S. 438 — Introduced in Senate

II 113th CONGRESS 1st Session S. 438 IN THE SENATE OF THE UNITED STATES March 4, 2013 Mr. Reid (for Mr. Begich) 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 tax credit for professional school personnel in early childhood education, to expand the deduction for certain expenses of teachers to teachers in early childhood education, and to modify the credit for dependent care services. 1. Short title This Act may be cited as the Tax Credit for Early Educators Act of 2013. 2. Tax credit for professional school personnel in early childhood education (a) In general Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section: 25E. Professional school personnel in early childhood education (a) Allowance of credit In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to $3,000. (b) Eligible individual For purposes of this section— (1) In general The term eligible individual means any individual— (A) who is employed in a position which involves regular contact with students in an early childhood school or program, and (B) whose position involves the formulation or implementation of the educational program for such school or program. (2) Early childhood school or program The term early childhood school or program means any school or program which provides early childhood education, as determined under State law. (c) Cost-of-Living adjustment (1) In general In the case of any taxable year beginning in a calendar year after 2013, the $3,000 amount contained in subsection (a) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting calendar year 2012 for calendar year 1992 in subparagraph (B) thereof. (2) Rounding If any increase determined under paragraph (1) is not a multiple of $10, such increase shall be increased to the next highest multiple of $10. . (b) Clerical amendment The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25D the following new item: Sec. 25E. Professional school personnel in early childhood education. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2012. 3. Deduction for certain expenses of early childhood, preschool, elementary and secondary school teachers (a) In general Subparagraph (D) of section 62(a)(2) of the Internal Revenue Code of 1986 (relating to certain expenses of elementary and secondary school teachers) is amended to read as follows: (D) Certain expenses of early childhood, preschool, elementary and secondary school teachers In the case of taxable years beginning before 2018, the deductions allowed by section 162 which consist of expenses, not in excess of the applicable amount, paid or incurred by an eligible educator in connection with books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services) and other equipment, and supplementary materials used by the eligible educator in the classroom. . (b) Definitions Subsection (d) of section 62 of such Code (relating to definition; special rules) is amended to read as follows: (d) Definitions relating to early childhood, preschool, elementary and secondary school teachers For purposes of subsection (a)(2)(D) and this subsection— (1) Applicable amount The term applicable amount means— (A) $500 in the case of a full-time educator, and (B) $250 in any other case. (2) Eligible educator The term eligible educator means, with respect to any taxable year, an individual who is— (A) a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 450 hours during a school year which ends during such taxable year, or (B) a teacher, instructor, counselor, or aid in a preschool or early childhood program for at least 450 hours during the taxable year. (3) Full-time educator The term full-time educator means, with respect to any taxable year, an individual who for such taxable year satisfies the requirements of subparagraph (A) or (B) of paragraph (2) applied by substituting 900 hours for 450 hours therein. (4) School The term school means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law. (5) Preschool or early childhood program The term preschool or early childhood program means any program which— (A) is for providing preschool and receives funds for carrying out preschool programs pursuant to— (i) part A of title I of the Elementary and Secondary Education Act of 1965, or (ii) subpart 2 of part B of title I of such Act, or (B) is an early childhood program, as defined under section 103 of the Higher Education Act of 1965. . (c) Effective date The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act. 4. Modification of credit for dependent care services (a) In general Subsection (a) of section 21 of the Internal Revenue Code of 1986 is amended to read as follows: (a) Allowance of credit In the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 35 percent of the employment-related expenses (as defined in subsection (b)(2)) paid by such individual during the taxable year. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.