[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2437 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 2437
To amend the Internal Revenue Code of 1986 to establish a refundable
tax credit for parents who take leave from employment following the
birth or adoption of a child.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 1, 2019
Mr. Young 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 establish a refundable
tax credit for parents who take leave from employment following the
birth or adoption of a child.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Support Working Families Act''.
SEC. 2. PARENTAL LEAVE TAX CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of subtitle A of the Internal Revenue Code of 1986 is amended by
inserting after section 36B the following new section:
``SEC. 36C. PARENTAL LEAVE CREDIT.
``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this subtitle for the taxable year
an amount equal to the sum of--
``(A) the current year parental leave credit, plus
``(B) the parental leave credit carryback carried
to such taxable year.
``(2) Current year parental leave credit.--
``(A) In general.--Subject to subparagraphs (B) and
(C), the amount of the current year parental leave
credit for the taxable year shall be equal to the
product of--
``(i) the total number of weeks of parental
leave taken during the benefit period by an
individual described in subsection (c)(1)(A)
which are completed within such taxable year,
multiplied by
``(ii) an amount equal to the replacement
percentage (as determined for each week of
parental leave pursuant to subsection (b)(1))
of the average weekly wage rate for such
individual.
``(B) Limitation.--The current year parental leave
credit for any taxable year shall not exceed the lesser
of--
``(i) an amount equal to--
``(I) the amount determined under
subparagraph (A) (determined as if the
replacement percentage were 100
percent), minus
``(II) an amount equal to the sum
of any paid parental or medical leave
benefits which are provided to the
individual for any weeks included under
clause (i) of such subparagraph--
``(aa) pursuant to any law
or plan of a State or a
political subdivision thereof,
or
``(bb) by the employer of
such individual, or
``(ii) $6,000.
``(C) Reduction in benefit amount on account of
receipt of certain benefits.--The current year parental
leave credit for any taxable year (after application of
subparagraph (B)) shall be reduced by the amount, if
any, in certain benefits as may be otherwise received
by an individual for any weeks included under
subparagraph (A)(i). For purposes of the preceding
sentence, certain benefits include--
``(i) periodic benefits on account of such
individual's total or partial disability under
a workmen's compensation law or plan of the
United States or a State,
``(ii) periodic benefits on account of an
individual's employment status under an
unemployment law or plan of the United States
or a State, and
``(iii) such other benefits as determined
under regulations issued by the Secretary.
``(3) Parental leave credit carryback.--In the case of an
individual who elects not to apply the current year parental
leave credit to the taxable year which includes the weeks of
parental leave described in subparagraph (A)(i), the amount of
such credit--
``(A) shall be reduced to zero for such taxable
year, and
``(B) shall be a parental leave credit carryback to
the preceding taxable year.
``(b) Determination of Credit Amount.--
``(1) Replacement percentage.--The replacement percentage
shall be the amount, expressed as a percentage, which has been
elected by the individual (in such manner and at such time as
is prescribed by the Secretary) for each week of parental leave
described in paragraph (2)(A)(i) of subsection (a) for purposes
of determining the credit allowed under such subsection,
provided that--
``(A) such amount is not less than 40 percent and
not greater than 90 percent, and
``(B) for each week of parental leave described in
paragraph (2)(A)(i) of subsection (a), such amount does
not result in a credit allowed under such subsection
that exceeds--
``(i) the average weekly wage rate for such
individual, minus
``(ii) any amounts described in paragraph
(2)(B)(i)(II) of such subsection which are
provided to the individual for such week.
``(2) Average weekly wage rate.--The average weekly wage
rate shall be an amount equal to the greater of--
``(A) the annual average amount of the individual's
wages and self-employment income for the period of the
3 calendar years preceding the calendar year in which
the parental leave is taken by the individual, prorated
on a weekly basis, or
``(B) the amount of the individual's wages and
self-employment income for the calendar year preceding
the calendar year in which the parental leave is taken
by the individual, prorated on a weekly basis.
``(3) Benefit period.--The benefit period for an individual
shall be the period of weeks--
``(A) beginning with the latter of--
``(i) the first week in which the
individual satisfies the requirements under
subsection (c)(1)(A), or
``(ii) the first week--
``(I) in which the individual
satisfies the requirements under such
subsection, and
``(II) which is not less than 1
year after the completion of any
previous benefit period, and
``(B) ending on the date that is 1 year after the
date of the birth or adoption of the child.
``(c) Eligibility Requirements.--
``(1) Employment.--
``(A) In general.--An individual is described in
this subparagraph if, on the date of the birth or
adoption of the child, such individual--
``(i) is a parent of the child,
``(ii) is employed and, during the 64-week
period preceding such date, has been employed
for not less than 52 weeks, and
``(iii) has worked not less than a total of
1,000 hours during the 52-week period described
in clause (ii).
``(B) Determination of employment.--The Secretary,
in consultation with the Secretary of Labor, shall
prescribe such regulations, rules, and guidance as may
be necessary to determine the length of employment and
hours of service of an individual, including rules for
the application of this paragraph to individuals who
are not compensated on an hourly basis.
``(2) Additional information.--
``(A) In general.--No credit shall be allowed under
subsection (a) for any taxable year unless the
individual includes the following information on the
return of tax for such taxable year (or through the
program established under section 2(b) of the Support
Working Families Act):
``(i) An attestation from the individual
that such individual--
``(I) if the individual has an
employer, has provided such employer
with written notice of the individual's
intention to take parental leave,
``(II) has satisfied the
requirements under clauses (ii) and
(iii) of paragraph (1)(A),
``(III) will be taking leave from
employment for each week of parental
leave taken during the benefit period,
and
``(IV) intends to maintain the same
principal place of abode as the child
for more than \1/2\ of the 12-month
period following the date of the birth
or adoption of the child.
``(ii) Any information, as determined
necessary by the Secretary, regarding any paid
parental or medical leave benefits described in
subsection (a)(2)(B)(i)(II) which are provided
to the individual.
``(iii) The name of the child of the
individual and the date of the birth or
adoption of the child.
``(iv) Subject to subparagraph (B), the
weeks of parental leave taken during the
benefit period.
``(v) The social security number of the
individual.
``(vi) Subject to subparagraph (C), the
social security number of the child.
``(vii) Subject to subparagraph (D), a copy
of the birth certificate or other documentation
demonstrating that the individual is the parent
or legal guardian of the child.
``(B) Weeks of parental leave.--For purposes of the
credit allowed under subsection (a)--
``(i) any weeks of parental leave taken
during the benefit period for which such credit
is being claimed shall be a full workweek, and
``(ii) the total number of weeks of
parental leave taken by an individual during
the benefit period shall not be less than 4
weeks or greater than 12 weeks.
``(C) Social security number.--
``(i) Adoption.--
``(I) In general.--In the case of
an individual who legally adopts a
child, if such child has not received a
social security number at the time of
the filing of the return of tax
described in subparagraph (A), the
parent of such child may be allowed the
credit under subsection (a), provided
that--
``(aa) the Adoption
Taxpayer Identification Number
for such child is included on
the return of tax described in
subparagraph (A), and
``(bb) the social security
number for such child is
provided to the Secretary not
later than 15 months after the
date of the adoption of such
child.
``(II) Notice.--In the case of a
child described in subclause (I), the
Secretary shall provide notice of the
requirement under item (bb) of such
subclause to the parent of such child--
``(aa) at the time that the
credit allowed under subsection
(a) is refunded or otherwise
provided to such parent, and
``(bb) on the date that is
12 months after the date of the
adoption of such child.
``(III) Rescission.--
``(aa) In general.--In the
case of an individual who is
the parent of a child described
in subclause (I) and
subsequently fails to provide a
social security number for such
child to the Secretary during
the period described in
subclause (II)(bb), the tax
imposed by this chapter for the
applicable taxable year shall
be increased by 100 percent of
the amount of the credit
allowed under subsection (a) to
such individual for any
parental leave claimed with
respect to such child.
``(bb) Applicable taxable
year.--The term `applicable
taxable year' means the taxable
year which includes the date
that is 15 months after the
date of the adoption of the
child.
``(ii) Religious objections.--The
Secretary, in coordination with the
Commissioner of Social Security, shall
prescribe such regulations, rules, and guidance
as may be necessary to apply the requirements
under this paragraph relating to social
security numbers for individuals who have
religious objections to obtaining a social
security number for themselves or their
children.
``(D) Birth certificate or other documentation.--
``(i) In general.--In the case of a parent
who has not received the certificate or
documentation described in clause (vii) of
subparagraph (A) for their child at the time of
the filing of the return of tax described in
such subparagraph, the parent may be allowed
the credit under subsection (a), provided that
such certificate or documentation is provided
to the Secretary not later than 15 months after
the date of the birth or adoption of such
child.
``(ii) Notice and rescission.--Rules
similar to the rules of subclauses (II) and
(III) of subparagraph (C)(i) shall apply for
purposes of this subparagraph.
``(3) Ineligibility; disqualification.--
``(A) Ineligibility for benefit.--No credit shall
be allowed under subsection (a) for any taxable year
during which the individual is entitled to--
``(i) disability insurance benefits under
section 223 of the Social Security Act (42
U.S.C. 423) or a similar permanent disability
program under any law or plan of a State or
political subdivision or instrumentality of a
State (as such terms are used in section 218 of
the Social Security Act (42 U.S.C. 418)),
``(ii) monthly insurance benefits under
section 202 of such Act (42 U.S.C. 402) based
on such individual's disability (as defined in
section 223(d) of such Act (42 U.S.C. 423(d))),
or
``(iii) benefits under title XVI of such
Act (42 U.S.C. 1381 et seq.) based on such
individual's status as a disabled individual
(as determined under section 1614 of such Act
(42 U.S.C. 1382c)).
``(B) Restrictions on individuals who improperly
claimed credit in prior year.--
``(i) Prior fraudulent or reckless
claims.--
``(I) In general.--No credit shall
be allowed under subsection (a) for any
taxable year in the disallowance
period.
``(II) Disallowance period.--For
purposes of subclause (I), the
disallowance period is--
``(aa) the period of 10
taxable years after the most
recent taxable year for which
there was a final determination
that the individual's claim of
credit under this section was
due to fraud, and
``(bb) the period of 2
taxable years after the most
recent taxable year for which
there was a final determination
that--
``(AA) the
individual's claim of
credit under this
section was due to
reckless or intentional
disregard of rules and
regulations (but not
due to fraud), or
``(BB) the
individual claimed the
credit under this
section and
subsequently failed to
provide the Secretary
with the social
security number or
documentation described
in clause (vi) or (vii)
of paragraph (3)(A)
during the 15-month
period following the
date of the brith or
adoption of their
child, as required
under subparagraphs (C)
and (D) of paragraph
(3).
``(ii) Improper prior claims.--In the case
of an individual who is denied the credit under
this section for any taxable year as a result
of the deficiency procedures under subchapter B
of chapter 63, no credit shall be allowed under
this section for any subsequent taxable year
unless the individual provides such information
as the Secretary may require to demonstrate
eligibility for such credit.
``(d) Relationship With State Law; Employer Benefits; Prohibited
Acts.--
``(1) In general.--This section does not preempt or
supercede any provision of State or local law that authorizes a
State or local municipality to provide benefits or payments to
any individual for parental leave taken by such individual.
``(2) Greater benefits allowed.--Nothing in this Act shall
be construed to diminish the obligation of an employer to
comply with any contract, collective bargaining agreement, or
any employment benefit program or plan that provides greater
paid parental leave rights to employees than the credit allowed
under this section.
``(3) Prohibited acts.--It shall be unlawful for any person
to discharge or in any other manner discriminate against an
individual because the individual has claimed, indicated an
intent to claim, or received the credit allowed under this
section.
``(e) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after 2020, the dollar amount in subsection
(a)(2)(B)(ii) 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 such calendar year by
substituting `calendar year 2019' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(2) Rounding.--If any increase determined under paragraph
(1) is not a multiple of $50, such increase shall be rounded to
the nearest multiple of $50.
``(f) Recapture of Credit.--
``(1) In general.--If a credit under subsection (a) is
allowed to a taxpayer, the tax imposed by this chapter shall be
increased by 20 percent of the applicable amount for each
taxable year in the recapture period.
``(2) Applicable amount.--
``(A) In general.--For purposes of this subsection,
the applicable amount shall be equal to--
``(i) the amount of the credit allowed
under subsection (a), minus
``(ii) the amount of payments made by the
taxpayer during the prepayment period.
``(B) Prepayment period.--
``(i) In general.--For purposes of this
paragraph, the term `prepayment period' means
the period of 3 taxable years subsequent to the
taxable year in which the credit under
subsection (a) is allowed.
``(ii) Development of prepayment
mechanism.--For purposes of subparagraph
(A)(ii), the Secretary shall establish
appropriate procedures and mechanisms to allow
taxpayers to reduce the amount of the tax
imposed under paragraph (1) by making payments
during the prepayment period.
``(3) Recapture period.--For purposes of this subsection,
the term `recapture period' means the period of 5 taxable years
subsequent to the prepayment period.
``(4) Return requirement.--If the tax imposed by this
chapter for the taxable year is increased under this
subsection, the taxpayer shall, notwithstanding section 6012,
be required to file a return with respect to the taxes imposed
under this subtitle.
``(5) Joint returns.--In the case of a credit allowed under
subsection (a) with respect to a joint return, half of such
credit shall be treated as having been allowed to each
individual filing such return for purposes of this subsection.
``(6) Exception.--This subsection shall not apply to any
taxable year ending after the date of the death of the
individual allowed the credit under subsection (a).
``(g) Definitions.--In this section:
``(1) Child.--The term `child' means a biological or
legally adopted child who has not attained 18 years of age.
``(2) Parent.--The term `parent' means--
``(A) the biological mother or father of a child,
or
``(B) an individual who legally adopts a child,
who is the legal guardian of the child and who intends to
maintain the same principal place of abode as the child for
more than \1/2\ of the 12-month period following the date of
the birth or adoption of the child.
``(3) Parental leave.--The term `parental leave' means any
period of leave from employment which is taken by a parent to
provide care for a child.''.
(b) Pre-Calculation of Parental Leave Credit.--Not later than
January 1, 2020, the Secretary of the Treasury or the Secretary's
delegate (referred to in this subsection and subsection (c) as the
``Secretary'') shall establish a program, to be made available online
and through such other methods as is determined appropriate by the
Secretary, to allow individuals who intend to take parental leave to--
(1) determine their average weekly wage rate (as defined in
subsection (b)(2) of section 36C of the Internal Revenue Code
of 1986);
(2) determine whether they satisfy the requirements under
clauses (ii) and (iii) of section 36C(c)(1)(A) of such Code
and, if such requirements are not satisfied, determine the
number of hours or weeks needed to satisfy such requirements
prior to the expected date of the birth or adoption of a child;
(3) calculate--
(A) the amount of the parental leave credit under
section 36C of such Code based on different replacement
percentages (as described in subsection (b)(1) of such
section); and
(B) the amount of any increase in taxes pursuant to
subsection (f) of such section based on different
amounts of payments made by the individual during the
prepayment period (as defined in paragraph (2)(B) of
such subsection); and
(4) provide the Secretary with any information required
under subsection (c)(2)(A) of section 36C of the Internal
Revenue Code of 1986 which is available to such individual at
that time.
(c) Expedited Amended Return Process.--For any individual who has--
(1) taken parental leave during a taxable year;
(2) elected to receive a parental leave credit carryback
(as described in subsection (a)(3) of section 36C of the
Internal Revenue Code of 1986) for such parental leave; and
(3) has timely filed an amendment to the income tax return
for such individual for the preceding taxable year for the sole
purpose of claiming the credit allowed under subsection (a) of
such section,
the Secretary shall establish a separate and expedited process for
reviewing and processing such amended returns.
(d) Conforming Amendments.--
(1) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of subtitle A of the Internal Revenue
Code of 1986 is amended by inserting after the item relating to
section 36B the following:
``Sec. 36C. Parental leave credit.''.
(2) Section 6211(b)(4)(A) of such Code is amended by
striking ``and 36B, 168(k)(4)'' and inserting ``36B, and 36C''.
(3) Section 6213(g)(2) of such Code is amended--
(A) in subparagraph (P), by striking ``and'' at the
end;
(B) in subparagraph (Q), by striking the period at
the end and inserting ``, and''; and
(C) by inserting after subparagraph (Q) the
following:
``(R) an omission of information required by
subsection (c) of section 36C or an entry on the return
claiming the credit under such section for a taxable
year for which such credit is disallowed pursuant to
section 36C(c)(4).''.
(4) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``36C,'' after ``36B,''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2019.
<all>
Support Working Families Act
#2437 | S Congress #116
Policy Area: Taxation
Last Action: Read twice and referred to the Committee on Finance. (8/1/2019)
Bill Text Source: Congress.gov
Summary and Impacts
Original Text