H.R. 2438

119th CONGRESS 1st Session

To amend the Internal Revenue Code of 1986 to create a refundable tax credit for foster families, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · March 27, 2025 · Sponsor: Mrs. Houchin

Table of contents

• H.R. 2438
  • Sec. 36C. Foster care tax credit.

Sec. 36C. Foster care tax credit.

• Foster care tax credit
• (a) Allowance of credit
  • In the case of an eligible taxpayer, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to $850.
  • Allowance of credit
• (b) Limitation
  • (1) In general
    • The amount of the credit allowable under subsection (a) (determined without regard to this subsection) shall be reduced (but not below zero) by the amount which bears the same ratio to such credit (as so determined) as—
      • the excess of—
        • (i) the taxpayer's modified adjusted gross income for such taxable year, over
        • (ii) the threshold amount, bears to
      • $17,000.
  • (2) Threshold amount
    • For purposes of paragraph (1), the term threshold amount means—
      • $250,000, in the case of a joint return,
      • $150,000, in the case of an individual who is not married, and
      • $125,000, in the case of a married individual filing a separate return.
    • For purposes of this paragraph, marital status shall be determined under section 7703.
  • (3) Modified adjusted gross income
    • For purposes of this subsection, the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.
• (c) Eligible taxpayer
  • For purposes of this section—
  • (1) In general
    • The term eligible taxpayer means, with respect to any taxable year, any taxpayer—
      • with whom a qualifying foster child was placed for a period of not less than 1 month during such taxable year, and
      • for whom a credit under section 24 with respect to such eligible foster child is not allowed for such taxable year.
  • (2) Qualifying foster child
    • The term qualifying foster child means an eligible foster child (within the meaning of section 152(f)(1)(C))—
    • Qualifying foster child
      • who has not attained age 17, and
      • who is a citizen, national, or resident of the United States.
  • (3) Calendar month
    • For purposes of this paragraph (1)(A), if a foster child resides in the home of the taxpayer for more than 15 consecutive days of a calendar month but fewer than the total number of days in such calendar month, such foster child shall be treated as residing in the home of the taxpayer for the full calendar month.
    • Calendar month
• (d) Restrictions on Taxpayers Who Improperly Claimed Credit in Prior Year
  • (1) Taxpayers making prior fraudulent or reckless claims
    • (A) In general
      • No credit shall be allowed under this section for any taxable year in the disallowance period.
    • (B) Disallowance period
      • For purposes of subparagraph (A), the disallowance period is—
        • (i) 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
        • (ii) 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).
  • (2) Taxpayers making improper prior claims
    • In the case of a taxpayer who is denied credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 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.