,i  #aaith ,,congress  #ast ,session    
,h4 ,r4 #dfc  ,,in ,,the ,,house ,,of   
,,representatives  ,january #ae1        
#bjbe,mrs4 ,sykes introduced the        
following bill2 which was referred to   
the ,committee on ,ways and ,means  ,a  
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to expand the earned    
income and child tax credits1 and for   
other purposes4  #a4 ,short title2 table
 of contents  7a7 ,short title ,this    
,act may be cited as the ,lower ,your   
,taxes ,act4  7b7 ,table of contents    
,the table of contents of this ,act is  
as follows3 ,sec4 #a4 ,short title2     
table of contents4,sec4 #b4 ,sense of   
,congress4,sec4 #c4 ,expansion of earned
 income tax credit4,sec4 #d4 ,payments  
to taxpayers determined by treating     
,state non-refundable earned income tax 
credits as refundable4,sec4 #e4         
,establishment of refundable child tax  
credit with monthly advance             
payment4,sec4 #f4 ,capital gains rates  
not applicable to certain high income   

taxpayers4,sec4 #g4 ,increase in rates  
of certain corporate taxes4  #b4 ,sense 
of ,congress ,it is the sense of        
,congress that the net revenue derived  
from this ,act should be used to reduce 
the national deficit1 to the extent     
thereof1 and thereafter to reduce the   
national debt4  #c4 ,expansion of earned
 income tax credit  7a7 ,credit         
percentage ,the table contained in      
section #cb7;b77#a7 of the ,internal    
,revenue ,code of #aihf is amended--    
7#a7 by striking #cd and inserting #fh1 
7#b7 by striking #dj and inserting #hj1 
7#c7 by striking #de and inserting #ij1 
and  7#d7 by striking #g4fe in the      
column with the heading ,the credit     
percentage is3 and inserting #ce4  7b7  
,phaseout percentage ,the table         
contained in section #cb7;b77#a7 of such
 ,code is amended-- 7#a7 by striking    
#ae4ih and inserting #g1  7#b7 by       
striking #ba4jf both places it appears  
and inserting #aj1 and  7#c7 by striking
 #g4fe in the column with the heading   

,the phaseout percentage is3 and        
inserting #g4  7c7 ,earned income amount
 ,the table contained in section        
#cb7;b77#b77;,a7 of such ,code is       
amended-- 7#a7 by striking #f1ccj and   
inserting #ai1jjj1  7#b7 by striking    
#h1hij and inserting #bg1jjj1 and  7#c7 
by striking #d1bbj and inserting        
#ae1jjj4  7d7 ,phaseout amount  7#a7 ,in
 general ,the table contained in section
 #cb7;b77#b77;,a7 of such ,code is      
amended-- 7,a7 by striking #aa1faj both 
places it appears and inserting #cj1jjj1
 and  7,b7 by striking #e1bhj and       
inserting #ae1jjj4  7#b7 ,joint returns 
,section #cb7;b77#b77;,b7 of such ,code 
is amended by striking determined under 
subparagraph 7,a7 shall be increased by 
#e1jjj and inserting twice the amount   
determined under subparagraph 7,a74     
7#c7 ,inflation adjustment ,section     
#cb7;j7 of such ,code is amended to read
 as follows3  7j7 ,inflation adjustments
  7#a7 ,earned income and phaseout      
amounts  7,a7 ,in general ,in the case  

of any taxable year beginning after     
#bjbf1 each of the dollar amounts in    
subsection 7b77#b77;,a7 shall be        
increased by an amount equal to-- 7i7   
such dollar amount1 multiplied by  7ii7 
the ,,gdp adjustment determined under   
subparagraph 7,b7 for the calendar year 
in which the taxable year begins4  7,b7 
,,gdp adjustment ,for purposes of this  
paragraph1 the term ,,gdp adjustment for
 any calendar year is the percentage 7if
 any7 by which-- 7i7 the per capita     
nominal gross domestic product for the  
preceding calendar year 7as determined  
by the ,secretary71 exceeds  7ii7 the   
per capita nominal gross domestic       
product for calendar year #bjbe 7as     
determined by the ,secretary74  7,c7    
,rounding ,if any dollar amount in      
subsection 7b77#b77;,a71 after any      
increase under subparagraph 7,a71 is not
 a multiple of #aj1 such dollar amount  
shall be rounded to the nearest multiple
 of #aj4  7#b7 ,excessive investment    
income  7,a7 ,in general ,in the case of

 any taxable year beginning after #bjba1
 the dollar amount in subsection 7i77#a7
 shall be increased by an amount equal  
to-- 7i7 such dollar amount1 multiplied 
by  7ii7 the cost-of-living adjustment  
determined under section #a7;f77#c7 for 
the calendar year in which the taxable  
year begins1 determined by substituting 
calendar year #bjbj for calendar year   
#bjaf in subparagraph 7,a77ii7 thereof4 
7,b7 ,rounding ,if the dollar amount in 
subsection 7i77#a71 after any increase  
under subparagraph 7,a71 is not a       
multiple of #ej1 such dollar amount     
shall be rounded to the next lowest     
multiple of #ej4  4  7e7 ,age           
limitations ,section                    
#cb7;c77#a77;,a77ii77,,ii7 of such ,code
 is amended by striking has attained age
 #be but not attained age #fe and       
inserting has attained age #ah4  7f7    
,notification of taxpayers by ,treasury 
of potential eligibility for the earned 
income tax credit  7#a7 ,in general     
,with respect to taxable years beginning

 in calendar years after #bjbe1 the     
,secretary shall establish a program to 
notify 7whether by electronic means or  
otherwise7 specified individuals that   
such individuals may be eligible for the
 earned income tax credit4  7#b7        
,specified individual ,for purposes of  
this subsection1 the term specified     
individual means any individual who--   
7,a7 based on information available to  
the ,secretary related to the taxable   
year or the preceding taxable year1 the 
,secretary determines is likely to be   
eligible for the earned income tax      
credit1 and  7,b7 either-- 7i7 filed a  
return of tax for such taxable year and 
did not claim the earned income tax     
credit1 or  7ii7 did not 7as of such    
determination7 file a return of tax for 
such taxable year4  7#c7 ,secretary ,for
 purposes of this subsection1 the term  
,secretary means the ,secretary of the  
,treasury or the ,secretary's delegate4 
7g7 ,effective date ,the amendments made
 by this section shall apply to taxable 

years beginning after ,december #ca1    
#bjbe4  #d4 ,payments to taxpayers      
determined by treating ,state           
non-refundable earned income tax credits
 as refundable  7a7 ,in general ,the    
,secretary shall establish a program for
 making annual payments to eligible     
individuals equal to the ,state         
refundable earned income tax credit     
equivalency amount with respect to      
taxable years beginning in calendar     
years after #bjbe4  7b7 ,eligible       
individual ,for purposes of this        
section-- 7#a7 ,in general ,the term    
eligible individual means any individual
 who is eligible for1 and claims1 a     
non-refundable earned income tax credit 
for a taxable year beginning after      
,december #ca1 #bjbe1 under the income  
tax laws of an eligible ,state4  7#b7   
,eligible ,state ,the term eligible     
,state means any ,state if-- 7,a7 the   
,secretary determines that such ,states 
has in effect1 as of the date of the    
enactment of this ,act1 a non-refundable

 earned income tax credit1 and  7,b7    
such ,state enters into an agreement    
with the ,secretary to provide the      
,secretary such information as the      
,secretary may require to administer    
this section4  7#c7 ,non-refundable     
earned income tax credit  7,a7 ,in      
general ,the term non-refundable earned 
income tax credit means1 with respect to
 any ,state1 a credit against the income
 tax imposed by such ,state which the   
,secretary has determined is based on   
the earned income of the taxpayer and   
which is limited to the tax liability of
 such taxpayer4  7,b7 ,treatment of     
certain credit modifications ,a credit  
shall not be treated as a non-refundable
 earned income tax credit for any       
taxable year if the ,secretary          
determines that such credit as in effect
 for such taxable year has been modified
 7relative to such credit as in effect  
on the date of the enactment of this    
,act7 in a manner which suggests that a 
significant purpose of such modification

 was to increase the amount of payments 
made under this section4  7,c7          
,treatment of credits scheduled to      
terminate ,a credit shall not be treated
 as non-refundable earned income tax    
credit for any taxable year if such     
credit was not scheduled to be in effect
 for such taxable year under the income 
tax laws of the ,state as in effect on  
the date of the enactment of this ,act4 
7c7 ,state refundable earned income tax 
credit equivalency amount ,for purposes 
of this section1 the term ,state        
refundable earned income tax credit     
equivalency amount means1 with respect  
to any individual for any taxable year1 
the amount determined by the ,secretary 
as being the excess 7if any7 of-- 7#a7  
the amount of the non-refundable earned 
income tax credit which would have been 
allowed to such individual for such     
taxable year if such credit were not    
limited based on the tax liability of   
the taxpayer1 over  7#b7 the amount by  
which such individual's ,state income   

tax liability would increase if such    
credit were not allowed 7determined     
after taking into account all other     
income tax credits other than income tax
 credits which constitute credits for   
the payment of tax74  7d7 ,payments     
treated in same manner as refundable    
income tax credits ,except as otherwise 
provided by the ,secretary1 the program 
established under subsection 7a7 shall  
effectuate the payments described       
therein by deeming the amount of such   
payment as a payment of ,federal income 
tax for purposes of the ,internal       
,revenue ,code of #aihf4 ,any           
overpayment of tax attributable to such 
deemed payment shall be refunded by the 
,secretary as soon as practicable4 ,for 
purposes of section #acbd of title #ca1 
,united ,states ,code1 any such refund  
shall be treated in the same manner as a
 refund due from a credit provision     
referred to in subsection 7b77#b7 of    
such section4  7e7 ,secretary ,for      
purposes of this section1 the term      

,secretary means the ,secretary of the  
,treasury or the ,secretary's delegate4 
#e4 ,establishment of refundable child  
tax credit with monthly advance payment 
7a7 ,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 #bd  
the following new sections3  #bd;,a4    
,monthly child tax credit  7a7          
,allowance of credit ,there shall be    
allowed as a credit against the tax     
imposed by this chapter for the taxable 
year the sum of the monthly specified   
child allowances determined with respect
 to the taxpayer under subsection 7b7   
for each calendar month during such     
taxable year4  7b7 ,monthly specified   
child allowance  7#a7 ,in general ,for  
purposes of this section1 the term      
monthly specified child allowance means1
 with respect to any taxpayer for any   
calendar month1 the sum of-- 7,a7 #cjj1 
with respect to each specified child of 
such taxpayer who will 7as of the close 

of such month7 have attained age #f1    
plus  7,b7 #cej1 with respect to each   
specified child of such taxpayer who    
will not 7as of the close of such month7
 have attained age #f4  7#b7            
,limitations based on modified adjusted 
gross income  7,a7 ,initial reduction   
,the monthly specified child allowance  
otherwise determined under paragraph    
7#a7 with respect to any taxpayer for   
any calendar month shall be reduced 7but
 not below zero7 by #a_/ab of #e percent
 of the excess 7if any7 of the          
taxpayer's modified adjusted gross      
income for the applicable taxable year  
over the initial threshold amount in    
effect for such applicable taxable year4
  7,b7 ,limitation on initial reduction 
,in the case of any calendar month      
beginning before ,january #a1 #bjbf1 the
 amount of the reduction under          
subparagraph 7,a7 shall not exceed the  
lesser of-- 7i7 the excess 7if any7 of--
 7,i7 the monthly specified child       
allowance with respect to the taxpayer  

for such calendar month 7determined     
without regard to this paragraph71 over 
7,,ii7 the amount which would be        
determined under subclause 7,i7 if the  
dollar amounts in effect under          
subparagraphs 7,a7 and 7,b7 of paragraph
 7#a7 were each equal to #aff4fg1 or    
7ii7 #a_/ab of #e percent of the excess 
of the secondary threshold amount over  
the initial threshold amount4  7,c7     
,secondary reduction ,in the case of any
 calendar month beginning before        
,january #a1 #bjbf1 the monthly         
specified child allowance otherwise     
determined under paragraph 7#a7 with    
respect to any taxpayer for such        
calendar month 7determined after the    
application of subparagraphs 7,a7 and   
7,b77 shall be reduced 7but not below   
zero7 by #a_/ab of #e percent of the    
excess 7if any7 of the taxpayer's       
modified adjusted gross income for the  
applicable taxable year over the        
secondary threshold amount4  7,d7       
,definitions related to limitations     

based on modified adjusted gross income 
,for purposes of this paragraph-- 7i7   
,initial threshold amount ,the term     
initial threshold amount means-- 7,i7   
#aej1jjj1 in the case of a joint return 
or surviving spouse 7as defined in      
section #b7;a771  7,,ii7 #a_/b the      
dollar amount in effect under subclause 
7,i71 in the case of a married          
individual filing a separate return1 and
  7,,iii7 #aab1ejj1 in any other case4  
7ii7 ,secondary threshold amount ,the   
term secondary threshold amount means-- 
7,i7 #djj1jjj1 in the case of a joint   
return or surviving spouse 7as defined  
in section #b7;a771  7,,ii7 #cjj1jjj1 in
 the case of a head of household 7as    
defined in section #b7;b771 and  7,,iii7
 #bjj1jjj1 in any other case4  7iii7    
,applicable taxable year ,the term      
applicable taxable year means1 with     
respect to any taxable year for which   
the credit under this section is        
determined-- 7,i7 such taxable year1 or 
7,,ii7 if the taxpayer elects the       

application of this subclause 7at such  
time and in such form and manner as the 
,secretary may provide71 the preceding  
taxable year or the second preceding    
taxable year 7as specified in such      
election74  7iv7 ,modified adjusted     
gross income ,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#c7 ,inflation         
adjustments  7,a7 ,monthly specified    
child allowance ,in the case of any     
month beginning after ,december #ca1    
#bjbe1 each dollar amount in paragraph  
7#a7 shall be increased by an amount    
equal to-- 7i7 such dollar amount1      
multiplied by--  7ii7 the percentage 7if
 any7 by which-- 7,i7 the ,,cpi 7as     
defined in section #a7;f77#d77 for the  
calendar year preceding the calendar    
year in which such month begins1 exceeds
  7,,ii7 the ,,cpi 7as so defined7 for  
calendar year #bjbj4  7,b7 ,initial     
threshold amount ,in the case of any    

taxable year beginning after ,december  
#ca1 #bjbe1 the dollar amounts in       
subclauses 7,i7 and 7,,iii7 of paragraph
 7#b77;,d77i7 shall each be increased by
 an amount equal to-- 7i7 such dollar   
amount1 multiplied by  7ii7 the         
percentage 7if any7 which would be      
determined under subparagraph 7,a77ii7  
if subclause 7,,ii7 thereof were applied
 by substituting #bjbb for #bjbj4  7,c7 
,rounding  7i7 ,monthly specified child 
allowance ,any increase under           
subparagraph 7,a7 which is not a        
multiple of #aj shall be rounded to the 
nearest multiple of #aj4  7ii7 ,initial 
threshold amount ,any increase under    
subparagraph 7,b7 which is not a        
multiple of #e1jjj shall be rounded to  
the nearest multiple of #e1jjj4  7c7    
,specified child ,for purposes of this  
section-- 7#a7 ,in general ,the term    
specified child means1 with respect to  
any taxpayer for any calendar month1 an 
individual-- 7,a7 who has the same      
principal place of abode as the taxpayer

 for more than one-half of such month1  
7,b7 who is younger than the taxpayer   
and will not1 as of the close of such   
month1 have attained age #ah1  7,c7 who 
receives care from the taxpayer during  
such month that is not compensated1     
7,d7 who is not the spouse of the       
taxpayer at any time during such month1 
and  7,e7 who either-- 7i7 is a citizen1
 national1 or resident of the ,united   
,states1 or  7ii7 if the taxpayer is a  
citizen or national of the ,united      
,states1 such individual is described in
 section #aeb7;f77#a77;,b7 with respect 
to such taxpayer4  7#b7 ,certain        
individuals ineligible ,in the case of  
an individual who is a specified child  
with respect to another taxpayer for any
 calendar month1 such individual shall  
be treated for such calendar month as   
having no specified children4  7#c7     
,care from the taxpayer  7,a7 ,in       
general ,except as otherwise provided by
 the ,secretary1 whether any individual 
receives care from the taxpayer 7within 

the meaning of paragraph 7#a77;,c77     
shall be determined on the basis of     
facts and circumstances with respect to 
the following factors3 7i7 ,the         
supervision provided by the taxpayer    
regarding the daily activities and needs
 of the individual4  7ii7 ,the          
maintenance by the taxpayer of a secure 
environment at which the individual     
resides4  7iii7 ,the provision or       
arrangement by the taxpayer of1 and     
transportation by the taxpayer to1      
medical care at regular intervals and as
 required for the individual4  7iv7 ,the
 involvement by the taxpayer in1 and    
financial and other support by the      
taxpayer for1 educational or similar    
activities of the individual4  7v7 ,any 
other factor that the ,secretary        
determines to be appropriate to         
determine whether the individual        
receives care from the taxpayer4  7,b7  
,determination of whether care is       
compensated ,for purposes of determining
 if care is compensated within the      

meaning of paragraph 7#a77;,c71         
compensation from the ,federal          
,government1 a ,state or local          
government1 a ,tribal government1 or any
 possession of the ,united ,states shall
 not be taken into account4  7#d7       
,application of tie-breaker rules  7,a7 
,in general ,except as provided in      
subparagraph 7,d71 if any individual    
would 7but for this paragraph7 be a     
specified child of #b or more taxpayers 
for any month1 such individual shall be 
treated as the specified child only of  
the taxpayer who is-- 7i7 the parent of 
the individual 7or1 if such individual  
would 7but for this paragraph7 be a     
specified child of #b or more parents of
 the individual for such month1 the     
parent of the individual determined     
under subparagraph 7,b771  7ii7 if the  
individual is not a specified child of  
any parent of the individual 7determined
 without regard to this paragraph71 the 
specified relative of the individual    
with the highest adjusted gross income  

for the taxable year which includes such
 month1 or  7iii7 if the individual is  
neither a specified child of any parent 
of the individual nor a specified child 
of any specified relative of the        
individual 7in both cases determined    
without regard to this paragraph71 the  
taxpayer with the highest adjusted gross
 income for the taxable year which      
includes such month4  7,b7 ,tie-breaker 
among parents ,if any individual would  
7but for this paragraph7 be the         
specified child of #b or more parents of
 the individual for any month1 such     
child shall be treated only as the      
specified child of-- 7i7 the parent with
 whom the child resided for the longest 
period of time during such month1 or    
7ii7 if the child resides with both     
parents for the same amount of time     
during such month1 the parent with the  
highest adjusted gross income for the   
taxable year which includes such month4 
7,c7 ,specified relative ,for purposes  
of this paragraph1 the term specified   

relative means an individual who is--   
7i7 an ancestor of a parent of the      
specified child1  7ii7 a brother or     
sister of a parent of the specified     
child1 or  7iii7 a brother1 sister1     
stepbrother1 or stepsister of the       
specified child4  7,d7 ,certain parents 
or specified relatives not taken into   
account ,this paragraph shall be applied
 without regard to any parent or        
specified relative of an individual for 
any month if-- 7i7 such parent or       
specified relative elects to have such  
individual not be treated as a specified
 child of such parent or specified      
relative for such month1  7ii7 in the   
case of a parent of such individual1 the
 adjusted gross income of the taxpayer  
7with respect to whom such individual   
would be treated as a specified child   
after application of this subparagraph7 
for the taxable year which includes such
 month is higher than the highest       
adjusted gross income of any parent of  
the individual for any taxable year     

which includes such month 7determined   
without regard to any parent with       
respect to whom such individual is not a
 specified child1 determined without    
regard to subparagraphs 7,a7 and 7,b7   
and after application of this           
subparagraph71 and  7iii7 in the case of
 a specified relative of such           
individual1 the adjusted gross income of
 the taxpayer 7with respect to whom such
 individual would be treated as a       
specified child after application of    
this subparagraph7 for the taxable year 
which includes such month is higher than
 the highest adjusted gross income of   
any parent and any specified relative of
 the individual for any taxable year    
which includes such month 7determined   
without regard to any parent and any    
specified relative with respect to whom 
such individual is not a specified      
child1 determined without regard to     
subparagraphs 7,a7 and 7,b7 and after   
application of this subparagraph74  7,e7
 ,treatment of joint returns ,for       

purposes of this paragraph1 with respect
 to any month1 the adjusted gross income
 of each person who files a joint return
 for the taxable year which includes    
such month is the total adjusted gross  
income shown on the joint return for the
 taxable year4  7,f7 ,parent ,except as 
otherwise provided by the ,secretary1   
the term parent shall have the same     
meaning as when used in section         
#aeb7;c77#d74  7#e7 ,treatment of       
temporary absences ,except as provided  
in regulations or other guidance issued 
by the ,secretary1 for purposes of this 
subsection-- 7,a7 ,in general ,in the   
case of any individual's temporary      
absence from such individual's principal
 place of abode1 each day composing the 
temporary absence shall-- 7i7 be treated
 as a day at such individual's principal
 place of abode1  7ii7 be treated as    
satisfying the care requirement         
described in paragraph 7#a77;,c7 for    
each day described in clause 7i71 and   
7iii7 not be treated as a day at any    

other location4  7,b7 ,temporary absence
 ,for purposes of subparagraph 7,a71 an 
absence shall be treated as temporary   
if-- 7i7 the individual would have      
resided at the place of abode but for   
the absence1 and  7ii7 under the facts  
and circumstances1 it is reasonable to  
assume that the individual will return  
to reside at the place of abode4  7#f7  
,special rule for divorced parents1 etc 
,rules similar to the rules section     
#aeb7;e7 shall apply for purposes of    
this subsection4  7#g7 ,eligibility     
determined on basis of presumptive      
eligibility  7,a7 ,in general ,if a     
period of presumptive eligibility is    
established under section #gebg;,b7c7   
for any individual with respect to any  
taxpayer-- 7i7 such individual shall be 
treated as the specified child of such  
taxpayer for any month in such period of
 presumptive eligibility1 and  7ii7 such
 individual shall not be treated as the 
specified child of any other taxpayer   
with respect to whom a period of        

presumptive eligibility has not been    
established for any such month4  7,b7   
,ability of credit claimants to         
establish presumptive eligibility       
,nothing in section #gebg;,b7c7 shall be
 interpreted to preclude a taxpayer from
 establishing a period of presumptive   
eligibility 7including any such period  
described in section                    
#gebg;,b7c77#b77;,d77 with respect to   
any specified child for purposes of this
 section solely because such taxpayer   
affirmatively elects not to receive     
monthly advance child payments under    
section #gebg;,b4  7d7 ,credit          
refundable ,if the taxpayer 7in the case
 of a joint return1 either spouse7 has a
 principal place of abode 7determined as
 provided in section #cb7 in the ,united
 ,states or ,puerto ,rico for more than 
one-half of any calendar month during   
the taxable year1 so much of the credit 
otherwise allowed under subsection 7a7  
as is attributable to monthly specified 
child allowances with respect to any    

such calendar month shall be allowed    
under subpart ,c 7and not allowed under 
this subpart74  7e7 ,identification     
requirements  7#a7 ,qualifying child    
identification requirement ,no credit   
shall be allowed under this section to a
 taxpayer with respect to any qualifying
 child unless the taxpayer includes the 
name and taxpayer identification number 
of such qualifying 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 taxpayer identification number of   
the taxpayer was issued after the due   
date for filing the return for the      
taxable year4  7f7 ,restrictions on     
taxpayers who improperly claimed credit 
or improperly received monthly advance  
child payment  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 7and no payment shall be   
made under section #gebg;,b for any     
month7 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 or section
 #bd 7or payment received under section 
#gebg;,a or #gebg;,b7 was due to fraud1 
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 or section #bd 7or   
payment received under section #gebg;,a 
or #gebg;,b7 was due to reckless or     
intentional disregard of rules and      
regulations 7but not due to fraud71 and 
7iii7 in addition to any period         
determined under clause 7i7 or 7ii7 7as 
the case may be71 the period beginning  

on the date of the final determination  
described in such clause and ending with
 the beginning of the period described  
in such clause4  7#b7 ,taxpayers making 
improper prior claims ,in the case of a 
taxpayer who is denied credit under this
 section or section #bd 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 7and no payment shall be   
made under section #gebg;,b for any     
subsequent month7 unless the taxpayer   
provides such information as the        
,secretary may require to demonstrate   
eligibility for such credit4  7#c7      
,coordination with possessions of the   
,united ,states ,for purposes of this   
subsection1 a taxpayer's claim of credit
 under this section or section #bd 7or  
payment received under section #gebg;,a 
or section #gebg;,b7 includes a claim of
 credit under this section or section   
#bd of the income tax law of any        

jurisdiction other than the ,united     
,states 7or similar payment received    
under section #gebg;,a or section       
#gebg;,b of such income tax law71 and a 
claim made or a payment received from   
,american ,samoa pursuant to a plan     
described in subsection 7i77#c77;,b7 or 
section #bd7k77#c77;,b74  7g7           
,reconciliation of credit and monthly   
advance child payments  7#a7 ,in general
 ,the amount otherwise determined under 
subsection 7a7 with respect to any      
taxpayer for any taxable year shall be  
reduced 7but not below zero7 by the     
aggregate amount of payments made under 
section #gebg;,b to such taxpayer for   
one or more calendar months in such     
taxable year4 ,any failure to so reduce 
the credit shall be treated as arising  
out of a mathematical or clerical error 
and assessed according to section       
#fbac7;b77#a74  7#b7 ,recapture of      
excess advance payments in certain      
circumstances ,in the case of a taxpayer
 described in paragraph 7#c7 for any    

taxable year1 the tax imposed by this   
chapter for such taxable year shall be  
increased by the excess 7if any7 of--   
7,a7 the aggregate amount of payments   
made to the taxpayer under section      
#gebg;,b for one or more calendar months
 in such taxable year1 over  7,b7 the   
amount determined under subsection 7a7  
with respect to the taxpayer for such   
taxable year 7without regard to         
paragraph 7#a7 of this subsection74     
7#c7 ,taxpayers subject to recapture    
7,a7 ,fraud or reckless or intentional  
disregard of rules and regulations ,a   
taxpayer is described in this paragraph 
with respect to any taxable year if the 
,secretary determines that the amount   
described in paragraph 7#b77;,a7 with   
respect to the taxpayer for such taxable
 year was determined on the basis of    
fraud or a reckless or intentional      
disregard of rules and regulations4     
7,b7 ,understatement of income2 changes 
in filing status ,if the amount         
described in paragraph 7#b77;,a7 with   

respect to the taxpayer for the taxable 
year was determined on the basis of an  
amount of the taxpayer's modified       
adjusted gross income which was less    
than the taxpayer's modified adjusted   
gross income for the applicable taxable 
year 7as defined in subsection 7b77--   
7i7 such taxpayer shall be treated as   
described in this paragraph1 and  7ii7  
the increase determined under paragraph 
7#b7 by reason of this subparagraph     
shall not exceed the excess of-- 7,i7   
the amount described in paragraph       
7#b77;,a71 over  7,,ii7 the amount which
 would be so described if the payments  
described therein had been determined on
 the basis of the taxpayer's modified   
adjusted gross income for the applicable
 taxable year 7as defined in subsection 
7b774  ,a rule similar to the rule of   
the preceding sentence shall apply if   
the amount described in paragraph       
7#b77;,a7 with respect to the taxpayer  
for the taxable year was determined on  
the basis of a filing status of the     

taxpayer which differs from the         
taxpayer's filing status for the        
applicable taxable year 7as so defined74
  7,c7 ,payments made outside of period 
of presumptive eligibility ,if any      
payment described in paragraph 7#b77;,a7
 with respect to the taxpayer for the   
taxable year was made with respect to a 
child for a month which was not part of 
a period of presumptive eligibility     
established under section #gebg;,b7c7   
for such child with respect to such     
taxpayer-- 7i7 such taxpayer shall be   
treated as described in this paragraph1 
and  7ii7 the increase determined under 
paragraph 7#b7 by reason of this        
subparagraph shall not exceed the       
portion of such payment so made4  7,d7  
,certain payments made after notice from
 ,secretary ,if the ,secretary notifies 
a taxpayer under section #gebg;,b7j77#b7
 that such taxpayer is subject to       
recapture with respect to any payments--
 7i7 such taxpayer shall be treated as  
described in this paragraph1 and  7ii7  

the increase determined under paragraph 
7#b7 by reason of this subparagraph     
shall not exceed the aggregate amount of
 such payments4  7,e7 ,taxpayers moving 
to another jurisdiction ,to minimize the
 amount of advance payments made under  
section #gebg;,b to ineligible          
individuals1 the ,secretary shall issue 
regulations or other guidance for       
purposes of this paragraph which apply  
with respect to taxpayers who are       
described in section #gebg;,b7b77#d7    
with respect to the reference month but 
are not so described with respect to one
 or more months during the taxable year 
for which advance payments under section
 #gebg;,b are made4  7,f7 ,other        
circumstances to prevent abuse ,a       
taxpayer is described in this paragraph 
with respect to any taxable year        
pursuant to regulations or other        
guidance of the ,secretary describing   
other recapture circumstances to        
facilitate the administration and       
enforcement by the ,secretary of section

 #gebg;,b to minimize the amount of     
advance payments made under section     
#gebg;,b to ineligible individuals and  
to prevent abuse4  7#d7 ,joint returns  
,except as otherwise provided by the    
,secretary1 in the case of an advance   
payment made under section #gebg;,b with
 respect to a joint return1 half of such
 payment shall be treated as having been
 made to each individual filing such    
return4  7#e7 ,coordination with        
possessions of the ,united ,states ,for 
purposes of this subsection1 payments   
made under section #gebg;,b include     
payments made by any jurisdiction other 
than the ,united ,states under section  
#gebg;,b of the income tax law of such  
jurisdiction1 and advance payments made 
by ,american ,samoa pursuant to a plan  
described in subsection 7h77#c77;,b74   
,any increase in tax imposed on a       
taxpayer by reason of paragraph 7#b7 of 
the income tax law of a jurisdiction    
other than the ,united ,states shall be 
considered to reduce the aggregate      

amount of payments made to such taxpayer
 by such jurisdiction4 ,in carrying out 
this section1 the ,secretary shall      
coordinate with each possession of the  
,united ,states to prevent any          
application of this paragraph that is   
inconsistent with the purposes of this  
subsection4  7h7 ,application of credit 
in possessions  7#a7 ,mirror code       
possessions  7,a7 ,in general ,the      
,secretary shall pay to each possession 
of the ,united ,states with a mirror    
code tax system amounts equal to the    
loss 7if any7 to that possession by     
reason of the application of this       
section 7determined without regard to   
this subsection7 with respect to taxable
 years beginning in calendar years after
 #bjbe4 ,such amounts shall be          
determined by the ,secretary based on   
information provided by the government  
of the respective possession4  7,b7     
,coordination with credit allowed       
against ,united ,states income taxes ,no
 credit shall be allowed under this     

section for any taxable year to any     
individual to whom a credit is allowable
 against taxes imposed by a possession  
of the ,united ,states with a mirror    
code tax system by reason of the        
application of this section in such     
possession for such taxable year4  7,c7 
,mirror code tax system ,for purposes of
 this paragraph1 the term mirror code   
tax system means1 with respect to any   
possession of the ,united ,states1 the  
income tax system of such possession if 
the income tax liability of the         
residents of such possession under such 
system is determined by reference to the
 income tax laws of the ,united ,states 
as if such possession were the ,united  
,states4  7#b7 ,cross references related
 to application of credit to residents  
of ,puerto ,rico  7,a7 ,for application 
of refundable credit to residents of    
,puerto ,rico1 see subsection 7d74  7,b7
 ,for application of advance payment to 
residents of ,puerto ,rico1 see section 
#gebg;,b7b77#d74  7#c7 ,american ,samoa 

7,a7 ,in general ,the ,secretary shall  
pay to ,american ,samoa amounts         
estimated by the ,secretary as being    
equal to the aggregate benefits that    
would have been provided to residents of
 ,american ,samoa by reason of the      
application of this section for taxable 
years beginning in calendar years after 
#bjbe if the provisions of this section 
had been in effect in ,american ,samoa  
7applied as if ,american ,samoa were the
 ,united ,states and without regard to  
the application of this section to      
residents of ,puerto ,rico under        
subsection 7d774  7,b7 ,distribution    
requirement ,subparagraph 7,a7 shall not
 apply unless ,american ,samoa has a    
plan1 which has been approved by the    
,secretary1 under which ,american ,samoa
 will promptly distribute such payments 
to its residents4  7,c7 ,coordination   
with credit allowed against ,united     
,states income taxes  7i7 ,in general   
,in the case of a taxable year with     
respect to which a plan is approved     

under subparagraph 7,b71 this section   
7other than this subsection7 shall not  
apply to any individual eligible for a  
distribution under such plan4  7ii7     
,application of section in event of     
absence of approved plan ,in the case of
 a taxable year with respect to which a 
plan is not approved under subparagraph 
7,b71 subsection 7d7 shall be applied by
 substituting 1 ,puerto ,rico1 or       
,american ,samoa for or ,puerto ,rico4  
7#d7 ,treatment of payments ,for        
purposes of section #acbd of title #ca1 
,united ,states ,code1 the payments     
under this subsection shall be treated  
in the same manner as a refund due from 
a credit provision referred to in       
subsection 7b77#b7 of such section4  7i7
 ,regulations ,the ,secretary shall     
issue such regulations or other guidance
 as the ,secretary determines necessary 
or appropriate to carry out the purposes
 of this section1 including regulations 
or other guidance-- 7#a7 for determining
 whether an individual receives care    

from a taxpayer for purposes of         
subsection 7c77#a71 and  7#b7 to        
coordinate or modify the application of 
this section and sections #bd1 #gebg;,a1
 and #gebg;,b in the case of any        
taxpayer-- 7,a7 whose taxable year is   
other than a calendar year1  7,b7 whose 
filing status for a taxable year is     
different from the status used for      
determining one or more monthly payments
 under section #gebg;,b during such     
taxable year1 or  7,c7 whose principal  
place of abode for any month is         
different from the principal place of   
abode used for determining the monthly  
payment under section #gebg;,b for such 
month4  #bd;,b4 ,credit for certain     
other dependents  7a7 ,in general ,there
 shall be allowed as a credit against   
the tax imposed by this chapter for the 
taxable year an amount equal to #ejj    
with respect to each specified dependent
 of such taxpayer for such taxable year4
  7b7 ,limitation based on modified     
adjusted gross income  7#a7 ,in general 

,the amount of the credit allowable     
under subsection 7a7 shall be reduced   
7but not below zero7 by #ej for each    
#a1jjj 7or fraction thereof7 by which   
the taxpayer's modified adjusted gross  
income exceeds the threshold amount4    
7#b7 ,threshold amount ,for purposes of 
this subsection1 the term threshold     
amount means-- 7,a7 #djj1jjj1 in the    
case of a joint return or surviving     
spouse 7as defined in section #b7;a771  
7,b7 #cjj1jjj1 in the case of a head of 
household 7as defined in section        
#b7;b771 and  7,c7 #bjj1jjj1 in any     
other case4  7#c7 ,modified adjusted    
gross income ,for purposes of this      
subsection1 the term modified adjusted  
gross income means adjusted gross income
 increased by any amount excluded from  
gross income under section #iaa1 #ica1  
or #icc4  7c7 ,specified dependent ,for 
purposes of this section1 the term      
specified dependent means1 with respect 
to any taxpayer for any taxable year1   
any dependent of such taxpayer for such 

taxable year unless such dependent--    
7#a7 is a specified child of the        
taxpayer1 or any other taxpayer1 for any
 month during such taxable year1 or     
7#b7 would not be a dependent if        
subparagraph 7,a7 of section            
#aeb7;b77#c7 were applied without regard
 to all that follows resident of the    
,united ,states4  7d7 ,identification   
requirements ,rules similar to the rules
 of section #bd;,a7e7 shall apply for   
purposes of this section4  7e7 ,taxable 
year must be full taxable year ,except  
in the case of a taxable year closed by 
reason of the death of the taxpayer1 no 
credit shall be allowable under this    
section in the case of a taxable year   
covering a period of less than #ab      
months4  7f7 ,regulations ,the          
,secretary shall issue such regulations 
or other guidance as the ,secretary     
determines necessary or appropriate to  
carry out the purposes of this section4 
4  7b7 ,monthly payment of child tax    
credit ,chapter #gg of such ,code is    

amended by inserting after section      
#gebg;,a the following new section3     
#gebg;,b4 ,monthly payments of child tax
 credit  7a7 ,in general ,the ,secretary
 shall establish a program for making   
payments to taxpayers with respect to   
each calendar month equal to the monthly
 advance child payment determined with  
respect to such taxpayer for such month4
  7b7 ,monthly advance child payment    
,for purposes of this section and except
 as otherwise provided in this section1 
the term monthly advance child payment  
means1 with respect to any taxpayer for 
any calendar month1 the amount 7if any7 
which is estimated by the ,secretary as 
being equal to the monthly specified    
child allowance which would be          
determined under section #bd;,a7b7 with 
respect to such taxpayer for such       
calendar month if-- 7#a7 unless         
determined by the ,secretary based on   
any information known to the ,secretary1
 the only specified children of such    
taxpayer for such calendar month are the

 specified children of such taxpayer for
 the reference month1  7#b7 unless      
determined by the ,secretary based on   
any information known to the ,secretary1
 the ages of such children 7and the     
status of such children as specified    
children7 are determined for such       
calendar month by taking into account   
the passage of time since such reference
 month1  7#c7 the limitations of section
 #bd;,a7b77#b7 were applied with respect
 to the reference taxable year rather   
than with respect to the applicable     
taxable year1 and  7#d7 unless          
determined by the ,secretary based on   
any information known to the ,secretary1
 no monthly specified child allowance   
were determined with respect to such    
taxpayer for such calendar month unless 
the taxpayer 7in the case of a joint    
return1 either spouse7 has a principal  
place of abode 7determined as provided  
in section #cb7 in the ,united ,states  
or ,puerto ,rico for more than one-half 
of the reference month4  7c7            

,presumptive eligibility  7#a7 ,in      
general ,an individual shall be treated 
as a specified child of a taxpayer for  
purposes of determining any monthly     
advance child payment under this section
 only if such month is part of the      
period of presumptive eligibility       
determined by the ,secretary under this 
subsection with respect to such         
specified child and such taxpayer       
7determined by treating the month       
described in subclause 7,i7 of paragraph
 7#b77;,a77ii7 as being the first month 
beginning after the determination       
described in such subclause74  7#b7     
,period of presumptive eligibility ,for 
purposes of this section-- 7,a7 ,in     
general ,except as otherwise provided by
 the ,secretary1 the term period of     
presumptive eligibility means the       
period-- 7i7 beginning with the month   
for which presumptive eligibility is    
established1 and  7ii7 ending with the  
earliest of-- 7,i7 the beginning of the 
month described in clause 7i7 if the    

,secretary determines that the taxpayer 
committed fraud or intentionally        
disregarded rules or regulations in     
establishing or maintaining presumptive 
eligibility1  7,,ii7 in the case of any 
notification from the ,secretary that   
the period of presumptive eligibility   
has been terminated or suspended by     
reason of any question regarding        
eligibility of the taxpayer for monthly 
advance child payments with respect to  
such child1 the month specified in such 
notice as the month on which such       
termination or suspension begins1 and   
7,,iii7 the month following any failure 
of the taxpayer to make the required    
annual renewal of presumptive           
eligibility by such date as the         
,secretary may provide4  7,b7           
,establishing presumptive eligibility ,a
 taxpayer shall establish presumptive   
eligibility with respect to any         
specified child for any month at such   
time and in such manner as the          
,secretary may provide4 ,except as      

otherwise provided by the ,secretary1 in
 order to establish a period of         
presumptive eligibility the taxpayer    
must express a reasonable expectation   
and intent that the taxpayer will       
continue to be eligible with respect to 
such specified child for at least the   
two months following the month for which
 presumptive eligibility is to be       
established4  7,c7 ,method of           
establishing presumptive eligibility    
,the ,secretary shall ensure information
 to establish presumptive eligibility   
under this paragraph may be provided on 
the return of tax for the taxable year  
ending before the calendar year which   
includes the month for which such       
eligibility is to be established1       
through the on-line portal described in 
subsection 7e71 or in such other manner 
as the ,secretary may provide4  7,d7    
,inclusion of automatic grace periods   
and periods of hardship ,the period of  
presumptive eligibility shall include   
any period to which paragraph 7#a7 or   

7#b7 of subsection 7g7 applies4  7,e7   
,automatic eligibility for birth of     
child ,the ,secretary shall issue       
regulations or other guidance to        
establish procedures pursuant to which1 
to the maximum extent administratively  
practicable-- 7i7 a parent of a child   
born during a calendar month shall be   
treated as automatically establishing   
presumptive eligibility with respect to 
such child1  7ii7 the period of such    
automatic presumptive eligibility is    
determined1 and  7iii7 the first monthly
 advance child payment with respect to  
such child is increased to properly take
 into account the months in the period  
of such automatic presumptive           
eligibility which precede such payment4 
7,f7 ,presumptive eligibility based on  
certain government programs ,the        
,secretary shall issue regulations or   
other guidance to establish procedures  
under which-- 7i7 based on information  
provided to the ,secretary by one or    
more government entities1 a parent or   

specified relative of a child is treated
 as automatically establishing          
presumptive eligibility with respect to 
such child1 and  7ii7 the period for    
which such automatic presumptive        
eligibility is determined 7including any
 additional circumstances under which   
such period will terminate74  7,g7      
,coordination with presumption ,for     
purposes of determining the status of   
any individual as a specified child for 
purposes of determining presumptive     
eligibility with respect to any period1 
section #bd;,a7c7 shall be applied      
without regard to paragraph 7#g7        
thereof4  7#c7 ,notice of termination of
 presumptive eligibility by reason of   
failure to make annual renewal ,if a    
taxpayer's period of presumptive        
eligibility with respect to any         
specified child terminates by reason of 
paragraph 7#b77;,a77ii77,,iii71 the     
,secretary shall provide the taxpayer a 
written notice of such termination4  7d7
 ,determination of reference month and  

reference taxable year ,for purposes of 
this section-- 7#a7 ,reference month    
,the term reference month means1 with   
respect to any taxpayer for any calendar
 month1 the most recent of-- 7,a7 in the
 case of a taxpayer who filed a return  
of tax for the last taxable year ending 
before such calendar month1 the last    
month of such taxable year1  7,b7 in the
 case of a taxpayer who filed a return  
of tax for the taxable year preceding   
the taxable year described in           
subparagraph 7,a71 the last month of    
such preceding taxable year1 and  7,c7  
in the case of a taxpayer who provides1 
through a specified alternative         
mechanism1 information which is         
sufficient to estimate the taxpayer's   
monthly advance child payment for such  
month4  7#b7 ,reference taxable year    
,the term reference taxable year means1 
with respect to any taxpayer for any    
calendar month1 the most recent of--    
7,a7 the taxable year described in      
subparagraph 7,a7 or 7,b7 of paragraph  

7#a71 or  7,b7 in the case of a taxpayer
 who provides1 through a specified      
alternative mechanism1 information which
 is sufficient to estimate the          
taxpayer's modified adjusted gross      
income for the taxable year which       
includes such month1 such taxable year4 
7#c7 ,availability of information ,any  
month or year referred to in            
subparagraph 7,a71 7,b71 or 7,c7 of     
paragraph 7#a7 or subparagraph 7,a7 or  
7,b7 of paragraph 7#b7 shall not be     
taken into account in determining the   
reference month or reference taxable    
year with respect to any calendar month 
unless all relevant information with    
respect to such month or year is        
available to the ,secretary and the     
,secretary has adequate time to make    
estimates under this section on the     
basis of such information before the    
beginning of such calendar month4  7#d7 
,treatment of insufficient information  
,except as otherwise provided by the    
,secretary-- 7,a7 if a taxpayer is not  

described in subparagraph 7,a71 7,b71 or
 7,c7 of paragraph 7#a7 with respect to 
any calendar month1 the monthly advance 
child payment with respect to such      
taxpayer for such calendar month shall  
be treated as zero unless the ,secretary
 determines that the ,secretary can make
 the estimate described in subsection   
7b7 on the basis of information known to
 the ,secretary which the ,secretary    
determines is reasonably reliable1 and  
7,b7 if the taxpayer is not described in
 paragraph 7#a77;,c7 and the information
 on the return of tax referred to in    
subparagraph 7,a7 or 7,b7 of paragraph  
7#a7 does not establish the status of   
the taxpayer 7in the case of a joint    
return1 either spouse7 as having a      
principal place of abode 7determined as 
provided in section #cb7 in the ,united 
,states or ,puerto ,rico for more than  
one-half of the reference month1 the    
,secretary shall determine such status  
based on information known to the       
,secretary4  7#e7 ,transition rule ,in  

any case with respect to which section  
#bd;,a was not in effect for the taxable
 year described in subparagraph 7,a71   
7,b71 or 7,c7 of paragraph 7#a7         
7whichever is applicable71 subsection   
7b77#a7 shall be applied by substituting
 the qualifying children of such        
taxpayer for the taxable year which     
includes the reference month for the    
specified children of such taxpayer for 
the reference month4  7e7 ,on-,line     
information portal2 specified           
alternative mechanisms  7#a7 ,on-line   
information portal ,the ,secretary shall
 establish an on-line portal which      
allows taxpayers to-- 7,a7 subject to   
such restrictions as the ,secretary may 
provide1 elect to begin or cease        
receiving payments under this section1  
and  7,b7 provide information to the    
,secretary which is relevant in         
determining the monthly advance child   
payment and the taxpayer's eligibility  
for such payment1 including information 
regarding-- 7i7 the number of the       

taxpayer's specified children1 including
 by reason of the birth of a child1     
7ii7 the taxpayer's marital status1     
7iii7 the taxpayer's modified adjusted  
gross income1  7iv7 the taxpayer's      
principal place of abode1 and  7v7 any  
other factor which the ,secretary may   
provide4  7#b7 ,specified alternative   
mechanism ,for purposes of this section1
 the term specified alternative         
mechanism means the on-line portal      
established under paragraph 7#a71 the   
on-line portal established under section
 #gebg;,a1 and any other mechanism or   
method established by the ,secretary to 
allow taxpayers to provide the          
information described in paragraph 7#a7 
7including in connection with the filing
 of any return of tax74  7#c7           
,availability in multiple languages ,the
 ,secretary shall ensure that the       
on-line portal described in paragraph   
7#a7 is available in multiple languages4
  7f7 ,specified child of more than #a  
taxpayer  7#a7 ,in general ,in the event

 that 7without regard to this paragraph7
 a period of presumptive eligibility    
with respect to the same specified child
 would exist for more than #a taxpayer  
at the same time-- 7,a7 except as       
otherwise provided in this section or by
 the ,secretary1 a period of presumptive
 eligibility shall exist only respect to
 the taxpayer with the most recent      
reference month1  7,b7 the ,secretary   
shall establish procedures under which  
the ,secretary expeditiously adjudicates
 taxpayers' competing claims of         
presumptive eligibility with respect to 
the same child1 and  7,c7 the ,secretary
 shall notify any taxpayer of the       
termination of a period of presumptive  
eligibility pursuant to this subsection4
  7#b7 ,provisions related to           
adjudication  7,a7 ,expedited process2  
appeals ,the procedures established     
under paragraph 7#a77;,b7 shall         
include-- 7i7 an expedited process for  
taxpayers who meet such requirements as 
the ,secretary may establish for such   

expedited process1 and  7ii7 procedures 
for adjudicating an appeal of an adverse
 decision4  7,b7 ,information receipt   
and coordination ,the ,secretary may    
enter into agreements to receive        
information from1 and otherwise         
coordinate with-- 7i7 ,federal agencies 
7including the ,social ,security        
,administration and the ,department of  
,agriculture71  7ii7 any ,state1 local  
government1 ,tribal government1 or      
possession of the ,united ,states1 and  
7iii7 any other individual or entity    
that the ,secretary determines to be    
appropriate for purposes of adjudicating
 a competing claim described in         
paragraph 7#a74  7,c7 ,adjudication not 
treated as assessment ,an adjudication  
under the procedures established under  
paragraph 7#a77;,b7 7including the      
adjudication of any appeal7 shall not be
 treated as an assessment described in  
section #fbja4  7,d7 ,adjudication not  
treated as inspection of taxpayer's     
books of account ,the inspection of a   

taxpayer's books of account in          
connection with any adjudication under  
the procedures established under        
paragraph 7#a77;,b7 7including the      
adjudication of any appeal7 shall not be
 treated as an examination or inspection
 of a taxpayer's books of account for   
purposes of section #gfje7;b74  7#c7    
,retroactive payments ,if1 pursuant to  
the procedures established under        
paragraph 7#a77;,b71 the ,secretary     
determines that a child is a specified  
child of a taxpayer and the ,secretary  
did not make payments to such taxpayer  
with respect to such child for any      
portion of the period during which the  
determination was made1 the ,secretary  
may make a one-time payment to the      
taxpayer with respect to which such     
child is the specified child in an      
amount equal to the aggregate amount by 
which the monthly advance child payments
 to such taxpayer would have increased  
during such period if such determination
 had been made immediately4  7#d7       

,recapture of payments ,if1 pursuant to 
the procedures established under        
paragraph 7#a77;,b71 the ,secretary     
makes payments with respect to the child
 during the period during which the     
determination is made-- 7,a7 the        
,secretary shall provide each taxpayer  
which receives such payments notice that
 such payments may be subject to        
recapture1 and  7,b7 upon making such   
determination1 the ,secretary shall     
determine on the basis of the facts and 
circumstances of each such taxpayer     
whether any such payments should be     
subject to recapture and shall so notify
 each such taxpayer4  7g7 ,rules related
 to grace periods and hardships  7#a7   
,automatic grace period  7,a7 ,in       
general ,notwithstanding subsection 7f71
 in the case of any failure or delay in 
establishing a period of presumptive    
eligibility with respect to which the   
taxpayer elects the application of this 
subparagraph1 credit under section      
#bd;,a or retroactive payment under this

 section 7similar to the payment        
described in subsection 7f77#c77 shall  
be allowed or made with respect to so   
much of the period of such failure or   
delay as does not exceed #c months4 ,the
 preceding sentence shall not apply if  
the ,secretary determines that such     
failure or delay was due to fraud or    
reckless or intentional disregard of    
rules and regulations4  7,b7 ,limitation
 ,subparagraph 7,a7 shall not apply with
 respect to any taxpayer more than once 
during any #cf-month period4  7#b7      
,hardship ,notwithstanding subsection   
7f71 if the ,secretary determines that a
 failure or delay in establishing a     
period of presumptive eligibility with  
respect to any specified child was due  
to domestic violence1 serious illness1  
natural disaster1 or any other hardship1
 credit under section #bd;,a or         
retroactive payment under this section  
7similar to the payment described in    
subsection 7f77#c77 shall be allowed or 
made with respect to so much of the     

period of such failure or delay as does 
not exceed #f months4  7h7 ,provisions  
related to form1 manner1 and treatment  
of payments  7#a7 ,application of       
electronic funds payment requirement    
,the payments made by the ,secretary    
under subsection 7a7 shall be made by   
electronic funds transfer to the same   
extent and in the same manner as if such
 payments were ,federal payments not    
made under this title4  7#b7 ,delivery  
of payments ,notwithstanding any other  
provision of law1 the ,secretary may    
certify and disburse refunds payable    
under this section electronically to--  
7,a7 any account to which the payee     
authorized1 on or after ,january #a1    
#bjbe1 the delivery of a refund of taxes
 under this title or of a ,federal      
payment 7as defined in section #cccb of 
title #ca1 ,united ,states ,code71  7,b7
 any account belonging to a payee from  
which that individual1 on or after      
,january #a1 #bjbe1 made a payment of   
taxes under this title1 or  7,c7 any    

,treasury-sponsored account 7as defined 
in section #bjh4b of title #ca1 ,code of
 ,federal ,regulations74  7#c7 ,waiver  
of certain rules ,notwithstanding       
section #ccbe of title #ca1 ,united     
,states ,code1 or any other provision of
 law1 with respect to any payment of a  
refund under this section1 a disbursing 
official in the executive branch of the 
,united ,states ,government may modify  
payment information received from an    
officer or employee described in section
 #ccbe7;a77#a77;,b7 of such title for   
the purpose of facilitating the accurate
 and efficient delivery of such payment4
 ,except in cases of fraud or reckless  
neglect1 no liability under section     
#ccbe1 #cebg1 #cebh1 or #cebi of title  
#ca1 ,united ,states ,code1 shall be    
imposed with respect to payments made   
under this paragraph4  7#d7 ,exception  
from reduction or offset ,any applicable
 payment 7as defined in paragraph       
7#e77;,e77iii77 shall not be-- 7,a7     
subject to reduction or offset pursuant 

to section #cgaf or #cgbj;,a of title   
#ca1 ,united ,states ,code1  7,b7       
subject to reduction or offset pursuant 
to subsection 7c71 7d71 7e71 or 7f7 of  
section #fdjb1 or  7,c7 reduced or      
offset by other assessed ,federal taxes 
that would otherwise be subject to levy 
or collection4  7#e7 ,assignment of     
benefits  7,a7 ,in general ,the right of
 any person to any applicable payment   
shall not be transferable or assignable1
 at law or in equity1 and no applicable 
payment shall be subject to1 execution1 
levy1 attachment1 garnishment1 or other 
legal process1 or the operation of any  
bankruptcy or insolvency law4  7,b7     
,encoding of payments ,in the case of an
 applicable payment described in        
subparagraph 7,e77iii77,i7 that is paid 
electronically by direct deposit through
 the ,automated ,clearing ,house 7,,ach7
 network1 the ,secretary of the         
,treasury 7or the ,secretary's delegate7
 shall-- 7i7 issue the payment using a  
unique identifier that is reasonably    

sufficient to allow a financial         
institution to identify the payment as  
an applicable payment1 and  7ii7 further
 encode the payment pursuant to the same
 specifications as required for a       
benefit payment defined in section      
#bab4c of title #ca1 ,code of ,federal  
,regulations4  7,c7 ,garnishment  7i7   
,encoded payments ,in the case of a     
garnishment order that applies to an    
account that has received an applicable 
payment that is encoded as provided in  
subparagraph 7,b71 a financial          
institution shall follow the            
requirements and procedures set forth in
 part #bab of title #ca1 ,code of       
,federal ,regulations1 except-- 7,i7    
notwithstanding section #bab4d of title 
#ca1 ,code of ,federal ,regulations 7and
 except as provided in subclause        
7,,ii771 a financial institution shall  
not fail to follow the procedures of    
sections #bab4e and #bab4f of such title
 with respect to a garnishment order    
merely because such order has attached1 

or includes1 a notice of right to       
garnish federal benefits issued by a    
,state child support enforcement agency1
 and  7,,ii7 a financial institution    
shall not1 with regard to any applicable
 payment1 be required to provide the    
notice referenced in sections #bab4f and
 #bab4g of title #ca1 ,code of ,federal 
,regulations4  7ii7 ,other payments ,in 
the case of a garnishment order 7other  
than an order that has been served by   
the ,united ,states7 that has been      
received by a financial institution and 
that applies to an account into which an
 applicable payment that has not been   
encoded as provided in subparagraph 7,b7
 has been deposited electronically on   
any date during the lookback period or  
into which an applicable payment that   
has been deposited by check on any date 
in the lookback period1 the financial   
institution1 upon the request of the    
account holder1 shall treat the amount  
of the funds in the account at the time 
of the request1 up to the amount of the 

applicable payment 7in addition to any  
amounts otherwise protected under part  
#bab of title #ca1 ,code of ,federal    
,regulations71 as exempt from a         
garnishment order without requiring the 
consent of the party serving the        
garnishment order or the judgment       
creditor4  7iii7 ,liability ,a financial
 institution that acts in good faith in 
reliance on clauses 7i7 or 7ii7 shall   
not be subject to liability or          
regulatory action under any ,federal or 
,state law1 regulation1 court or other  
order1 or regulatory interpretation for 
actions concerning any applicable       
payments4  7,d7 ,no reclamation rights  
,this paragraph shall not alter the     
status of applicable payments as tax    
refunds or other nonbenefit payments for
 purpose of any reclamation rights of   
the ,department of the ,treasury or the 
,internal ,revenue ,service as per part 
#baj of title #ca1 ,code of ,federal    
,regulations4  7,e7 ,definitions ,for   
purposes of this paragraph-- 7i7        

,account holder ,the term account holder
 means a natural person whose name      
appears in a financial institution's    
records as the direct or beneficial     
owner of an account4  7ii7 ,account     
review ,the term account review means   
the process of examining deposits in an 
account to determine if an applicable   
payment has been deposited into the     
account during the lookback period4 ,the
 financial institution shall perform the
 account review following the procedures
 outlined in section #bab4e of title    
#ca1 ,code of ,federal ,regulations and 
in accordance with the requirements of  
section #bab4f of title #ca1 ,code of   
,federal ,regulations4  7iii7           
,applicable payment ,the term applicable
 payment means-- 7,i7 any payment made  
to an individual under this section     
7other than any payment made pursuant to
 paragraph 7#f771  7,,ii7 any advance   
payment made by a possession of the     
,united ,states with a mirror code tax  
system 7as defined in section #bd7;h77  

pursuant to an election under paragraph 
7#f77;,b7 which corresponds to a payment
 described in subclause 7,i71 and       
7,,iii7 any advance payment made by     
,american ,samoa pursuant to a program  
for making such payments which is       
described in paragraph 7#f77;,c77ii74   
7iv7 ,garnishment ,the term garnishment 
means execution1 levy1 attachment1      
garnishment1 or other legal process4    
7v7 ,garnishment order ,the term        
garnishment order means a writ1 order1  
notice1 summons1 judgment1 levy1 or     
similar written instruction issued by a 
court1 a ,state or ,state agency1 a     
municipality or municipal corporation1  
or a ,state child support enforcement   
agency1 including a lien arising by     
operation of law for overdue child      
support or an order to freeze the assets
 in an account1 to effect a garnishment 
against a debtor4  7vi7 ,lookback period
 ,the term lookback period means the    
two-month period that begins on the date
 preceding the date of account review   

and ends on the corresponding date of   
the month two months earlier1 or on the 
last date of the month two months       
earlier if the corresponding date does  
not exist4  7#f7 ,application of advance
 payments in the possessions of the     
united states  7,a7 ,puerto ,rico  7i7  
,for application of child tax credit to 
residents of ,puerto ,rico1 see section 
#bd;,a7d74  7ii7 ,for application of    
monthly advance child payments to       
residents of ,puerto ,rico1 see         
subsection 7b77#d74  7,b7 ,mirror code  
possessions ,in the case of any         
possession of the ,united ,states with a
 mirror code tax system 7as defined in  
section #bd;,a7h77#a77;,c771 this       
section shall not be treated as part of 
the income tax laws of the ,united      
,states for purposes of determining the 
income tax law of such possession unless
 such possession elects to have this    
section be so treated4  7,c7            
,administrative expenses of advance     
payments  7i7 ,mirror code possessions  

,in the case of any possession described
 in subparagraph 7,b7 which makes the   
election described in such subparagraph1
 the amount otherwise paid by the       
,secretary to such possession under     
section #bd;,a7h77#a77;,a7 with respect 
to taxable years beginning in #bjbf1    
#bjbg1 and #bjbh shall each be increased
 by #cjj1jjj if such possession has a   
plan1 which has been approved by the    
,secretary1 for making monthly advance  
child payments consistent with such     
election4  7ii7 ,american ,samoa ,the   
amount otherwise paid by the ,secretary 
to ,american ,samoa under subparagraph  
7,a7 of section #bd;,a7h77#c7 with      
respect to taxable years beginning in   
#bjbf1 #bjbg1 and #bjbh shall each be   
increased by #cjj1jjj if the plan       
described in subparagraph 7,b7 of such  
section includes a program1 which has   
been approved by the ,secretary1 for    
making monthly advance child payments   
under rules similar to the rules of this
 section4  7iii7 ,timing of payment ,the

 ,secretary may pay1 upon the request of
 the possession of the ,united ,states  
to which the payment is to be made1 the 
amount of the increase determined under 
clause 7i7 or 7ii71 respectively1       
immediately upon approval of the plan   
with respect to which such payment      
relates4  7i7 ,application of certain   
definitions and rules applicable to     
child tax credit  7#a7 ,definitions     
,except as otherwise provided in this   
section1 terms used in this section     
which are also used in section #bd;,a   
shall have the same respective meanings 
as when used in section #bd;,a4  7#b7   
,treatment of certain deaths ,a child   
shall not be taken into account in      
determining the monthly advance child   
payment for any calendar month if the   
death of such child before the end of   
such month is known to the ,secretary as
 of date on which the ,secretary        
estimates such payment4  7#c7           
,identification requirements ,rules     
similar to the rules which apply under  

section #bd;,a7e7 shall apply for       
purposes of this section except that    
such rules shall apply with respect to  
the return of tax for the reference     
taxable year or1 in the case of         
information provided through a specified
 alternative mechanism1 with respect to 
the information provided through such   
mechanism4  7#d7 ,restrictions on       
taxpayers who improperly claimed credit 
or received monthly advance child       
payments ,for restrictions on taxpayers 
who improperly claimed credit or        
received monthly advance child payments1
 see section #bd;,a7f74  7j7 ,notice of 
,payments  7#a7 ,in general ,not later  
than ,january #ca of the calendar year  
following any calendar year during which
 the ,secretary makes one or more       
payments to any taxpayer under this     
section1 the ,secretary shall provide   
such taxpayer with a written notice     
which includes-- 7,a7 the taxpayer's    
taxpayer identity 7as defined in section
 #fajc7;b77#f771  7,b7 the aggregate    

amount of such payments made to such    
taxpayer during such calendar year1 and 
7,c7 such other information as the      
,secretary determines appropriate4  7#b7
 ,certain payments subject to recapture 
,in the case of any payments made to a  
taxpayer which the ,secretary has       
determined are subject to recapture1 the
 notice provided under paragraph 7#a7 to
 such taxpayer shall include the amount 
of such payments4  7k7 ,notification of 
certain events ,with respect to any     
taxpayer receiving monthly advance child
 payments under this section with       
respect to any specified child1 the     
,secretary shall1 to the maximum extent 
practicable1 provide reasonable advance 
notice of each of the following3 7#a7   
,any month with respect to which such   
monthly advance child payment will      
increase 7relative to the preceding     
month7 by reason of an inflation        
adjustment under section                
#bd;,a7b77#c77;,a74  7#b7 ,any month    
with respect to which such monthly      

advance child payment will be reduced   
7relative to the preceding month7 by    
reason of such child ceasing to be a    
specified child by reason of attaining  
age #ah4  7#c7 ,in the case of a        
taxpayer with a specified child         
described in section #bd;,a7b77#a77;,a71
 any month with respect to which such   
monthly advance child payment will be   
reduced by reason of such child         
attaining age #f4  7l7 ,regulations ,the
 ,secretary shall issue such regulations
 or other guidance as the ,secretary    
determines necessary or appropriate to  
carry out the purposes of this section4 
4  7c7 ,termination of annual child tax 
credit ,section #bd of such ,code is    
amended by adding at the end the        
following new subsection3  7l7          
,termination ,this section shall not    
apply to 7and no payment shall be made  
under subsection 7k7 with respect to7   
any taxable year beginning after        
,december #ca1 #bjbe4  4  7d7           
,disclosure of information relating to  

advance payment of child tax credit     
,section #fajc7;e7 of such ,code is     
amended by adding at the end the        
following new paragraph3  7#ab7         
,disclosure of information relating to  
advance payment of child tax credit     
7,a7 ,joint filers ,in the case of an   
individual to whom the ,secretary makes 
payments under section #gebg;,a or who  
is eligible for monthly advance child   
payments under section #gebg;,b1 if the 
reference taxable year 7as defined in   
section #gebg;,a7b77#b7 or              
#gebg;,b7d77#b71 as the case may be7    
that the ,secretary uses to calculate   
such payments is a year for which the   
individual filed an income tax return   
jointly with another individual1 the    
,secretary may disclose to such         
individual any information which is     
relevant in determining the payment     
under section #gebg;,a1 or the monthly  
advance child payment under section     
#gebg;,b1 and the individual's          
eligibility for such payment1 including 

information regarding any of the        
following3 7i7 ,the number of specified 
children1 including by reason of the    
birth of a child4  7ii7 ,the name and   
,,tin of specified children4  7iii7     
,marital status4  7iv7 ,modified        
adjusted gross income4  7v7 ,principal  
place of abode4  7vi7 ,any other factor 
which the ,secretary may provide        
pursuant to section #gebg;,a7c7 or      
#gebg;,b7e74  7,b7 ,competing claimants 
,in the case of an individual who has a 
competing claim of presumptive          
eligibility with respect to a specified 
child under section #gebg;,b7f77#a71 the
 ,secretary may disclose to such        
individual return information provided  
by another individual who has a         
competing claim of presumptive          
eligibility with respect to the same    
specified child in the course of the    
,secretary's adjudication of that       
competing claim1 as well as any other   
information considered by the ,secretary
 with respect to that competing claim4  

,such information shall be limited to   
the items specified in subparagraph 7,a7
 and the following3 7i7 ,information    
received under any agreements or        
coordination the ,secretary entered into
 with-- 7,i7 any ,state1 local          
government1 ,tribal government1 or      
possession of the ,united ,states1 or   
7,,ii7 any other individual or entity   
that the ,secretary determines to be    
appropriate for purposes of adjudicating
 a competing claim4  7ii7 ,information  
considered by the ,secretary about where
 and with whom the specified child      
resided4  7iii7 ,information considered 
by the ,secretary about expenditures    
made by the claimants to the extent such
 payments relate to the competing claim4
  4  7e7 ,conforming amendments  7#a7   
,section #bf7;b77#b7 of such ,code is   
amended by striking and at the end of   
subparagraph 7,y71 by striking the      
period at the end of subparagraph 7,z7  
and inserting 1 and1 and by adding at   
the end the following new subparagraph3 

7,,aa7 section #bd;,a7g77#b7 7relating  
to recapture of certain monthly advance 
child payments74  4  7#b7 ,section      
#aeb7;f77#f77;,b77ii7 of such ,code is  
amended to read as follows3  7ii7 the   
credits under sections #bd1 #bd;,a1 and 
#bd;,b and the payments under sections  
#gebg;,a and #gebg;,b1  4  7#c7 ,section
 #cdjb7;f77#a77;,c7 of such ,code is    
amended by inserting or section #bd;,a  
7determined after application of        
subsection 7g7 thereof7 after section   
#bd 7determined after application of    
subsection 7j7 thereof74  7#d7 ,section 
#fajc7l77#ac77;,a77v7 of such ,code is  
amended by insert or section #bd;,a1 as 
the case may be after section #bd4  7#e7
 ,section #fbaa7;b77#d77;,a7 of such    
,code is amended by inserting #bd;,a by 
reason of subsection 7d7 thereof1 after 
#bd by reason of subsections 7d7 and    
7i77#a7 thereof14  7#f7 ,section        
#fbac7;g77#b77;,i7 of such ,code is     
amended by inserting or section         
#bd;,a7e7 7relating to monthly child tax

 credit7 after section #bd7;e7 7relating
 to child tax credit74  7#g7 ,section   
#fbac7;g77#b77,l7 of such ,code is      
amended by inserting #bd;,a1 after #bd14
  7#h7 ,section #fbac7;g77#b77,p7 of    
such ,code is amended-- 7,a7 by         
inserting or #bd;,a7f77#b7 after section
 #bd7;g77#b71  7,b7 by inserting or     
#bd;,a after under section #bd1 and     
7,c7 by striking subsection 7g77#a7     
thereof and inserting section           
#bd7;g77#a7 or section #bd;,a7f77#a71   
respectively4  7#i7 ,section            
#ffie7;g77#b7 of such ,code is amended  
by inserting #bd;,a1 after #bd14  7#aj7 
,paragraph 7#b7 of section #acbd7;b7 of 
title #ca1 ,united ,states ,code1 as    
amended by the preceding provisions of  
this ,act1 is amended-- 7,a7 by         
inserting #bd;,a1 after #bd11 and  7,b7 
by inserting #gebg;,b1 after #gebg;,a14 
7#aa7 ,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 #bd  
the following new items3  ,sec4 #bd;,a4 
,monthly child tax credit4,sec4 #bd;,b4 
,credit for certain other dependents4  4
  7#ab7 ,the table of sections for      
chapter #gg of such ,code is amended by 
inserting after the item relating to    
section #gebg;,a the following new item3
  ,sec4 #gebg;,b4 ,monthly payments of  
child tax credit4  4  7f7 ,effective    
dates  7#a7 ,in general ,except as      
otherwise provided in this subsection1  
the amendments made by this section     
shall apply to taxable years beginning  
after ,december #ca1 #bjbe4  7#b7       
,monthly advance child payments ,the    
amendments made by subsection 7b7 shall 
apply to calendar months beginning after
 ,december #ca1 #bjbe4  7#c7            
,information disclosure ,the amendment  
made by subsection 7d7 shall take effect
 on the date of the enactment of this   
,act4  #f4 ,capital gains rates not     
applicable to certain high income       
taxpayers  7a7 ,in general ,section     

#a7;h77#a7 of the ,internal ,revenue    
,code of #aihf is amended by inserting  
and the taxable income of such taxpayer 
for such taxable year does not exceed   
#a1jjj1jjj 7half such amount in the case
 of a married individual filing a       
separate return7 after ,if a taxpayer   
has a net capital gain for any taxable  
year4  7b7 ,inflation adjustment        
,section #a7;h7 of such ,code is amended
 by adding at the end the following new 
paragraph3  7#ab7 ,inflation adjustment 
7,a7 ,in general ,in the case of any    
taxable year beginning after #bjbf1 the 
#a1jjj1jjj amount in paragraph 7#a7     
shall be increased by an amount equal   
to-- 7i7 such dollar amount1 multiplied 
by  7ii7 the cost-of-living adjustment  
determined under section #a7;f77#c7 for 
the calendar year in which the taxable  
year begins1 determined by substituting 
calendar year #bjbe for calendar year   
#bjaf in subparagraph 7,a77ii7 thereof4 
7,b7 ,rounding ,if any increase under   
subparagraph 7,a7 is not a multiple of  

#ej1 such dollar amount shall be rounded
 to the next lowest multiple of #ej4  4 
7c7 ,effective date ,the amendments made
 by this section shall apply to taxable 
years beginning after ,december #ca1    
#bjbe4  #g4 ,increase in rates of       
certain corporate taxes  7a7 ,corporate 
income tax rate ,section #aa7;b7 of the 
,internal ,revenue ,code of #aihf is    
amended by striking #ba percent and     
inserting #bh percent4  7b7 ,rate of tax
 on repurchase of corporate stock       
,section #deja7;a7 of such ,code is     
amended by striking #a percent and      
inserting #d percent4  7c7 ,corporate   
alternative minimum tax rate ,section   
#ee7;b77#b77;,a77i7 of such ,code is    
amended to read as follows3  7i7 the sum
 of-- 7,i7 #ae percent of so much of the
 adjusted financial statement income 7as
 defined in section #ef;,a7 as does not 
exceed #e1jjj1jjj1jjj1 plus  7,,ii7 #be 
percent of so much of such adjusted     
financial statement income as exceeds   
#e1jjj1jjj1jjj1  4  7d7 ,effective dates

 ,the amendments made by this section   
shall apply to taxable years beginning  
after ,december #ca1 #bjbe4