``
            (ii) The maintenance by the taxpayer of a 
 secure environment at which the individual 
 resides.
 ``
            (iii) The provision or arrangement by the 
 taxpayer of, and transportation by the taxpayer 
 to, medical care at regular intervals and as 
 required for the individual.
 ``
            (iv) The involvement by the taxpayer in, 
 and financial and other support by the taxpayer 
 for, educational or similar activities of the 
 individual.
 ``
            (v) Any other factor that the Secretary 
 determines to be appropriate to determine 
 whether the individual receives care from the 
 taxpayer.
 ``
        (B) Determination of whether care is 
 compensated.--For purposes of determining if care is 
 compensated within the meaning of paragraph

    (1)
            (C) , 
 compensation from the Federal Government, a State or 
 local government, a Tribal government, or any 
 possession of the United States shall not be taken into 
 account.
 ``

    (4) Application of tie-breaker rules.--
 ``
        (A) In general.--Except as provided in 
 subparagraph
            (D) , if any individual would (but for this 
 paragraph) be a specified child of 2 or more taxpayers 
 for any month, such individual shall be treated as the 
 specified child only of the taxpayer who is--
 ``
            (i) the parent of the individual (or, if 
 such individual would (but for this paragraph) 
 be a specified child of 2 or more parents of 
 the individual for such month, the parent of 
 the individual determined under subparagraph
        (B) ),
 ``
            (ii) if the individual is not a specified 
 child of any parent of the individual 
 (determined without regard to this paragraph), 
 the specified relative of the individual with 
 the highest adjusted gross income for the 
 taxable year which includes such month, or
 ``
            (iii) if the individual is neither a 
 specified child of any parent of the individual 
 nor a specified child of any specified relative 
 of the individual (in both cases determined 
 without regard to this paragraph), the taxpayer 
 with the highest adjusted gross income for the 
 taxable year which includes such month.
 ``
        (B) Tie-breaker among parents.--If any individual 
 would (but for this paragraph) be the specified child 
 of 2 or more parents of the individual for any month, 
 such child shall be treated only as the specified child 
 of--
 ``
            (i) the parent with whom the child 
 resided for the longest period of time during 
 such month, or
 ``
            (ii) if the child resides with both 
 parents for the same amount of time during such 
 month, the parent with the highest adjusted 
 gross income for the taxable year which 
 includes such month.
 ``
            (C) Specified relative.--For purposes of this 
 paragraph, the term `specified relative' means an 
 individual who is--
 ``
            (i) an ancestor of a parent of the 
 specified child,
 ``
            (ii) a brother or sister of a parent of 
 the specified child, or
 ``
            (iii) a brother, sister, stepbrother, or 
 stepsister of the specified child.
 ``
            (D) Certain parents or specified relatives not 
 taken into account.--This paragraph shall be applied 
 without regard to any parent or specified relative of 
 an individual for any month if--
 ``
            (i) such parent or specified relative 
 elects to have such individual not be treated 
 as a specified child of such parent or 
 specified relative for such month,
 ``
            (ii) in the case of a parent of such 
 individual, the adjusted gross income of the 
 taxpayer (with respect to whom such individual 
 would be treated as a specified child after 
 application of this subparagraph) for the 
 taxable year which includes such month is 
 higher than the highest adjusted gross income 
 of any parent of the individual for any taxable 
 year which includes such month (determined 
 without regard to any parent with respect to 
 whom such individual is not a specified child, 
 determined without regard to subparagraphs
        (A) and
        (B) and after application of this 
 subparagraph), and
 ``
            (iii) in the case of a specified relative 
 of such individual, the adjusted gross income 
 of the taxpayer (with respect to whom such 
 individual would be treated as a specified 
 child after application of this subparagraph) 
 for the taxable year which includes such month 
 is higher than the highest adjusted gross 
 income of any parent and any specified relative 
 of the individual for any taxable year which 
 includes such month (determined without regard 
 to any parent and any specified relative with 
 respect to whom such individual is not a 
 specified child, determined without regard to 
 subparagraphs
        (A) and
        (B) and after application 
 of this subparagraph).
 ``
        (E) Treatment of joint returns.--For purposes of 
 this paragraph, with respect to any month, the adjusted 
 gross income of each person who files a joint return 
 for the taxable year which includes such month is the 
 total adjusted gross income shown on the joint return 
 for the taxable year.
 ``
        (F) Parent.--Except as otherwise provided by the 
 Secretary, the term `parent' shall have the same 
 meaning as when used in 

section 152
            (c) (4) .
 ``

    (5) Treatment of temporary absences.--Except as provided 
 in regulations or other guidance issued by the Secretary, for 
 purposes of this subsection--
 ``
        (A) In general.--In the case of any individual's 
 temporary absence from such individual's principal 
 place of abode, each day composing the temporary 
 absence shall--
 ``
            (i) be treated as a day at such 
 individual's principal place of abode,
 ``
            (ii) be treated as satisfying the care 
 requirement described in paragraph

    (1)
            (C) for 
 each day described in clause
            (i) , and
 ``
            (iii) not be treated as a day at any 
 other location.
 ``
        (B) Temporary absence.--For purposes of 
 subparagraph
        (A) , an absence shall be treated as 
 temporary if--
 ``
            (i) the individual would have resided at 
 the place of abode but for the absence, and
 ``
            (ii) under the facts and circumstances, 
 it is reasonable to assume that the individual 
 will return to reside at the place of abode.
 ``

    (6) Special rule for divorced parents, etc.--Rules 
 similar to the rules 

section 152

    (e) shall apply for purposes of 
 this subsection.
 ``

    (7) Eligibility determined on basis of presumptive 
 eligibility.--
 ``
        (A) In general.--If a period of presumptive 
 eligibility is established under 

section 7527A
            (c) with 
 respect to any taxpayer and child--
 ``
            (i) such child shall be treated as the 
 specified child of such taxpayer for any month 
 in such period of presumptive eligibility, and
 ``
            (ii) such child shall not be treated as 
 the specified child of any other taxpayer with 
 respect to whom a period of presumptive 
 eligibility has not been established for any 
 such month.
 ``
        (B) Ability of credit claimants to establish 
 presumptive eligibility.--Nothing in 

section 7527A
            (c) shall be interpreted to preclude a taxpayer from 
 establishing a period of presumptive eligibility 
 (including any period described in subparagraph
            (D) with respect to which payment could be made) with 
 respect to any specified child for purposes of this 
 section solely because such taxpayer affirmatively 
 elects not to receive monthly advance child payments 
 under 

section 7527A.
 ``
            (C) Exception for income-based tie-breaker 
 rules.--If a period of presumptive eligibility is 
 established under 

section 7527A
            (c) for any individual 
 with respect to any taxpayer and such individual is not 
 the specified child of such taxpayer for any month in 
 such period by reason of such taxpayer failing to be 
 described in clause
            (i) ,
            (ii) , or
            (iii) of paragraph

    (4)
        (A) for the taxable year which includes such month, 
 subparagraph
        (A) shall not apply with respect to such 
 month.
 ``
            (D) Treatment of certain retroactive payments.--
 If any payment is made under subparagraph
        (A) or
        (B) of 
 

section 7527A

    (f)

    (3) or paragraph

    (1) or

    (2) of 

section 7527A

    (g) , with respect to any taxpayer and child for 
 any period, such period shall be treated as a period of 
 presumptive eligibility established under 

section 7527A
            (c) with respect to such taxpayer and child for 
 purposes of applying subparagraph
        (A) .
 ``
        (E) Fraud and intentional disregard of rules or 
 regulations.--If the Secretary determines that the 
 taxpayer committed fraud or intentionally disregarded 
 rules or regulations in establishing or maintaining any 
 period of presumptive eligibility, the months with 
 respect to which such fraud or intentional disregard 
 relates shall not be treated as a period of presumptive 
 eligibility for purposes of subparagraph
        (A) .
 ``
            (d) Credit Refundable.--If the taxpayer (in the case of a joint 
return, either spouse) has a principal place of abode (determined as 
provided in 

section 32) in the United States or Puerto Rico for more 
than one-half of any calendar month during the taxable year, so much of 
the credit otherwise allowed under subsection

    (a) as is attributable to 
monthly specified child allowances with respect to any such calendar 
month shall be allowed under subpart C (and not allowed under this 
subpart).
 ``

    (e) Identification Requirements.--
 ``

    (1) Qualifying child identification requirement.--No 
 credit shall be allowed under this section to a taxpayer with 
 respect to any qualifying child unless the taxpayer includes 
 the name and taxpayer identification number of such qualifying 
 child on the return of tax for the taxable year and such 
 taxpayer identification number was issued on or before the due 
 date for filing such return.
 ``

    (2) Taxpayer identification requirement.--No credit shall 
 be allowed under this section if the taxpayer identification 
 number of the taxpayer was issued after the due date for filing 
 the return for the taxable year.
 ``

    (f) Restrictions on Taxpayers Who Improperly Claimed Credit or 
Improperly Received Monthly Advance Child Payment.--
 ``

    (1) Taxpayers making prior fraudulent or reckless 
 claims.--
 ``
        (A) In general.--No credit shall be allowed under 
 this section for any taxable year (and no payment shall 
 be made under 

section 7527A for any month) in the 
 disallowance period.
 ``
        (B) Disallowance period.--For purposes of 
 subparagraph
        (A) , the disallowance period is--
 ``
            (i) the period of 120 calendar months 
 after the most recent calendar month for which 
 there was a final determination that the 
 taxpayer's claim of credit under this section 
 or 

section 24 (or payment received under 
 

section 7527A) was due to fraud, and
 ``
            (ii) the period of 24 calendar months 
 after the most recent calendar month for which 
 there was a final determination that the 
 taxpayer's claim of credit under this section 
 or 

section 24 (or payment received under 
 

section 7527A) 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 or 
 

section 24 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 (and 
 no payment shall be made under 

section 7527A for any subsequent 
 month) unless the taxpayer provides such information as the 
 Secretary may require to demonstrate eligibility for such 
 credit.
 ``

    (3) Coordination with possessions of the united states.--
 For purposes of this subsection, a taxpayer's claim of credit 
 under this section or 

section 24 (or payment received under 
 

section 7527A) includes a claim of credit under this section or 
 

section 24 of the income tax law of any jurisdiction other than 
 the United States (or similar payment received under 

section 7527A of such income tax law), and a claim made or a payment 
 received from American Samoa pursuant to a plan described in 
 subsection

    (h)

    (3)
        (B) or 

section 24

    (k)

    (3)
        (B) .
 ``

    (g) Reconciliation of Credit and Monthly Advance Child 
Payments.--
 ``

    (1) In general.--The amount otherwise determined under 
 subsection

    (a) with respect to any taxpayer for any taxable 
 year shall be reduced (but not below zero) by the aggregate 
 amount of payments made under 

section 7527A to such taxpayer 
 for one or more calendar months in such taxable year. Any 
 failure to so reduce the credit shall be treated as arising out 
 of a mathematical or clerical error and assessed according to 
 

section 6213

    (b)

    (1) .
 ``

    (2) Increase in tax equal to excess advance payments in 
 certain circumstances.--If the aggregate amount of payments 
 made to the taxpayer under 

section 7527A for one or more 
 calendar months in such taxable year exceeds the amount allowed 
 as a credit under subpart C by reason of this section with 
 respect to such taxpayer for such taxable year (without regard 
 to paragraph

    (1) of this subsection), the tax imposed by this 
 chapter for such taxable year shall be increased by so much of 
 such excess as is attributable to one or more of the following:
 ``
        (A) Fraud, or reckless or intentional disregard 
 of rules and regulations, by the taxpayer.
 ``
        (B) Changes in the taxpayer's modified adjusted 
 gross income or filing status that affect the 
 application of the limitation imposed by subsection

    (b)

    (2) .
 ``
            (C) Payments under 

section 7527A which were made 
 for months which were not part of a period of 
 presumptive eligibility.
 ``
            (D) A failure to be the taxpayer described in 
 clause
            (i) ,
            (ii) , or
            (iii) of subsection
            (c) (4)
        (A) .
 ``
        (E) A failure to satisfy the requirements of 
 subsection
            (d) .
 ``
        (F) A failure to satisfy the requirements of 
 paragraphs

    (1) or

    (2) of subsection

    (e) , except that a 
 failure to satisfy the requirements of subsection

    (e)

    (1) shall not be taken into account under this 
 subparagraph if the taxpayer demonstrates to the 
 satisfaction of the Secretary that it is reasonable to 
 expect that the qualifying child will be issued a 
 taxpayer identification number and that the delay in 
 such issuance was due to reasonable cause and not 
 willful neglect.
 ``
        (G) Such other circumstances as the Secretary 
 identifies for purposes of this subparagraph to 
 facilitate the administration and enforcement by the 
 Secretary of 

section 7527A, to minimize the amount of 
 advance payments made under 

section 7527A to ineligible 
 individuals, and to prevent abuse.
 ``
        (H) Payments subject to treatment as excess 
 advance payments after notice under 

section 7527A

    (j)

    (2) .
 ``

    (3) Joint returns.--Except as otherwise provided by the 
 Secretary, in the case of an advance payment made under 

section 7527A with respect to a joint return, half of such payment 
 shall be treated as having been made to each individual filing 
 such return.
 ``

    (4) Coordination with possessions of the united states.--
 For purposes of this subsection, payments made under 

section 7527A include payments made by any jurisdiction other than the 
 United States under 

section 7527A of the income tax law of such 
 jurisdiction, and advance payments made by American Samoa 
 pursuant to a plan described in subsection

    (h)

    (3)
        (B) . Any 
 increase in tax imposed on a taxpayer by reason of paragraph

    (2) of the income tax law of a jurisdiction other than the 
 United States shall be considered to reduce the aggregate 
 amount of payments made to such taxpayer by such jurisdiction. 
 In carrying out this section, the Secretary shall coordinate 
 with each possession of the United States to prevent any 
 application of this paragraph that is inconsistent with the 
 purposes of this subsection.
 ``

    (h) Application of Credit in Possessions.--
 ``

    (1) Mirror code possessions.--
 ``
        (A) In general.--The Secretary shall pay to each 
 possession of the United States with a mirror code tax 
 system amounts equal to the loss (if any) to that 
 possession by reason of the application of this section 
 (determined without regard to this subsection) with 
 respect to taxable years beginning in calendar years 
 after 2024. Such amounts shall be determined by the 
 Secretary based on information provided by the 
 government of the respective possession.
 ``
        (B) Coordination with credit allowed against 
 united states income taxes.--No credit shall be allowed 
 under this section for any taxable year to any 
 individual to whom a credit is allowable against taxes 
 imposed by a possession of the United States with a 
 mirror code tax system by reason of the application of 
 this section in such possession for such taxable year.
 ``
            (C) Mirror code tax system.--For purposes of this 
 paragraph, the term `mirror code tax system' means, 
 with respect to any possession of the United States, 
 the income tax system of such possession if the income 
 tax liability of the residents of such possession under 
 such system is determined by reference to the income 
 tax laws of the United States as if such possession 
 were the United States.
 ``

    (2) Cross references related to application of credit to 
 residents of puerto rico.--
 ``
        (A) For application of refundable credit to 
 residents of Puerto Rico, see subsection
            (d) .
 ``
        (B) For application of advance payment to 
 residents of Puerto Rico, see 

section 7527A

    (b)

    (5) .
 ``

    (3) American samoa.--
 ``
        (A) In general.--The Secretary shall pay to 
 American Samoa amounts estimated by the Secretary as 
 being equal to the aggregate benefits that would have 
 been provided to residents of American Samoa by reason 
 of the application of this section for taxable years 
 beginning in calendar years after 2024 if the 
 provisions of this section had been in effect in 
 American Samoa (applied as if American Samoa were the 
 United States and without regard to the application of 
 this section to residents of Puerto Rico under 
 subsection
            (d) ).
 ``
        (B) Distribution requirement.--Subparagraph
        (A) shall not apply unless American Samoa has a plan, which 
 has been approved by the Secretary, under which 
 American Samoa will promptly distribute such payments 
 to its residents.
 ``
            (C) Coordination with credit allowed against 
 united states income taxes.--
 ``
            (i) In general.--In the case of a taxable 
 year with respect to which a plan is approved 
 under subparagraph
        (B) , this section (other 
 than this subsection) shall not apply to any 
 individual eligible for a distribution under 
 such plan.
 ``
            (ii) Application of section in event of 
 absence of approved plan.--In the case of a 
 taxable year with respect to which a plan is 
 not approved under subparagraph
        (B) , subsection
            (d) shall be applied by substituting `, Puerto 
 Rico, or American Samoa' for `or Puerto Rico'.
 ``

    (4) Treatment of payments.--For purposes of 

section 1324 
 of title 31, United States Code, the payments under this 
 subsection shall be treated in the same manner as a refund due 
 from a credit provision referred to in subsection

    (b)

    (2) of 
 such section.
 ``
            (i) Regulations.--The Secretary shall issue such regulations or 
other guidance as the Secretary determines necessary or appropriate to 
carry out the purposes of this section, including regulations or other 
guidance--
 ``

    (1) for determining whether an individual receives care 
 from a taxpayer for purposes of subsection
            (c) (1)
            (C) , and
 ``

    (2) to coordinate or modify the application of this 
 section, 

section 24, and 

section 7527A in the case of any 
 taxpayer--
 ``
        (A) whose taxable year is other than a calendar 
 year,
 ``
        (B) whose filing status for a taxable year is 
 different from the status used for determining one or 
 more monthly payments under 

section 7527A during such 
 taxable year, or
 ``
            (C) whose principal place of abode for any month 
 is different from the principal place of abode used for 
 determining the monthly payment under 

section 7527A for 
 such month.

``

SEC. 24B. CREDIT FOR CERTAIN OTHER DEPENDENTS.

 ``

    (a) In General.--There shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an amount equal to 
$500 with respect to each specified dependent of such taxpayer for such 
taxable year.
 ``

    (b) Limitation Based on Modified Adjusted Gross Income.--
 ``

    (1) In general.--The amount of the credit allowable under 
 subsection

    (a) shall be reduced (but not below zero) by $50 for 
 each $1,000 (or fraction thereof) by which the taxpayer's 
 modified adjusted gross income exceeds the threshold amount.
 ``

    (2) Threshold amount.--For purposes of this subsection, 
 the term `threshold amount' means--
 ``
        (A) $400,000, in the case of a joint return or 
 surviving spouse (as defined in 

section 2

    (a) ),
 ``
        (B) $200,000, in the case of a married individual 
 filing a separate return, and
 ``
            (C) $300,000, in any other case.
 ``

    (3) Modified adjusted gross income.--For purposes of this 
 subsection, the term `modified adjusted gross income' means 
 adjusted gross income increased by any amount excluded from 
 gross income under 

section 911, 931, or 933.
 ``
            (c) Specified Dependent.--For purposes of this section, the term 
`specified dependent' means, with respect to any taxpayer for any 
taxable year, any dependent of such taxpayer (as defined in 

section 152) for such taxable year unless such dependent--
 ``

    (1) is a specified child of the taxpayer, or any other 
 taxpayer, for any month during such taxable year, or
 ``

    (2) would not be a dependent if subparagraph
        (A) of 
 

section 152

    (b)

    (3) were applied without regard to all that 
 follows `resident of the United States'.
 ``
            (d) Special Rule for Taxable Year Child Attains Age 18.--If any 
dependent of the taxpayer attains age 18 during the taxable year--
 ``

    (1) whether such dependent is a specified dependent shall 
 be determined without regard to paragraph

    (1) of subsection
            (c) , and
 ``

    (2) with respect to such dependent, subsection

    (a) shall 
 be applied by substituting an amount for `$500' that bears the 
 same ratio to $500 as--
 ``
        (A) the excess of--
 ``
            (i) 12, over
 ``
            (ii) the number of months during such 
 taxable year with respect to which such 
 dependent is a specified child of the taxpayer 
 or any other taxpayer, bears to
 ``
        (B) 12.
 ``

    (e) Identification Requirements.--Rules similar to the rules of 

section 24A

    (e) shall apply for purposes of this section.
 ``

    (f) Taxable Year Must Be Full Taxable Year.--Except in the case 
of a taxable year closed by reason of the death of the taxpayer, no 
credit shall be allowable under this section in the case of a taxable 
year covering a period of less than 12 months.
 ``

    (g) Regulations.--The Secretary shall issue such regulations or 
other guidance as the Secretary determines necessary or appropriate to 
carry out the purposes of this section.''.

    (b) Monthly Payment of Child Tax Credit.--

Section 7527A of such 
Code is amended to read as follows:

``

SEC. 7527A. MONTHLY PAYMENTS OF CHILD TAX CREDIT.

 ``

    (a) In General.--The Secretary shall pay to each taxpayer, during 
each calendar month which is during a period of presumptive eligibility 
with respect to the taxpayer and any child, an amount equal to the 
monthly advance child payment determined with respect to such taxpayer 
for such month.
 ``

    (b) Monthly Advance Child Payment.--The term `monthly advance 
child payment' means, with respect to any taxpayer for any calendar 
month, the amount (if any) which is estimated by the Secretary as being 
equal to the monthly specified child allowance which would be 
determined under 

section 24A

    (b) with respect to such taxpayer for such 
calendar month if--
 ``

    (1) the only specified children of such taxpayer for such 
 calendar month are the specified children of such taxpayer for 
 the reference month (determined without regard to 

section 24A
            (c) (7) ),
 ``

    (2) the ages of such children (and the status of such 
 children as specified children) are determined for such 
 calendar month by taking into account the passage of time since 
 such reference month,
 ``

    (3) each child is only taken into account as a specified 
 child for such calendar month if such calendar month is during 
 a period of presumptive eligibility with respect to the 
 taxpayer and such child,
 ``

    (4) the limitations of 

section 24A

    (b)

    (2) were applied 
 with respect to the reference taxable year rather than with 
 respect to the applicable taxable year, and
 ``

    (5) no monthly specified child allowance were determined 
 with respect to such taxpayer for such calendar month unless 
 the taxpayer (in the case of a joint return, either spouse) has 
 a principal place of abode (determined as provided in 

section 32) in the United States or Puerto Rico for more than one-half 
 of the reference month.
 ``
            (c) Period of Presumptive Eligibility.--
 ``

    (1) In general.--For purposes of this section, the term 
 `period of presumptive eligibility' means, with respect to any 
 taxpayer and any child, the period--
 ``
        (A) beginning with the calendar month following 
 the calendar month during which the taxpayer provides 
 the Secretary with sufficient information for the 
 Secretary to--
 ``
            (i) determine that such child was a 
 specified child of the taxpayer for the 
 reference month (determined without regard to 
 

section 24A
            (c) (7) ), and
 ``
            (ii) estimate the monthly advance child 
 payment for such calendar month, and
 ``
        (B) ending with the earliest of--
 ``
            (i) the month beginning immediately after 
 the month on which the Secretary sends the 
 taxpayer a written notice that the taxpayer's 
 period of presumptive eligibility with respect 
 to such child is being terminated by reason of 
 information known to the Secretary (including a 
 failure to provide annual information under 
 paragraph

    (2) ) which casts doubt on such 
 taxpayer's status as being allowed the monthly 
 specified child allowance under 

section 24A for 
 such child (determined without regard to 
 

section 24A
            (c) (7) ) with respect to one or more 
 months following the reference month,
 ``
            (ii) any month with respect to which the 
 taxpayer notifies the Secretary that such 
 taxpayer is not allowed a monthly specified 
 child allowance for such month under 

section 24A

    (b) (determined without regard to 

section 24A
            (c) (7) ), and
 ``
            (iii) the month beginning immediately 
 before the first month of a new period of 
 presumptive eligibility with respect to such 
 taxpayer and such child which is established on 
 the basis of a reference month more recent than 
 the reference month with respect to which such 
 prior period was established (including on the 
 basis of an annual renewal described in 
 paragraph

    (2) ).
 ``

    (2) Annual renewal.--The Secretary shall terminate a 
 taxpayer's period of presumptive eligibility with respect to 
 any child under paragraph

    (1)
        (B)
            (i) unless such taxpayer 
 provides information sufficient to establish a new period of 
 presumptive eligibility with respect to such child (as 
 described in paragraph

    (1)
        (B)
            (ii) ) on an annual basis.
 ``

    (3) Automatic eligibility for birth of child.--The 
 Secretary shall issue regulations or other guidance to 
 establish procedures pursuant to which, to the maximum extent 
 administratively practicable--
 ``
        (A) a parent of a child born during a calendar 
 month shall be treated as automatically establishing a 
 period of presumptive eligibility with respect to such 
 child,
 ``
        (B) the month for which such period begins, and 
 the month by which the first annual renewal described 
 in paragraph

    (2) must be completed, are determined, and
 ``
            (C) if the first monthly advance child payment 
 with respect to such child is made after the calendar 
 month in which such child is born, such payment is 
 increased to properly take into account the months in 
 such period of presumptive eligibility which precede 
 the month in which such payment is made.
 ``

    (4) Presumptive eligibility based on certain government 
 programs.--The Secretary shall issue regulations or other 
 guidance to establish procedures under which--
 ``
        (A) based on information provided to the 
 Secretary by one or more government entities, a parent 
 or specified relative of a child is treated as 
 automatically establishing a period of presumptive 
 eligibility with respect to such child, and
 ``
        (B) the month for which such period begins, the 
 month by which the first annual renewal described in 
 paragraph

    (2) must be completed, and any additional 
 circumstances under which such period will terminate, 
 are determined.
 ``

    (5) Taxpayer responsibility to notify secretary.--In the 
 event that any taxpayer is not allowed a monthly specified 
 child allowance under 

section 24A

    (b) (determined without regard 
 to 

section 24A
            (c) (7) ) for any month in a period of presumptive 
 eligibility with respect to such taxpayer, such taxpayer shall 
 notify the Secretary under paragraph

    (1)
        (B)
            (ii) at such time 
 and in such manner as the Secretary may provide.
 ``

    (6) Transition rule.--With respect periods of presumptive 
 eligibility beginning during the first 6 months to which this 
 section applies, the Secretary shall issue regulations or other 
 guidance to establish procedures pursuant to which--
 ``
        (A) based on information known to the Secretary 
 including returns of tax for either of the last 2 
 taxable years ending before such month, a parent or 
 specified relative of a child is treated as 
 automatically establishing a period of presumptive 
 eligibility with respect to such child, and
 ``
        (B) the month for which such period begins, the 
 month by which the first annual renewal described in 
 paragraph

    (2) must be completed, and any additional 
 circumstances under which such period will terminate, 
 are determined.
 ``
            (d) Determination of Reference Month and Reference Taxable 
Year.--For purposes of this section--
 ``

    (1) Reference month.--The term `reference month' means, 
 with respect to any calendar month in a period of presumptive 
 eligibility with respect to a taxpayer, the most recent of--
 ``
        (A) in the case of a taxpayer who filed a return 
 of tax for the last taxable year ending before such 
 calendar month, the last month of such taxable year,
 ``
        (B) in the case of a taxpayer who filed a return 
 of tax for the taxable year preceding the taxable year 
 described in subparagraph
        (A) , the last month of such 
 preceding taxable year, and
 ``
            (C) in the case of a taxpayer who otherwise 
 provides the information referred to in subsection
            (c) (1)
        (A) , the month with respect to which such 
 information is provided.
 ``

    (2) Reference taxable year.--The term `reference taxable 
 year' means, with respect to any calendar month in a period of 
 presumptive eligibility with respect to a taxpayer--
 ``
        (A) if the reference month with respect to such 
 calendar month is determined under subparagraph
        (A) or
        (B) of paragraph

    (1) , the taxable year referred to in 
 such subparagraph, respectively, and
 ``
        (B) if the reference month with respect to such 
 calendar month is determined under subparagraph

    (1)
            (C) , 
 the last taxable year ending before such reference 
 month.
 ``

    (e) Methods of Providing Information To Establish a Period of 
Presumptive Eligibility.--
 ``

    (1) In general.--The Secretary shall ensure the 
 information described in subsection
            (c) (1)
        (A) may be provided 
 on the return of tax for the taxable year ending before the 
 calendar year which includes the month for which such period 
 would begin, through the on-line portal described in paragraph

    (2) , or in such other manner as the Secretary may provide.
 ``

    (2) On-line information portal.--The Secretary shall 
 establish an on-line portal (available in multiple languages) 
 which allows taxpayers to--
 ``
        (A) subject to such restrictions as the Secretary 
 may provide, elect to begin or cease receiving payments 
 under this section, and
 ``
        (B) provide the information described in 
 subsection
            (c) (1)
        (A) .
 ``

    (f) Resolution of Competing Claims of Presumptive Eligibility 
With Respect to Same Child.--
 ``

    (1) In general.--If there is a period of presumptive 
 eligibility with respect to any taxpayer and child (hereafter 
 referred to as the `original claim'), a period of presumptive 
 eligibility would (without regard to this subsection) be 
 established with respect another taxpayer and such child 
 (hereafter referred to as the `challenge claim'), and the 
 period of such challenge claim would overlap with the period of 
 such original claim--
 ``
        (A) such challenge claim shall not be taken into 
 account under this section unless the reference month 
 with respect to which the challenge claim would be 
 established is at least as recent as the reference 
 month with respect to which the original claim is 
 established,
 ``
        (B) such challenge claim shall not begin before 
 the original claim is terminated, and
 ``
            (C) the Secretary shall establish procedures 
 under which the Secretary expeditiously adjudicates 
 such claims on the basis of the most recent feasible 
 reference month.
 ``

    (2) Provisions related to adjudication.--
 ``
        (A) Challenge claim must relate to at least 3 
 months prospectively.--The procedures established under 
 paragraph

    (1)
            (C) shall require that the taxpayer 
 establishing the challenge claim express a reasonable 
 expectation and intent that such taxpayer would be 
 allowed a monthly specified child allowance under 
 

section 24A

    (b) (determined without regard to 

section 24A
            (c) (7) ) for at least the first 2 months following 
 the reference month referred to in paragraph

    (1)
            (C) .
 ``
        (B) Expedited process; appeals.--The procedures 
 established under paragraph

    (1)
            (C) shall include--
 ``
            (i) an expedited process for taxpayers 
 who meet such requirements as the Secretary may 
 establish for such expedited process, and
 ``
            (ii) procedures for adjudicating an 
 appeal of an adverse decision.
 ``
            (C) Information receipt and coordination.--For 
 purposes of obtaining information relevant to any 
 adjudication under this paragraph, the Secretary may 
 enter into agreements to receive information from, and 
 otherwise coordinate with--
 ``
            (i) Federal agencies (including the 
 Social Security Administration and the 
 Department of Agriculture),
 ``
            (ii) any State, local government, Tribal 
 government, or possession of the United States, 
 and
 ``
            (iii) any other individual or entity that 
 the Secretary determines to be appropriate for 
 such purposes.
 ``
            (D) Adjudication not treated as assessment.--Any 
 adjudication under this paragraph shall not be treated 
 as an assessment described in 

section 6201.
 ``
        (E) Adjudication not treated as inspection of 
 taxpayer's books of account.--The inspection of a 
 taxpayer's books of account in connection with any 
 adjudication under this paragraph shall not be treated 
 as an examination or inspection of a taxpayer's books 
 of account for purposes of 

section 7605

    (b) .
 ``

    (3) Retroactive payments related to adjudication.--
 ``
        (A) Delay in establishment of challenge claim.--
 If the challenge claim is established pursuant to the 
 procedures established under paragraph

    (1)
            (C) , the 
 Secretary shall make a one-time payment to the taxpayer 
 with respect to such claim equal to the aggregate 
 amount of increases in the monthly advance child 
 payments which would have been made to such taxpayer if 
 such challenge claim had been allowed to take effect 
 without regard to this subsection. Any payment under 
 this subparagraph shall be in addition to any payment 
 made under subsection

    (g) .
 ``
        (B) Termination and reinstatement of original 
 claim.--If, pursuant to the procedures established 
 under paragraph

    (1)
            (C) , the original claim is 
 terminated under subsection
            (c) (1)
        (B)
            (i) and a new 
 period of presumptive eligibility is subsequently 
 established pursuant to such procedures with respect 
 the same taxpayer and child as for such original claim, 
 the Secretary shall make a one-time payment to the 
 taxpayer with respect to such claim equal to the 
 aggregate amount of increases in the monthly advance 
 child payments which would have been made to such 
 taxpayer if such original claim had never been 
 terminated.
 ``

    (g) Rules Related to Grace Periods and Hardships.--
 ``

    (1) Automatic grace period.--
 ``
        (A) In general.--If a taxpayer establishes a 
 period of presumptive eligibility with respect to any 
 child, elects the application of this paragraph, and 
 demonstrates to the satisfaction of the Secretary that 
 such taxpayer would be allowed a monthly specified 
 child allowance under 

section 24A

    (b) (determined 
 without regard to 

section 24A
            (c) (7) ) for one or more of 
 the 3 months immediately preceding the first month of 
 such period, the Secretary shall make a one-time 
 payment to the taxpayer equal to the aggregate amount 
 of increases in the monthly advance child payments 
 which would have been made to such taxpayer if such 
 months were part of such period. The preceding sentence 
 shall not apply to the extent that the Secretary 
 determines that the failure to establish the period of 
 presumptive eligibility with respect to such child for 
 any such month was due to fraud or reckless or 
 intentional disregard of rules and regulations.
 ``
        (B) Limitation.--Subparagraph
        (A) shall not apply 
 with respect to any taxpayer more than once during any 
 36-month period.
 ``

    (2) Hardship.--If a taxpayer establishes a period of 
 presumptive eligibility with respect to any child, elects the 
 application of this paragraph (and does not elect the 
 application of paragraph

    (1) with respect to the establishment 
 of such period), demonstrates to the satisfaction of the 
 Secretary that such taxpayer would be allowed a monthly 
 specified child allowance under 

section 24A

    (b) (determined 
 without regard to 

section 24A
            (c) (7) ) for one or more of the 6 
 months immediately preceding the first month of such period, 
 and the Secretary determines that the failure to establish the 
 period of presumptive eligibility with respect to such child 
 for such months was due to domestic violence, serious illness, 
 natural disaster, or any other hardship, the Secretary shall 
 make a one-time payment to the taxpayer equal to the aggregate 
 amount of increases in the monthly advance child payments which 
 would have been made to such taxpayer if such months were part 
 of such period.
 ``

    (3) Coordination with retroactive payment for delay in 
 establishment of challenge claim.--For purposes of applying 
 paragraph

    (1) or

    (2) with respect to any challenge claim to 
 which subsection

    (f)

    (3)
        (A) applies, the period of presumptive 
 eligibility shall be treated as including the period for which 
 payment is made under such subsection.
 ``

    (h) Provisions Related to Form, Manner, and Treatment of 
Payments.--
 ``

    (1) Application of electronic funds payment 
 requirement.--The payments made by the Secretary under 
 subsection

    (a) shall be made by electronic funds transfer to 
 the same extent and in the same manner as if such payments were 
 Federal payments not made under this title.
 ``

    (2) Delivery of payments.--Notwithstanding any other 
 provision of law, the Secretary may certify and disburse 
 refunds payable under this section electronically to--
 ``
        (A) any account to which the payee authorized, on 
 or after January 1, 2024, the delivery of a refund of 
 taxes under this title or of a Federal payment (as 
 defined in 

section 3332 of title 31, United States 
 Code),
 ``
        (B) any account belonging to a payee from which 
 that individual, on or after January 1, 2024, made a 
 payment of taxes under this title, or
 ``
            (C) any Treasury-sponsored account (as defined in 
 

section 208.2 of title 31, Code of Federal 
 Regulations).
 ``

    (3) Waiver of certain rules.--Notwithstanding 

section 3325 of title 31, United States Code, or any other provision of 
 law, with respect to any payment of a refund under this 
 section, a disbursing official in the executive branch of the 
 United States Government may modify payment information 
 received from an officer or employee described in 

section 3325

    (a)

    (1)
        (B) of such title for the purpose of facilitating the 
 accurate and efficient delivery of such payment. Except in 
 cases of fraud or reckless neglect, no liability under sections 
 3325, 3527, 3528, or 3529 of title 31, United States Code, 
 shall be imposed with respect to payments made under this 
 paragraph.
 ``

    (4) Exception from reduction or offset.--Any applicable 
 payment (as defined in paragraph

    (5)
        (E)
            (iii) ) shall not be--
 ``
        (A) subject to reduction or offset pursuant to 
 

section 3716 or 3720A of title 31, United States Code,
 ``
        (B) subject to reduction or offset pursuant to 
 subsection
            (c) ,
            (d) ,

    (e) , or

    (f) of 

section 6402, or
 ``
            (C) reduced or offset by other assessed Federal 
 taxes that would otherwise be subject to levy or 
 collection.
 ``

    (5) Assignment of benefits.--
 ``
        (A) In general.--The right of any person to any 
 applicable payment shall not be transferable or 
 assignable, at law or in equity, and no applicable 
 payment shall be subject to, execution, levy, 
 attachment, garnishment, or other legal process, or the 
 operation of any bankruptcy or insolvency law.
 ``
        (B) Encoding of payments.--In the case of an 
 applicable payment described in subparagraph
        (E)
            (iii) 
            (I) that is paid electronically by direct 
 deposit through the Automated Clearing House

    (ACH) network, the Secretary of the Treasury (or the 
 Secretary's delegate) shall--
 ``
            (i) issue the payment using a unique 
 identifier that is reasonably sufficient to 
 allow a financial institution to identify the 
 payment as an applicable payment, and
 ``
            (ii) further encode the payment pursuant 
 to the same specifications as required for a 
 benefit payment defined in 

section 212.3 of 
 title 31, Code of Federal Regulations.
 ``
            (C) Garnishment.--
 ``
            (i) Encoded payments.--In the case of a 
 garnishment order that applies to an account 
 that has received an applicable payment that is 
 encoded as provided in subparagraph
        (B) , a 
 financial institution shall follow the 
 requirements and procedures set forth in part 
 212 of title 31, Code of Federal Regulations, 
 except--
 ``
            (I) notwithstanding 

section 212.4 
 of title 31, Code of Federal 
 Regulations (and except as provided in 
 subclause
            (II) ), a financial 
 institution shall not fail to follow 
 the procedures of sections 212.5 and 
 212.6 of such title with respect to a 
 garnishment order merely because such 
 order has attached, or includes, a 
 notice of right to garnish Federal 
 benefits issued by a State child 
 support enforcement agency, and
 ``
            (II) a financial institution 
 shall not, with regard to any 
 applicable payment, be required to 
 provide the notice referenced in 
 sections 212.6 and 212.7 of title 31, 
 Code of Federal Regulations.
 ``
            (ii) Other payments.--In the case of a 
 garnishment order (other than an order that has 
 been served by the United States) that has been 
 received by a financial institution and that 
 applies to an account into which an applicable 
 payment that has not been encoded as provided 
 in subparagraph
        (B) has been deposited 
 electronically on any date during the lookback 
 period or into which an applicable payment that 
 has been deposited by check on any date in the 
 lookback period, the financial institution, 
 upon the request of the account holder, shall 
 treat the amount of the funds in the account at 
 the time of the request, up to the amount of 
 the applicable payment (in addition to any 
 amounts otherwise protected under part 212 of 
 title 31, Code of Federal Regulations), as 
 exempt from a garnishment order without 
 requiring the consent of the party serving the 
 garnishment order or the judgment creditor.
 ``
            (iii) Liability.--A financial institution 
 that acts in good faith in reliance on clauses
            (i) or
            (ii) shall not be subject to liability 
 or regulatory action under any Federal or State 
 law, regulation, court or other order, or 
 regulatory interpretation for actions 
 concerning any applicable payments.
 ``
            (D) No reclamation rights.--This paragraph shall 
 not alter the status of applicable payments as tax 
 refunds or other nonbenefit payments for purpose of any 
 reclamation rights of the Department of the Treasury or 
 the Internal Revenue Service as per part 210 of title 
 31, Code of Federal Regulations.
 ``
        (E) === Definitions. ===
-For purposes of this 
 paragraph--
 ``
            (i) Account holder.--The term `account 
 holder' means a natural person whose name 
 appears in a financial institution's records as 
 the direct or beneficial owner of an account.
 ``
            (ii) Account review.--The term `account 
 review' means the process of examining deposits 
 in an account to determine if an applicable 
 payment has been deposited into the account 
 during the lookback period. The financial 
 institution shall perform the account review 
 following the procedures outlined in 

section 212.5 of title 31, Code of Federal Regulations 
 and in accordance with the requirements of 
 

section 212.6 of title 31, Code of Federal 
 Regulations.
 ``
            (iii) Applicable payment.--The term 
 `applicable payment' means--
 ``
            (I) any payment made to an 
 individual under this section (other 
 than any payment made pursuant to 
 paragraph

    (6) ),
 ``
            (II) any advance payment made by 
 a possession of the United States with 
 a mirror code tax system (as defined in 
 

section 24

    (h) ) pursuant to an election 
 under paragraph

    (6)
        (B) which 
 corresponds to a payment described in 
 subclause
            (I) , and
 ``
            (III) any advance payment made by 
 American Samoa pursuant to a program 
 for making such payments which is 
 described in paragraph

    (6)
            (C) 
            (ii) .
 ``
            (iv) Garnishment.--The term `garnishment' 
 means execution, levy, attachment, garnishment, 
 or other legal process.
 ``
            (v) Garnishment order.--The term 
 `garnishment order' means a writ, order, 
 notice, summons, judgment, levy, or similar 
 written instruction issued by a court, a State 
 or State agency, a municipality or municipal 
 corporation, or a State child support 
 enforcement agency, including a lien arising by 
 operation of law for overdue child support or 
 an order to freeze the assets in an account, to 
 effect a garnishment against a debtor.
 ``
            (vi) Lookback period.--The term `lookback 
 period' means the two-month period that begins 
 on the date preceding the date of account 
 review and ends on the corresponding date of 
 the month two months earlier, or on the last 
 date of the month two months earlier if the 
 corresponding date does not exist.
 ``

    (6) Application of advance payments in the possessions of 
 the united states.--
 ``
        (A) Puerto rico.--
 ``
            (i) For application of child tax credit 
 to residents of Puerto Rico, see 

section 24A
            (d) .
 ``
            (ii) For application of monthly advance 
 child payments to residents of Puerto Rico, see 
 subsection

    (b)

    (4) .
 ``
        (B) Mirror code possessions.--In the case of any 
 possession of the United States with a mirror code tax 
 system (as defined in 

section 24A

    (h)

    (1)
            (C) ), this 
 section shall not be treated as part of the income tax 
 laws of the United States for purposes of determining 
 the income tax law of such possession unless such 
 possession elects to have this section be so treated.
 ``
            (C) Administrative expenses of advance 
 payments.--
 ``
            (i) Mirror code possessions.--In the case 
 of any possession described in subparagraph
        (B) which makes the election described in such 
 subparagraph, the amount otherwise paid by the 
 Secretary to such possession under 

section 24A

    (h)

    (1)
        (A) with respect to taxable years 
 beginning in 2025, 2026, and 2027 shall each be 
 increased by $300,000 if such possession has a 
 plan, which has been approved by the Secretary, 
 for making monthly advance child payments 
 consistent with such election.
 ``
            (ii) American samoa.-- The amount 
 otherwise paid by the Secretary to American 
 Samoa under subparagraph
        (A) of 

section 24A

    (h)

    (3) with respect to taxable years 
 beginning in 2024, 2025, and 2026 shall each be 
 increased by $300,000 if the plan described in 
 subparagraph
        (B) of such section includes a 
 program, which has been approved by the 
 Secretary, for making monthly advance child 
 payments under rules similar to the rules of 
 this section.
 ``
            (iii) Timing of payment.--The Secretary 
 may pay, upon the request of the possession of 
 the United States to which the payment is to be 
 made, the amount of the increase determined 
 under clause
            (i) or
            (ii) , respectively, 
 immediately upon approval of the plan with 
 respect to which such payment relates.
 ``
            (i) Application of Certain Definitions and Rules Applicable to 
Child Tax Credit.--
 ``

    (1) === Definitions. ===
-Except as otherwise provided in this 
 section, terms used in this section which are also used in 
 

section 24A shall have the same respective meanings as when 
 used in 

section 24A.
 ``

    (2) Treatment of certain deaths.--A child shall not be 
 taken into account in determining the monthly advance child 
 payment for any calendar month if the death of such child 
 before the end of such month is known to the Secretary as of 
 date on which the Secretary estimates such payment.
 ``

    (3) Identification requirements.--Rules similar to the 
 rules which apply under 

section 24A

    (e) shall apply for purposes 
 of this section except that such rules shall apply with respect 
 to the return of tax for the reference taxable year or, in the 
 case of information provided through the on-line portal or 
 otherwise, with respect to the information so provided.
 ``

    (4) Restrictions on taxpayers who improperly claimed 
 credit or received monthly advance child payments.--For 
 restrictions on taxpayers who improperly claimed credit or 
 received monthly advance child payments, see 

section 24A

    (f) .
 ``

    (j) Notice of Payments.--
 ``

    (1) In general.--Not later than January 31 of the 
 calendar year following any calendar year during which the 
 Secretary makes one or more payments to any taxpayer under this 
 section, the Secretary shall provide such taxpayer with a 
 written notice which includes--
 ``
        (A) the taxpayer's taxpayer identity (as defined 
 in 

section 6103

    (b)

    (6) ),
 ``
        (B) the aggregate amount of such payments made to 
 such taxpayer during such calendar year, and
 ``
            (C) such other information as the Secretary 
 determines appropriate.
 ``

    (2) Certain payments subject to treatment as excess 
 advance payments.--In the case of any payments made to a 
 taxpayer which the Secretary has determined are subject to 
 treatment as excess advance payments, the notice provided under 
 paragraph

    (1) to such taxpayer shall include the amount of such 
 payments.
 ``

    (k) Notification of Certain Events.--With respect to any taxpayer 
receiving monthly advance child payments under this section with 
respect to any specified child, the Secretary shall, to the maximum 
extent practicable, provide reasonable advance notice of each of the 
following:
 ``

    (1) Any month with respect to which such monthly advance 
 child payment will increase (relative to the preceding month) 
 by reason of an inflation adjustment under 

section 24A

    (b)

    (3)
        (A) .
 ``

    (2) Any month with respect to which such monthly advance 
 child payment will be reduced (relative to the preceding month) 
 by reason of such child ceasing to be a specified child by 
 reason of attaining age 18.
 ``

    (3) In the case of a taxpayer with a specified child 
 described in 

section 24A

    (b)

    (1)
        (A) , any month with respect to 
 which such monthly advance child payment will be reduced by 
 reason of such child attaining age 6.
 ``

    (4) Such other events as the Secretary determines 
 appropriate.
 ``
            (l) Regulations.--The Secretary shall issue such regulations or 
other guidance as the Secretary determines necessary or appropriate to 
carry out the purposes of this section.''.
            (c) Termination of Annual Child Tax Credit.--

Section 24 of such 
Code is amended by adding at the end the following new subsection:
 ``
            (l) Termination.--This section shall not apply to (and no payment 
shall be made under subsection

    (k) with respect to) any taxable year 
beginning after December 31, 2024.''.
            (d) Disclosure of Information Relating to Advance Payment of Child 
Tax Credit.--

Section 6103

    (e) of such Code is amended by adding at the 
end the following new paragraph:
 ``

    (12) Disclosure of information relating to advance 
 payment of child tax credit.--
 ``
        (A) Joint filers.--In the case of any individual 
 who is eligible for monthly advance child payments 
 under 

section 7527A, if the reference taxable year (as 
 defined in 

section 7527A
            (d) (2) ) that the Secretary uses 
 to calculate such payments is a year for which the 
 individual filed an income tax return jointly with 
 another individual, the Secretary may disclose to such 
 individual any information which is relevant in 
 determining the monthly advance child payment under 
 

section 7527A, and the individual's eligibility for 
 such payment, including information regarding any of 
 the following:
 ``
            (i) The number of specified children, 
 including by reason of the birth of a child.
 ``
            (ii) The name and TIN of specified 
 children.
 ``
            (iii) Marital status.
 ``
            (iv) Modified adjusted gross income.
 ``
            (v) Principal place of abode.
 ``
            (vi) Such other information as the 
 Secretary may provide.
 ``
        (B) Competing claimants.--In the case of any 
 adjudication under 

section 7527A

    (f) , the Secretary may 
 disclose return information provided by the individual 
 with the original claim to the individual with the 
 challenge claim, return information provided by the 
 individual with the challenge claim to the individual 
 with the original claim, and any other information 
 considered by the Secretary in such adjudication to 
 either or both such individuals. Such information shall 
 be limited to the items specified in subparagraph
        (A) and the following:
 ``
            (i) Information received under any 
 agreements or coordination the Secretary 
 entered into with--
 ``
            (I) any State, local government, 
 Tribal government, or possession of the 
 United States, or
 ``
            (II) any other individual or 
 entity that the Secretary determines to 
 be appropriate for purposes of 
 adjudicating claims under 

section 7527A

    (f) .
 ``
            (ii) Information considered by the 
 Secretary about where and with whom the 
 specified child resided.
 ``
            (iii) Information considered by the 
 Secretary about expenditures made by the 
 claimants to the extent such payments relate to 
 the original or challenge claim.''.

    (e) Conforming Amendments.--

    (1) Section 26

    (b)

    (2) of such Code is amended by striking 
 ``and'' at the end of subparagraph
        (Y) , by striking the period 
 at the end of subparagraph
        (Z) and inserting ``, and'', and by 
 adding at the end the following new subparagraph:
 ``

    (AA) section 24A

    (g)

    (2) (relating to increase in 
 tax equal to excess advance payments in certain 
 circumstances).''.

    (2) Section 152

    (f)

    (6)
        (B)
            (ii) of such Code is amended to 
 read as follows:
 ``
            (ii) the credits under sections 24, 24A, 
 and 24B and the payments under sections 
 7527A,''.

    (3) Section 3402

    (f)

    (1)
            (C) of such Code is amended by 
 inserting ``or 

section 24A (determined after application of 
 subsection

    (g) thereof)'' after ``

section 24 (determined after 
 application of subsection

    (j) thereof)''.

    (4) Section 6103
            (l) (13)
        (A)
            (v) of such Code is amended by 
 inserting ``or 

section 24A, as the case may be'' after 
 ``

section 24''.

    (5) Section 6211

    (b)

    (4)
        (A) of such Code is amended by 
 inserting ``24A by reason of subsection
            (d) thereof,'' after 
 ``24 by reason of subsections
            (d) and
            (i) (1) thereof,''.

    (6) Section 6213

    (g)

    (2)
            (I) of such Code is amended by 
 inserting ``or 

section 24A

    (e) (relating to monthly child tax 
 credit)'' after ``

section 24

    (e) (relating to child tax 
 credit)''.

    (7) Section 6213

    (g)

    (2)
            (L) of such Code is amended by 
 inserting ``24A,'' after ``24,''.

    (8) Section 6213

    (g)

    (2)
        (P) of such Code is amended--
        (A) by inserting ``or 24A

    (f)

    (2) '' after ``

section 24

    (g)

    (2) '',
        (B) by inserting ``or 24A'' after ``under 

section 24'', and
            (C) by striking ``subsection

    (g)

    (1) thereof'' and 
 inserting ``

section 24

    (g)

    (1) or 

section 24A

    (f)

    (1) , 
 respectively''.

    (9) Section 6695

    (g)

    (2) of such Code is amended by inserting 
 ``24A,'' after ``24,''.

    (10) Paragraph

    (2) of 

section 1324

    (b) of title 31, United 
 States Code, is amended by inserting ``24A,'' after ``24,''.

    (11) 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 inserting after the item relating to 

section 24 
 the following new items:

``

Sec. 24A. Monthly child tax credit.
``

Sec. 24B. Credit for certain other dependents.''.

    (12) The table of sections for chapter 77 of such Code is 
 amended by striking the item relating to 

section 7527A and 
 inserting the following new item:

``

Sec. 7527A. Monthly payments of child tax credit.''.

    (f) Effective Dates.--

    (1) In general.--Except as otherwise provided in this 
 subsection, the amendments made by this section shall apply to 
 taxable years beginning after December 31, 2024.

    (2) Monthly advance child payments.--The amendments made by 
 subsection

    (b) shall apply to--
        (A) calendar months beginning after the date of the 
 enactment of this Act, and
        (B) in the case of 

section 7527A

    (g) of the Internal 
 Revenue Code of 1986 (relating to grace periods and 
 hardships), calendar months beginning after December 
 31, 2024.

    (3) Information disclosure.--The amendment made by 
 subsection
            (d) shall take effect on the date of the enactment 
 of this Act.
 <all>