H.R. 8540 - Child Care for American Families Act

118TH CONGRESS
2D SESSION

H.R. 8540

To amend the Internal Revenue Code of 1986 to enhance the employer-provided child care credit.

IN THE HOUSE OF REPRESENTATIVES

MAY 23, 2024

Mr. KUSTOFF introduced the following bill; which was referred to the Committee on _____

A BILL

To amend the Internal Revenue Code of 1986 to enhance the employer-provided child care credit.

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 "Child Care for American Families Act".

SEC. 2. INCREASED IN EMPLOYER-PROVIDED CHILD CARE CREDIT AMOUNT.

(a) IN GENERAL. — Section 45F(a)(1) of the Internal Revenue Code of 1986 is amended by striking "25 percent" and inserting "the applicable percentage".

(b) APPLICABLE PERCENTAGE. — Section 45F(a) of such Code, as amended by subsection (a), is amended —

(1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and by moving the margins of such subparagraphs 2 ems to the right,

(2) by striking "For purposes" and inserting the following:

“(1) CREDIT ALLOWED. — For purposes", and

(3) by adding at the end the following new paragraph:

“(2) APPLICABLE PERCENTAGE. —

“(A) IN GENERAL. — For purposes of paragraph (1)(A), the applicable percentage is —

“(i) except as otherwise provided in this paragraph, 40 percent,

“(ii) in the case of qualified child care expenditures of an eligible small business, 50 percent, and

“(iii) in the case of any qualified childcare expenditures paid in connection with qualified child care facility located in a qualified census tract, 60 percent.

“(B) ELIGIBLE SMALL BUSINESS. — For purposes of subsection subparagraph (A), the term 'eligible small business' means, with respect to any taxable year, any taxpayer if the annual average number of employees employed by such person during either of the 2 preceding calendar years was 500 or fewer. For purposes of the preceding sentence, a preceding taxable year may be taken into account only if the taxpayer was in existence throughout the year.

“(C) ELIGIBLE CENSUS TRACT. —

“(i) IN GENERAL. — For purposes of subparagraph (A), the term 'eligible census tract' means any population census tract which —

“(I) is described in section 45D(e), or

“(II) is not an urban area.

“(ii) URBAN AREA. — For purposes of this subparagraph, the term 'urban area' means a census tract (as defined by the Bureau of the Census) which, according to the most recent decennial census, has been designated as an urban area by the Secretary of Commerce.".

(c) DOLLAR LIMITATION. — Section 45F(b) of such Code is amended to read as follows:

“(b) DOLLAR LIMITATION. —

“(1) AGGREGATE LIMITATION. — The credit allowable under subsection (a) for any taxable year shall not exceed $1,200,000.

“(2) LIMITATION WITH RESPECT TO QUALIFIED CHILD CARE EXPENDITURES. — The aggregate amount of qualified child care expenditures which may be taken into account under this section for any taxable year shall not exceed $2,000,000.".

(d) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 3. RULES OF APPLICATION FOR MULTI-EMPLOYER FACILITIES.

Section 45F of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(g) REGULATIONS. — The Secretary shall issue such regulations or other guidance as may be necessary to carry out the purposes of this section, including guidance on the application of this section to multiple employers jointly acquiring, constructing, or operating a qualified child care facility.".

SEC. 4. DISSEMINATION OF INFORMATION.

(a) IN GENERAL. — Not later than one year after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall establish a public awareness program to inform the taxpayers about —

(1) the availability of the credit for employer provided child care under section 45F of the Internal Revenue Code of 1986, and

(2) filing procedures for such credit.

(b) METHOD. — In carrying out this section, the Secretary of the Treasury (or the Secretary's delegate) shall use appropriate means of communication to ensure awareness by all taxpayers who are eligible for the credit allowed under section 45F of the Internal Revenue Code of 1986.