Sec. 9631. REFUNDABILITY AND ENHANCEMENT OF CHILD AND DEPENDENT CARE TAX CREDIT
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## SEC. 9631 REFUNDABILITY AND ENHANCEMENT OF CHILD AND DEPENDENT CARE TAX CREDIT ###
(a)In General **[**[26 U.S.C. 21](/us/usc/t26/s21)**]** Section 21 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: > > ### “(g) Special Rules for 2021 > > In the case of any taxable year beginning after December 31, 2020, and before January 1, 2022— > > > #### “(1) Credit made refundable > > If the taxpayer (in the case of a joint return, either spouse) has a principal place of abode in the United States (determined as provided in section 32) for more than one-half of the taxable year, the credit allowed under subsection
(a)shall be treated as a credit allowed under subpart C (and not allowed under this subpart). > > > #### “(2) Increase in dollar limit on amount creditable > > Subsection
(c)shall be applied— > > > ##### “(A) > > by substituting ‘$8,000’ for ‘$3,000’ in paragraph
(1)thereof, and > > > ##### “(B) > > by substituting ‘$16,000’ for ‘$6,000’ in paragraph
(2)thereof. > > > #### “(3) Increase in applicable percentage > > Subsection (a)(2) shall be applied— > > > ##### “(A) > > by substituting ‘50 percent’ for ‘35 percent’, and > > > ##### “(B) > > by substituting ‘$125,000’ for ‘$15,000’. > > > #### “(4) Application of phaseout to high income individuals > > > ##### “(A) In general > > Subsection (a)(2) shall be applied by substituting ‘the phaseout percentage’ for ‘20 percent’. > > > ##### “(B) Phaseout percentage > > The term ‘phaseout percentage’ means 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $400,000.” > . ###
(b)Application of Credit in Possessions Section 21 of such Code, as amended by subsection (a), is amended by adding at the end the following new subsection: > > ### “(h) Application of Credit in Possessions > > > #### “(1) Payment to possessions with mirror code tax systems > > The Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning in or with 2021. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession. > > > #### “(2) Payments to other possessions > > The Secretary shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of this section with respect to taxable years beginning in or with 2021 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary, under which such possession will promptly distribute such payments to its residents. > > > #### “(3) Coordination with credit allowed against united states income taxes > > In the case of any taxable year beginning in or with 2021, no credit shall be allowed under this section to any individual— > > > ##### “(A) > > to whom a credit is allowable against taxes imposed by a possession with a mirror code tax system by reason of this section, or > > > ##### “(B) > > who is eligible for a payment under a plan described in paragraph (2). > > > #### “(4) Mirror code tax system > > For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, 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 States. > > > #### “(5) Treatment of payments > > For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.” > . ###
(c)Conforming Amendments ####
(1)**[**[26 U.S.C. 6211](/us/usc/t26/s6211)**]** Section 6211(b)(4)(A) of such Code, as amended by the preceding provisions of this Act, is amended by inserting “21 by reason of subsection
(g)thereof,” before “24”. ####
(2)Section 1324(b)(2) of title 31, United States Code (as amended by the preceding provisions of this title), is amended by inserting “21,” before “24”. ###
(d)Effective Date **[**[26 U.S.C. 21 note](/us/usc/t26/s21)**]** The amendments made by this section shall apply to taxable years beginning after December 31, 2020.
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