,,ii  #aaeth ,,congress  #ast ,session  
,s4 #bjbd  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,october #bf1  
#bjag,ms4 ,heitkamp 7for herself and    
,mr4 ,kaine7 introduced the following   
bill2 which was read twice and referred 
to the ,committee on ,finance  ,a ,,bill
  ,to amend the ,internal ,revenue ,code
 of #aihf to create a tax credit for    
foster families4  #a4 ,short title ,this
 ,act may be cited as the ,foster ,care 
,tax ,credit ,act4  #b4 ,foster care tax
 credit  7a7 ,allowance of credit  7#a7 
,in general ,subpart ,a of part ,,iv of 
subchapter ,a of chapter #a of the      
,internal ,revenue ,code of #aihf is    
amended by inserting after section      
#be;,d the following new section3       
#be;,e4 ,foster care tax credit  7a7    
,allowance of credit ,with respect to   
each qualifying foster child of an      
eligible taxpayer1 for each calendar    
month occurring during the taxable year 
that such child resides in the home of  
such taxpayer1 there shall be allowed as

 a credit against the tax imposed by    
this chapter for the taxable year an    
amount equal to #a_/ab of the amount    
determined under subsection 7b74  7b7   
,amount determined  7#a7 ,in general    
,the amount determined under this       
subsection with respect to an eligible  
taxpayer and a taxable year is--  7,a7  
#a1jjj1 reduced by  7,b7 #ej for each   
#a1jjj 7or fraction thereof7 by which   
the eligible taxpayer's modified        
adjusted gross income exceeds the       
threshold amount4  ,for purposes of the 
preceding sentence1 the term modified   
adjusted gross income means adjusted    
gross income increased by any amount    
excluded from gross income under section
 #iaa1 #ica1 or #icc4  7#b7 ,threshold  
amount ,for purposes of paragraph 7#a71 
the term threshold amount has the       
meaning given such term by section      
#bd7;b77#b74  7c7 ,qualifying foster    
child ,for purposes of this section1 the
 term qualifying foster child means an  
eligible foster child 7within the       

meaning of section #aeb7;f77#a77;,c77 of
 the eligible taxpayer--  7#a7 who has  
not attained age #ag1  7#b7 who is a    
citizen1 national1 or resident of the   
,united ,states1  7#c7 who resides in   
the home of the eligible taxpayer for   
not less than #a calendar month during  
the taxable year1 and  7#d7 with respect
 to whom the credit under section #bd is
 not allowable to the eligible taxpayer 
or any other taxpayer who would be an   
eligible taxpayer but for paragraph 7#c7
 of subsection 7d74  7d7 ,eligible      
taxpayer ,for purposes of this section1 
the term eligible taxpayer means any    
taxpayer1 except that-- 7#a7 no single  
household shall include more than #a    
eligible taxpayer1  7#b7 married        
individuals filing a joint return shall 
be treated as #a eligible taxpayer1 and 
7#c7 in the case of individuals not     
described in paragraph 7#b7 who are     
members of the same household1 only the 
taxpayer with the highest adjusted gross
 income for the taxable year shall be   

treated as an eligible taxpayer4  7e7   
,calendar month ,for purposes of this   
section1 if a foster child resides in   
the home of the taxpayer for more than  
#ae consecutive days of a calendar month
 but fewer than the total number of days
 in such calendar month1 such foster    
child shall be treated as residing in   
the home of the taxpayer for the full   
calendar month4  7f7 ,portion of credit 
refundable  7#a7 ,in general ,the       
aggregate credits allowed to a taxpayer 
under subpart ,c shall be increased by  
the lesser of-- 7,a7 the credit which   
would be allowed under this section     
without regard to this subsection and   
the limitation under section #bf7;a7    
7determined after any reduction of the  
credit under section #bd7;a7 by reason  
of section #bd7;d771 or  7,b7 the amount
 by which the aggregate amount of       
credits allowed by this subpart         
7determined without regard to this      
subsection1 and after any reduction of  
the credit under section #bd7;a7 by     

reason of section #bd7;d77 would        
increase if the limitation imposed by   
section #bf7;a7 were increased by the   
greater of--  7i7 #ae percent of so much
 of the taxpayer's earned income 7within
 the meaning of section #cb7 which is   
taken into account in computing taxable 
income for the taxable year as exceeds  
#c1jjj1 or  7ii7 in the case of a       
taxpayer with #c or more qualifying     
foster children residing in the home of 
the taxpayer for all months in the      
taxable year 7without regard to whether 
the same #c children reside in the home 
of the taxpayer for all such months71   
the excess 7if any7 of--  7,i7 the      
taxpayer's social security taxes for the
 taxable year1 over  7,,ii7 the credit  
allowed under section #cb for the       
taxable year4  ,the amount of the credit
 allowed under this subsection shall not
 be treated as a credit allowed under   
this subpart and shall reduce the amount
 of credit otherwise allowable under    
subsection 7a7 without regard to section

 #bf7;a74 ,for purposes of subparagraph 
7,b71 any amount excluded from gross    
income by reason of section #aab shall  
be treated as earned income which is    
taken into account in computing taxable 
income for the taxable year4  7#b7      
,social security taxes ,for purposes of 
paragraph 7#a71 the term social security
 taxes has the same meaning as when used
 in section #bd7;d77#a74  7g7           
,identification requirements  7#a7      
,qualifying child identification        
requirement ,no credit shall be allowed 
under this section to an eligible       
taxpayer with respect to any qualifying 
foster child unless the taxpayer        
includes the name and taxpayer          
identification number of such qualifying
 foster 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     
return4  7#b7 ,taxpayer identification  
requirement ,no credit shall be allowed 
under this section if the identifying   

number of the eligible taxpayer was     
issued after the due date for filing the
 return for the taxable year4  7h7      
,restrictions on ,taxpayers ,who        
,improperly ,claimed ,credit in ,prior  
,year  7#a7 ,taxpayers making prior     
fraudulent or reckless claims  7,a7 ,in 
general ,no credit shall be allowed     
under this section for any taxable year 
in the disallowance period4  7,b7       
,disallowance period ,for purposes of   
subparagraph 7,a71 the disallowance     
period is--  7i7 the period of #aj      
taxable years after the most recent     
taxable year for which there was a final
 determination that the taxpayer's claim
 of credit under this section was due to
 fraud1 and  7ii7 the period of #b      
taxable years after the most recent     
taxable year for which there was a final
 determination that the taxpayer's claim
 of credit under this section was due to
 reckless or intentional disregard of   
rules and regulations 7but not due to   
fraud74  7#b7 ,taxpayers making improper

 prior claims ,in the case of a taxpayer
 who is denied credit under this section
 for any taxable year as a result of the
 deficiency procedures under subchapter 
,b of chapter #fc1 no credit shall be   
allowed under this section for any      
subsequent taxable year unless the      
taxpayer provides such information as   
the ,secretary may require to           
demonstrate eligibility for such credit4
  4  7#b7 ,conforming amendments  7,a7  
,section #fbaa7;b77#d7 of the ,internal 
,revenue ,code of #aihf is amended by   
inserting #be;,e7f71 before #cb14  7,b7 
,section #acbd7;b77#b7 of title #ca1    
,united ,states ,code1 is amended by    
inserting #be;,e1 after #be;,a14  7,c7  
,the table of sections for subpart ,a of
 part ,,iv of subchapter ,a of chapter  
#a of the ,internal ,revenue ,code of   
#aihf is amended by inserting after the 
item relating to section #be;,d the     
following new item3  ,sec4 #be;,e4      
,foster care tax credit4  4  7b7        
,application of tax return preparer due 

diligence penalty ,section #ffie7;g7 of 
the ,internal ,revenue ,code of #aihf is
 amended by inserting #be;,e1 after     
#be;,a7a77#a714  7c7 ,effective date    
,the amendments made by this section    
shall apply to calendar months beginning
 after ,december #ca1 #bjag1 in taxable 
years beginning after such date4  7d7   
,education ,the ,secretary of ,health   
and ,human ,services 7or the            
,secretary's delegate71 in coordination 
with the ,secretary of the ,treasury or 
such ,secretary's delegate1 shall       
identify provisions in the ,internal    
,revenue ,code of #aihf that can be used
 by or can benefit foster families1 and 
shall increase outreach efforts to      
provide information and educational     
materials regarding such provisions to  
,state and ,indian tribal foster care   
agencies and to foster families4