A bill to amend the Internal Revenue Code of 1986 to provide a refundable credit against tax with respect to education and training of developmentally disabled children.

Amends the Internal Revenue Code to allow a tax credit for up to $3,000 of the amount paid or incurred by the taxpayer during the taxable year for qualified child disability expenses for services and equipment related to education and training of a child of the taxpayer with a developmental disability, including behavioral therapy, speech therapy, occupational therapy, physical therapy, auditory therapy, assistive communication technology, and other related services. Phases out the credit by $500 increments per $1,000 of modified adjusted gross income over $150,000.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1122 Introduced in Senate (IS)]






107th CONGRESS
  1st Session
                                S. 1122

  To amend the Internal Revenue Code of 1986 to provide a refundable 
     credit against tax with respect to education and training of 
                   developmentally disabled children.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 28, 2001

 Mr. Torricelli introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide a refundable 
     credit against tax with respect to education and training of 
                   developmentally disabled children.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REFUNDABLE CREDIT FOR CHILD DISABILITY EDUCATION AND 
              TRAINING EXPENSES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable personal 
credits) is amended by redesignating section 35 as section 36 and 
inserting after section 34 the following new section:

``SEC. 35. CHILD DISABILITY EDUCATION AND TRAINING EXPENSES.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for the taxable year an amount equal to the amount paid or incurred by 
the taxpayer during the taxable year for qualified child disability 
expenses.
    ``(b) Limitations.--
            ``(1) Maximum dollar amount.--The amount allowed as a 
        credit under subsection (a) to the taxpayer for the taxable 
        year shall not exceed $3,000.
            ``(2) Limitation based on adjusted gross income.--
                    ``(A) In general.--The amount of the credit 
                allowable under subsection (a) (after application of 
                paragraph (1)) shall be reduced (but not below zero) by 
                $500 for each $1,000 (or fraction thereof) by which the 
                taxpayer's modified adjusted gross income exceeds 
                $150,000.
                    ``(B) Modified adjusted gross income.--For purposes 
                of subparagraph (A), 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) Cost-of-living adjustment.--
                            ``(i) In general.--In the case of any 
                        taxable year beginning in a calendar year after 
                        2002, the $150,000 amount under subparagraph 
                        (A) shall be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                the taxable year begins, determined by 
                                substituting `calendar year 2001' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                            ``(ii) Rounding rules.--If any amount after 
                        adjustment under clause (i) is not a multiple 
                        of $1,000, such amount shall be rounded to the 
                        next lower multiple of $1,000.
    ``(c) Qualified Child Disability Expenses.--For purposes of this 
section--
            ``(1) In general.--The term `qualified child disability 
        expenses' means amounts paid for services and equipment related 
        to education and training of a qualified child of the taxpayer 
        in connection with a developmental disability of such child, 
        including--
                    ``(A) behavioral therapy,
                    ``(B) speech therapy,
                    ``(C) occupational therapy,
                    ``(D) physical therapy,
                    ``(E) auditory therapy,
                    ``(F) assistive communication technology, and
                    ``(G) such other services as the Secretary may, in 
                consultation with the Secretary of Health and Human 
                Services and the Secretary of Education, provide by 
                regulation.
            ``(2) Developmental disability.--The term `developmental 
        disability' has the same meaning given the term in section 102 
        of the Developmental Disabilities Assistance and Bill of Rights 
        Act of 2000 (Public Law 106-402; 114 Stat. 1682).
            ``(3) Qualified child.--The term `qualified child' means 
        any individual if--
                    ``(A) the taxpayer is allowed a deduction under 
                section 151 with respect to such individual for the 
                taxable year,
                    ``(B) such individual has not attained the age of 
                18 as of the close of the calendar year in which the 
                taxable year of the taxpayer begins, and
                    ``(C) such individual bears a relationship to the 
                taxpayer described in section 32(c)(3)(B).
    ``(d) Verification Requirements.--
            ``(1) Expenses must be substantiated.--Qualified child 
        disability expenses to which subsection (a) applies may be 
        taken into account under this section only if the taxpayer 
        substantiates such expense in such form as the Secretary may 
        prescribe.
            ``(2) Identification requirement.--No credit shall be 
        allowed under this section with respect to any qualified child 
        unless the taxpayer includes the name and taxpayer 
        identification number of such qualified child on the return of 
        tax for the taxable year.
    ``(e) Special Rules.--
            ``(1) Denial of double benefit.--
                    ``(A) In general.--No credit shall be allowed under 
                subsection (a) for any expense for which a deduction or 
                credit is allowed under any other provision of this 
                chapter.
                    ``(B) Grants.--No credit shall be allowed under 
                subsection (a) for any expense to the extent that funds 
                for such expense are received under any Federal, State, 
                or local program.
            ``(2) Married couples must file joint returns.--Rules 
        similar to the rules of paragraphs (2), (3), and (4) of section 
        21(e) shall apply for purposes of this section.
            ``(3) Basis adjustment.--For purposes of this subtitle, if 
        a credit is allowed under this section for any expenditure with 
        respect to any property, the increase in the basis of such 
        property which would (but for this subsection) result from such 
        expenditure shall be reduced by the amount of the credit so 
        allowed.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 35 of such Code''.
            (2) 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 striking the last item and inserting the 
        following new items:

                              ``Sec. 35. Child disability expenses.
                              ``Sec. 36. Overpayments of tax.''.
            (3) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (26), by striking the period at 
        the end of paragraph (27) and inserting ``, and'', and by 
        adding at the end the following:
            ``(28) in the case of property with respect to which a 
        credit was allowed under section 35, to the extent provided in 
        section 35(e)(3).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.
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