Sec. 202. Establishment of fully refundable child tax credit
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Subpart A of part IV of subchapter A of chapter 1 of subtitle A of the Internal Revenue Code of 1986 is amended by striking section 24. Subpart C of part IV of subchapter A of chapter 1 of subtitle A of such Code is amended by inserting after section 36B the following new section: In the case of a taxpayer with a qualifying child, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 15 percent of the taxpayer's earned income (within the meaning of section 32) which is taken into account in computing taxable income for the taxable year.
Except as provided in paragraph (2), the amount of the credit allowable to a taxpayer by subsection
(a)for the taxable year shall not exceed an amount equal to the product of $1,000 and the number of qualifying children of the taxpayer. The amount which would (but for this paragraph) be allowable as a credit under this subsection shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds— $110,000 in the case of a joint return, $75,000 in the case of an individual who is not married, and $55,000 in the case of a married individual filing a separate return. For purposes of this paragraph, marital status shall be determined under section 7703. In this section, the term qualifying child means a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 17. The term qualifying child shall not include any individual who would not be a dependent if subparagraph
(A)of section 152(b)(3) were applied without regard to all that follows resident of the United States . In this section, the term modified adjusted gross income means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933. In the case of any taxable year beginning after 2017, the $1,000 amount in subsection (b)(1) shall be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins determined by substituting calendar year 2016 for calendar year 1992 in subparagraph
(B)thereof. If any increase determined under paragraph
(1)is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50. 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 return. No credit shall be allowed under this section if the identifying number of the taxpayer was issued after the due date for filing the return for the taxable year. Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months. No credit shall be allowed under this section for any taxable year in the disallowance period. For purposes of subparagraph (A), the disallowance period is— the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of credit under this section was due to fraud, and the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud). In the case of a taxpayer who is denied credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit. . The table of sections for subpart A of part IV of subchapter A of chapter 1 of subtitle A of the Internal Revenue Code of 1986 is amended by striking the item relating to section 24. The table of sections for subpart C of part IV of subchapter A of chapter 1 of subtitle A of such Code is amended by inserting after the item relating to section 36B the following: Sec. 36C. Child tax credit. . Subparagraph
(B)of section 45R(f)(3) of such Code is amended to read as follows: Any amounts paid pursuant to an agreement under section 3121(l) (relating to agreements entered into by American employers with respect to foreign affiliates) which are equivalent to the taxes referred to in subparagraph
(A)shall be treated as taxes referred to in such subparagraph. . Section 152(f)(6)(B)(ii) of such Code is amended by striking section 24 and inserting section 36C . Paragraph
(26)of section 501(c) of such Code is amended in the flush matter at the end by striking section 24(c) and inserting section 36C(c) . Section 6211(b)(4)(A) of such Code is amended by inserting 36C, after 36B, . Section 6213(g)(2) of such Code is amended— in subparagraph (I), by striking section 24(e) and inserting section 36C(d) , and in subparagraph (L), by striking 24, 32 and inserting 32, 36C . Subchapter B of chapter 65 of subtitle F of such Code is amended by striking section 6429. Paragraph
(2)of section 1324(b) of title 31, United States Code, is amended by inserting 36C, after 36B, . The amendments made by this section shall apply to taxable years beginning after December 31, 2016.