Child Care Tax Credit Reform Act of 1989

Child Care Tax Credit Reform Act of 1989 - Amends the Internal Revenue Code to increase from $2,400 to $3,600 (from $4,800 to $5,400 in the case of two or more qualifying dependents) the amount of employment-related expenses subject to the dependent care income tax credit. Denies the credit to taxpayers having adjusted gross income of $50,000 or more.

Removes the 20 percent minimum credit percentage, thus subjecting taxpayers having income above $30,000 to an incremental decrease in the applicable credit percentage.

 
HR 392 IH
101st CONGRESS
1st Session
 H. R. 392
To amend the Internal Revenue Code of 1986 to increase the child care credit
for lower-income working parents.
IN THE HOUSE OF REPRESENTATIVES
January 3, 1989
Mr. SOLOMON 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 increase the child care credit
for lower-income working parents.
  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 Tax Credit Reform Act of 1989'.
SEC. 2. CHILD CARE CREDIT AMENDMENTS.
  (a) INCREASE IN AMOUNT OF EMPLOYMENT-RELATED EXPENSES TAKEN INTO ACCOUNT-
  (1) 1 QUALIFYING INDIVIDUAL- Paragraph (1) of section 21(c) of the Internal
  Revenue Code of 1986 (relating to dollar limit on amount creditable)
  is amended by striking `$2,400' and inserting `$3,600'.
  (2) 2 OR MORE QUALIFYING INDIVIDUALS- Paragraph (2) of section 21(c) of
  such Code (relating to dollar limit on amount creditable) is amended by
  striking `$4,800' and inserting `$5,400'.
  (b) DENIAL OF CREDIT TO TAXPAYERS WHOSE ADJUSTED GROSS INCOME IS $50,000 OR
  MORE- Paragraph (1) of section 21(a) of the Internal Revenue Code of 1986
  (allowing credit generally) is amended by inserting `whose adjusted gross
  income for the taxable year is less than $50,000, and' before `who'.
  (c) DECREASE IN PERCENTAGE OF EMPLOYMENT-RELATED EXPENSES TAKEN INTO ACCOUNT
  BY TAXPAYERS WHOSE ADJUSTED GROSS INCOME EXCEEDS $28,000- Paragraph (2)
  of section 21(a) of the Internal Revenue Code of 1986 (defining applicable
  percentage) is amended by striking `(but not below 20 percent)'.
  (d) EFFECTIVE DATE- The amendments made by subsections (a), (b), and (c)
  shall apply to taxable years beginning after December 31, 1989.