S. 1382

119 S1382 IS: Family First Act
 U.S. Senate
 2025-04-09
 text/xml
 EN
 Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
 II  119th CONGRESS  1st Session  S. 1382  IN THE SENATE OF THE UNITED STATES   April 9, 2025   Mr. Banks  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 enhance the child tax credit, and for other purposes.
1.
Short title
This Act may be cited as the   Family First Act  .
I
Child Tax Credit and Tax Credit for Pregnant Mothers
101.
Permanent expansion of child tax credit
(a)
In general
 Section 24  of the Internal Revenue Code of 1986 is amended—
(1)
by striking subsections (a) through (e) and inserting the following new subsections:
(a)
Allowance of credit
(1)
In general
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of the base credit amount.
(2)
Base credit amount
For purposes of paragraph (1), the base credit amount shall be an amount equal to the sum of—
(A)
for each qualifying child who has not attained age 6 as of the close of the calendar year in which the taxable year of the taxpayer begins, $4,200, and
(B)
for each qualifying child of the taxpayer who is not described in subparagraph (A), $3,000.
(b)
Applicable percentage and limitation based on adjusted gross income
(1)
Applicable percentage
For purposes of subsection (a), the applicable percentage shall be—
(A)
in the case of a taxpayer whose modified adjusted gross income is equal to or greater than $20,000, 100 percent, or
(B)
in the case of a taxpayer whose modified adjusted gross income is less than $20,000, an amount (expressed as a percentage) equal to the quotient of—
(i)
the modified adjusted gross income of the taxpayer, divided by
(ii)
$20,000.
(2)
Limitation
The amount of the credit allowable under subsection (a) 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—
(A)
in the case of a joint return, $400,000, or
(B)
in any other case, $200,000.
(3)
Modified adjusted gross income
For purposes of this subsection, the term  modified adjusted gross income  means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.
(4)
Adjustment for inflation
(A)
In general
In the case of a taxable year beginning after 2026, each of the $20,000 amounts in paragraph (1) shall be increased by an amount equal to—
(i)
$20,000, multiplied by
(ii)
the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting  2025  for  2016  in subparagraph (A)(ii) thereof.
(B)
Rounding
If any increase under this paragraph is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100.
(c)
Qualifying child
For purposes of this section—
(1)
In general
The term  qualifying child  means a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 17 as of the close of the calendar year in which the taxable year of the taxpayer begins.
(2)
Exception for certain noncitizens
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 .
(d)
Limitation on number of children
The number of qualifying children of a taxpayer for which a credit may be allowed under this section for any taxable year shall not exceed 6.
(e)
Identification requirements
(1)
In general
No credit shall be allowed under this section to a taxpayer who does not include on the return of tax for the taxable year—
(A)
the social security number of the taxpayer (and, in the case of a joint return, the social security number of at least 1 spouse), and
(B)
with respect to any qualifying child, the name and the social security number of such qualifying child.
(2)
Social security number defined
For purposes of this subsection, the term  social security number  means, with respect to a return of tax, a social security number issued to an individual by the Social Security Administration, but only if the social security number is issued—
(A)
to a citizen of the United States or pursuant to subclause (I) (or that portion of subclause (III) that relates to subclause (I)) of section 205(c)(2)(B)(i) of the Social Security Act, and
(B)
before the due date of filing such return.
 ,
(2)
by striking subsections (h) through (j),
(3)
in subsection (k)—
(A)
by striking paragraph (2) and inserting the following:
(2)
Puerto Rico
In the case of any bona fide resident of Puerto Rico (within the meaning of section 937(a)), the credit determined under this section shall be allowable to such resident.
 , and
(B)
in paragraph (3)—
(i)
in subparagraph (A), by striking  and without regard to the application of this section to bona fide residents of Puerto Rico under subsection (i)(1) , and
(ii)
in subparagraph (C), by striking clause (ii) and inserting the following:
(ii)
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 (B), rules similar to the rules of paragraph (2) shall apply with respect to bona fide residents of American Samoa (within the meaning of section 937(a)).
 , and
(4)
by redesignating subsection (k) (as amended by paragraph (3)) as subsection (h).
(b)
Treatment as fully refundable
(1)
Credit moved to subpart relating to refundable credits
(A)
In general
The Internal Revenue Code of 1986 is amended—
(i)
by redesignating section 24, as amended by this section, as section 36C, and
(ii)
by moving such section, as so redesignated, from subpart A of part IV of subchapter A of chapter 1 to the location immediately after section 36B in subpart C of part IV of subchapter A of chapter 1.
(B)
Technical amendment
Subsection (a) of section 36C of such Code, as moved and redesignated by subparagraph (A), is amended by striking  this chapter  and inserting  this subtitle .
(C)
Clerical amendments
(i)
The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 24.
(ii)
The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
Sec. 36C. Child tax credit.
  .
(2)
Conforming amendments
(A)
Section 26(b)(2) of such Code is amended—
(i)
by striking  , and  at the end of subparagraph (Y) and inserting a period,
(ii)
by inserting  and  at the end of subparagraph (X), and
(iii)
by striking subparagraph (Z).
(B)
Section 45R(f)(3)(B) of such Code is amended to read as follows:
(B)
Special rule
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.
 .
(C)
Section 48D(d)(4) of such Code is amended by striking  section 24(k)  and inserting  section 36C(h) .
(D)
Section 152(f)(6)(B)(ii) of such Code is amended by striking  section 24  and inserting  section 36C .
(E)
Section 501(c)(26) of such Code is amended in the flush matter at the end by striking  section 24(c))  and inserting  section 36C(c)) .
(F)
Section 3402(f)(1)(C) of such Code is amended by striking  section 24 (determined after application of subsection (j) thereof)  and inserting  section 36C .
(G)
Section 6103(l)(13)(A)(v) of such Code is amended by striking  section 24  and inserting  section 36C .
(H)
Section 6211(b)(4)(A) of such Code is amended—
(i)
by striking  24 by reason of subsections (d) and (i)(1) thereof, ,
(ii)
by inserting  and 36C  after  36B, , and
(iii)
by striking  , 6428, 6428A, 6428B, and 7527A .
(I)
Section 6213(g)(2) of such Code is amended—
(i)
in subparagraph (I), by striking  correct TIN required under section 24(e)  and inserting  correct social security number required under section 36C(e) ,
(ii)
in subparagraph (L)—
(I)
by striking  24, or 32  and inserting  32, or 36C , and
(II)
by striking  TIN  each place it appears and inserting  TIN or social security number , and
(iii)
in subparagraph (P)—
(I)
by striking  24(g)(2)  and inserting  36C(g)(2) , and
(II)
by striking  section 24  and inserting  section 36C .
(J)
Section 6402(m) of such Code is amended by striking  section 24 (by reason of subsection (d) thereof) or 32  and inserting  section 32 or 36C .
(K)
Section 6417(f) of such Code is amended by striking  section 24(k)  and inserting  section 36C(h) .
(L)
Section 6695(g)(2) of such Code is amended by striking  24, 25A(a)(1), or 32  and inserting  25A(a)(1), 32, or 36C .
(M)
Section 1324(b)(2) of title 31, United States Code, is amended—
(i)
by striking  24, , and
(ii)
by inserting  36C,  after  36B, .
(N)
Section 1613(a)(11)(A) of the Social Security Act ( 42 U.S.C. 1382b(a)(11)(A) ) is amended by striking  section 24 of the Internal Revenue Code of 1986 (relating to child tax credit) by reason of subsection (d) thereof   and inserting  section 36C of the Internal Revenue Code of 1986 (relating to child tax credit) .
(O)
Chapter 77 of such Code is amended by striking section 7527A (and the item relating to such section in the table of sections for such chapter).
(c)
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2025.
102.
Tax credit for pregnant mothers
(a)
In general
Subpart C of part IV of subchapter A of  chapter 1  of the Internal Revenue Code of 1986 is amended by inserting after section 36C (as redesignated by section 101) the following new section:
36D.
Credit for pregnant mothers
(a)
Allowance of credit
In the case of an eligible taxpayer with a qualifying unborn child, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of $2,800.
(b)
Applicable percentage
(1)
In general
For purposes of subsection (a), the applicable percentage shall be—
(A)
in the case of a taxpayer whose modified adjusted gross income is equal to or greater than $10,000, 100 percent, or
(B)
in the case of a taxpayer whose modified adjusted gross income is less than $10,000, the amount (expressed as a percentage) equal to the quotient of—
(i)
the modified adjusted gross income of the taxpayer, divided by
(ii)
$10,000.
(2)
Limitation
The amount of the credit allowable under subsection (a) 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—
(A)
in the case of a joint return, $400,000, or
(B)
in any other case, $200,000.
(3)
Modified adjusted gross income
For purposes of this subsection, the term  modified adjusted gross income  has the same meaning given such term in section 36C(b)(3).
(4)
Adjustment for inflation
(A)
In general
In the case of a taxable year beginning after 2026, each of the $10,000 amounts in paragraph (1) shall be increased by an amount equal to—
(i)
$10,000, multiplied by
(ii)
the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting  2025  for  2016  in subparagraph (A)(ii) thereof.
(B)
Rounding
If any increase under this paragraph is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100.
(c)
Qualifying unborn child
(1)
In general
For purposes of this section, the term  qualifying unborn child  means an unborn child whose gestational age is 20 weeks or greater, as certified by a physician in accordance with paragraph (2).
(2)
Certification
(A)
In general
Upon the request of the mother, a physician may make a determination with respect to the gestational age of the unborn child. Any determination made under this paragraph shall be based on the reasonable medical judgment of the physician following such inquiries, examinations, and tests as a reasonably prudent physician would deem necessary for purposes of making such determination.
(B)
Form
If the physician has made a determination pursuant to subparagraph (A) that the gestational age of the unborn child is 20 weeks or greater, such physician may, upon the request of the mother, provide the mother with a form which includes the following:
(i)
The gestational age and the expected due date of the unborn child.
(ii)
The name and social security number of the mother.
(iii)
If applicable, the name and social security number of the spouse of such mother.
(iv)
The name and contact information of the physician.
(v)
A written certification from such physician stating, under penalty of perjury pursuant to section 1746 of title 28, that—
(I)
the mother was determined to have been pregnant with the unborn child, according to standard medical practice, by such physician, and
(II)
such physician has determined that, in their reasonable medical judgment, the gestational age of the unborn child is 20 weeks or greater.
(vi)
A written certification from the mother of the unborn child stating, under penalty of perjury pursuant to section 1746 of title 28, United States Code, that she—
(I)
is the biological mother of such unborn child, or
(II)
initiated the pregnancy with the intention of bearing and retaining custody of and parental rights to such child (or acted to such effect).
(C)
Prohibition
Notwithstanding any other provision of law, the certification described in this paragraph shall not be used for any purpose other than to determine the eligibility of the taxpayer for the credit allowed under this section.
(d)
Application
(1)
In general
In the case of the involuntary death of an unborn child, or the death of an unborn child as a result of any treatment intended to save the life of the mother or any treatment of an ectopic pregnancy, occurring after 20 weeks gestation, the death of such child shall have no effect with respect to whether the credit is allowed under this section to an eligible taxpayer, provided that such taxpayer otherwise satisfies the applicable requirements under this section.
(2)
More than 1 unborn child during the same taxable year
In the case of an eligible taxpayer who—
(A)
has more than 1 pregnancy during a taxable year, or
(B)
is determined to be pregnant with more than 1 qualifying unborn child,
 the credit under this section shall be allowed with respect to each qualifying unborn child.
(3)
Interaction with child tax credit
The allowance of a credit under this section with respect to a qualifying unborn child shall have no effect in regards to the application of section 36C with respect to such child after the date of their birth.
(e)
Prohibition
No credit shall be allowed under this section if an unborn child died as a result of an induced abortion, but not including any treatment intended to save the life of the mother or any treatment of an ectopic pregnancy.
(f)
Definitions
In this section—
(1)
Eligible taxpayer
The term  eligible taxpayer  means a taxpayer who—
(A)
with respect to an unborn child, is the mother who—
(i)
carries or carried such child in the womb, and
(ii)
is the biological mother of such child or initiated the pregnancy with the intention of bearing and retaining custody of and parental rights to such child (or acted to such effect), or
(B)
in the case of a joint return, is the spouse of such mother,
 but only if such taxpayer includes on the return of tax for the taxable year the social security number of such taxpayer (of at least 1 of such mother or spouse, in the case of a joint return).
(2)
Gestational age
The term  gestational age  means the age of the unborn child, as calculated from the first day of the mother’s last menstrual period.
(3)
Physician
The term  physician  means an individual who is—
(A)
licensed to practice—
(i)
medicine and surgery,
(ii)
osteopathic medicine and surgery, or
(iii)
midwifery, or
(B)
otherwise legally authorized to—
(i)
perform births and to diagnose and attend miscarriages or stillbirths, and
(ii)
perform examinations to determine the gestational age of an unborn child,
 by the State in which such practice is performed.
(4)
Reasonable medical judgment
The term  reasonable medical judgment  means a medical judgment that would be made by a reasonably prudent physician who is knowledgeable about the case and the treatment possibilities with respect to the medical conditions involved.
(5)
Social security number
The term  social security number  has the meaning given such term by section 36C(e)(2).
 .
(b)
Clerical amendment
The table of sections for subpart C of part IV of subchapter A of  chapter 1  of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36C the following new item:
Sec. 36D. Credit for pregnant mothers.
  .
(c)
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2025.
II
Other amendments to the Internal Revenue Code of 1986
201.
Simplification of earned income credit for taxpayers with children
(a)
Additional limitation
 Section 32(a)(2)  of the Internal Revenue Code of 1986 is amended to read as follows:
(2)
Limitation
The amount of the credit allowable to a taxpayer under paragraph (1) for any taxable year shall not exceed the lesser of—
(A)
the excess (if any) of—
(i)
the credit percentage of the earned income amount, over
(ii)
the phaseout percentage of so much of the adjusted gross income (or, if greater, the earned income) of the taxpayer for the taxable year as exceeds the phaseout amount, or
(B)
an amount equal to—
(i)
in the case of any taxpayer with no qualifying children—
(I)
who is not filing a joint return, $700, or
(II)
who is filing a joint return, $1,400, or
(ii)
in the case of any taxpayer with 1 or more qualifying children—
(I)
who is not filing a joint return, $4,300, or
(II)
who is filing a joint return, $5,000.
 .
(b)
Credit percentage and phaseout percentage
The table contained in  section 32(b)(1)  of the Internal Revenue Code of 1986 is amended—
(1)
by striking  1 qualifying child  in the first row and inserting  1 or more qualifying children ,
(2)
by striking  15.98  in the first row and inserting  25 ,
(3)
by striking the second and third rows, and
(4)
by striking  7.65  in the third column of the last row and inserting  10 .
(c)
Earned income and phaseout amounts
The table contained in  section 32(b)(2)(A)  of the Internal Revenue Code of 1986 is amended—
(1)
by striking  1 qualifying child  in the first row and inserting  1 or more qualifying children ,
(2)
by striking  $6,330  in the first row and inserting  $12,647 ,
(3)
by striking  $11,610  in the first row and inserting  $33,000 ,
(4)
by striking the second row,
(5)
by striking  $4,220  in the last row and inserting  $9,150 , and
(6)
by striking  $5,280  in the last row and inserting  $10,000 .
(d)
Joint returns
 Section 32(b)(2)(B)  of the Internal Revenue Code of 1986 is amended by striking  $5,000  and inserting “$10,000, and the earned income amount determined under subparagraph (A) shall be increased—
(i)
by $2,059, in the case of a taxpayer with 1 or more qualifying children, and
(ii)
by $9,151, in the case of a taxpayer with no qualifying children.
 .
(e)
Inflation adjustment
 Section 32(j)(1)  of the Internal Revenue Code of 1986 is amended—
(1)
by striking  2015  and inserting  2026 ,
(2)
by striking clauses (i) and (ii) of subparagraph (B) thereof and redesignating clause (iii) of such subparagraph as clause (ii), and
(3)
by inserting before clause (ii) of subparagraph (B) thereof, as so redesignated, the following new clause:
(i)
in the case of amounts in subsection (b)(2),  calendar year 2025  for  calendar year 2016 , and
 .
(f)
Effective date
(1)
In general
Subject to paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2025.
(2)
Nonapplication to exempted children
(A)
In general
Subject to subparagraph (B), in the case of any eligible individual (as defined in  section 32(c)(1)  of the Internal Revenue Code of 1986) who has any qualifying children for the taxable year who are exempted children,  section 32  of the Internal Revenue Code of 1986 shall be applied with respect to such eligible individual as if the amendments made by subsections (a) through (e) of this section had not been enacted.
(B)
Separate application
In the case of any eligible individual (as so defined) who has—
(i)
any qualifying children for the taxable year who are not exempted children, and
(ii)
any qualifying children for such taxable year who are exempted children,
 section 32 of the Internal Revenue Code of 1986 shall be applied separately with respect to the children described in clause (i) and (pursuant to the rules described in subparagraph (A)) the children described in clause (ii).
(C)
Exempted child
For purposes of this paragraph, the term  exempted child  means an individual who is described in subparagraph (A)(ii) or (B) of section 152(c)(3).
202.
Elimination of additional exemption for dependents
(a)
In general
 Section 151(d)(5)  of the Internal Revenue Code of 1986 is amended to read as follows:
(5)
Elimination of additional exemption for dependents for taxable years after 2025
In the case of a taxable year beginning after December 31, 2025—
(A)
In general
For purposes of subsection (c), the term  exemption amount  means zero.
(B)
References
For purposes of any other provision of this title, the reduction of the exemption amount to zero under subparagraph (A) shall not be taken into account in determining whether a deduction is allowed or allowable, or whether a taxpayer is entitled to a deduction, under this section.
 .
(b)
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2025.
203.
Elimination of head of household filing status
(a)
In general
 Section 1  of the Internal Revenue Code of 1986 is amended—
(1)
by striking subsection (b),
(2)
in subsection (c)—
(A)
in the heading, by striking
and heads of households  , and
(B)
by striking  or the head of a household as defined in section 2(b) ,
(3)
in subsection (f), by striking  (b),  each place it appears,
(4)
in subsection (i)—
(A)
in paragraph (1)—
(i)
in subparagraph (A)(i), by striking  (b), ,
(ii)
in subparagraph (B)—
(I)
in clause (i), by adding  and  at the end,
(II)
by striking clause (ii), and
(III)
by redesignating clause (iii) as clause (ii), and
(iii)
in subparagraph (C), by striking  subparagraph (B)(iii)  and inserting  subparagraph (B)(ii) ,
(B)
in paragraph (2), by striking  (b), , and
(C)
in paragraph (3)—
(i)
in subparagraph (A), by striking  (b), ,
(ii)
in subparagraph (B)—
(I)
by striking clause (ii), and
(II)
by redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively, and
(iii)
in subparagraph (C), by striking  clauses (i), (ii), and (iii)  and inserting  clauses (i) and (ii) , and
(5)
in subsection (j)—
(A)
in paragraph (2)—
(i)
by striking subparagraph (B), and
(ii)
in subparagraph (C), by striking
and heads of households   in the heading,
(B)
in paragraph (3)(B)(ii), by striking  or head of household , and
(C)
in paragraph (5)(B)—
(i)
in clause (i)—
(I)
by striking subclause (II), and
(II)
by redesignating subclauses (III) and (IV) as subclauses (II) and (III), respectively, and
(ii)
in clause (ii)—
(I)
by striking subclause (II), and
(II)
by redesignating subclauses (III) and (IV) as subclauses (II) and (III), respectively.
(b)
Conforming amendments
(1)
 Section 25B(b)(2)  of the Internal Revenue Code of 1986 is amended to read as follows:
(2)
Other returns
In the case of any taxpayer not described in paragraph (1), the applicable percentage shall be determined under paragraph (1) except that such paragraph shall be applied by substituting for each dollar amount therein (as adjusted under paragraph (3)) a dollar amount equal to 50 percent of such dollar amount.
 .
(2)
Section 25E(b)(2) of such Code is amended—
(A)
in subparagraph (A), by adding  and  at the end, and
(B)
by striking subparagraphs (B) and (C) and inserting the following:
(B)
in the case of a taxpayer not described in subparagraph (A), $75,000.
 .
(3)
Section 30D(f)(10)(B) of such Code is amended—
(A)
in clause (i), by adding  and  at the end, and
(B)
by striking clauses (ii) and (iii) and inserting the following:
(ii)
in the case of a taxpayer not described in clause (i), $150,000.
 .
(4)
Section 36B(b)(3)(B)(ii)(I)(aa) of such Code is amended by striking  and heads of households .
(5)
Section 63(c) of such Code is amended—
(A)
in paragraph (2)—
(i)
in subparagraph (A)(ii), by adding  or  at the end,
(ii)
by striking subparagraph (B), and
(iii)
by redesignating subparagraph (C) as subparagraph (B),
(B)
in paragraph (4), by striking  , (2)(C),  each place it appears, and
(C)
in paragraph (7)—
(i)
by striking subparagraph (A) and inserting the following:
(A)
Increase in standard deduction
Paragraph (2)(B) shall be applied by substituting  $12,000  for  $3,000 .
 , and
(ii)
in subparagraph (B)—
(I)
in clause (i), by striking  paragraphs (2)(B) and (2)(C)  and inserting  paragraph (2)(B) , and
(II)
in clause (ii), by striking  $18,000 and $12,000 amounts  and inserting  $12,000 amount .
(6)
Section 68(b) of such Code is amended—
(A)
in paragraph (1)—
(i)
by striking subparagraph (B),
(ii)
in subparagraph (C), by striking  or head of household , and
(iii)
by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively, and
(B)
in paragraph (2), by striking  subparagraphs (A), (B), and (C)  and inserting  subparagraphs (A) and (B) .
(7)
Section 904(b)(3)(E)(i)(I) of such Code is amended by striking  (b), .
(8)
Section 6012(a)(1) of such Code is amended—
(A)
in subparagraph (A)—
(i)
in clause (i), by striking  is not a head of a household (as defined in section 2(b)), ,
(ii)
by striking clause (ii),
(iii)
by redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively, and
(iv)
in the flush text at the end, by striking  Clause (iv)  and inserting  Clause (iii) , and
(B)
in subparagraph (B)—
(i)
by striking  clause (i), (ii), or (iii)  and inserting  clause (i) or (ii) , and
(ii)
by striking  clause (iv)  and inserting  clause (iii) .
(9)
Section 6433(b)(3)(B) of such Code is amended to read as follows:
(B)
Other returns
In the case of any taxpayer who is not filing a joint return and who is not a surviving spouse (as defined in section 2(a)), the applicable dollar amount and the phaseout range shall be ½ of the amounts applicable under subparagraph (A) (as so adjusted).
 .
(10)
Section 6695(g) of such Code is amended to read as follows:
(g)
Failure To be diligent in determining eligibility for certain tax benefits
Any person who is a tax return preparer with respect to any return or claim for refund who fails to comply with due diligence requirements imposed by the Secretary by regulations with respect to determining eligibility for, or the amount of, the credit allowable by section 25A(a)(1), 32, or 36C shall pay a penalty of $500 for each such failure.
 .
(c)
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2025.
204.
Exclusion of children from credit for expenses for household and dependent care services necessary for gainful employment
(a)
In general
 Section 21  of the Internal Revenue Code of 1986 is amended—
(1)
in subsection (b)—
(A)
in paragraph (1)—
(i)
by striking subparagraph (A),
(ii)
in subparagraph (B), by inserting  who has attained age 17 and  before  who is physically or mentally incapable , and
(iii)
by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively, and
(B)
in paragraph (2), by striking subparagraph (B) and inserting the following:
(B)
Exception
Employment-related expenses described in subparagraph (A) which are incurred for services outside the taxpayer's household shall be taken into account only if incurred for the care of a qualifying individual who regularly spends at least 8 hours each day in the taxpayer's household.
 ,
(2)
in subsection (d)(2), by striking  subsection (b)(1)(C)  and inserting  subsection (b)(1)(B) , and
(3)
in subsection (e)(5)—
(A)
in subparagraph (B), by striking  is under the age of 13 or  and inserting  has attained age 17 and , and
(B)
in the flush text at the end, by striking  subparagraph (A) or (B) of subsection (b)(1) (whichever is appropriate)  and inserting  subsection (b)(1)(A) .
(b)
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2025.
205.
Denial of deduction for State and local taxes of individuals
(a)
In general
 Section 164(b)(6)  of the Internal Revenue Code of 1986 is amended to read as follows:
(6)
Limitation on deduction of certain taxes for individuals
(A)
In general
In the case of an individual, no deduction shall be allowed for taxes—
(i)
described in paragraphs (1), (2), or (3) of subsection (a), or
(ii)
described in paragraph (5) of this subsection.
(B)
Exceptions
Subparagraph (A) shall not apply to—
(i)
any foreign taxes described in subsection (a)(3), or
(ii)
any taxes described in paragraph (1) and (2) of subsection (a) which are paid or accrued in carrying on a trade or business or an activity described in section 212.
(C)
Special rule
For purposes of subparagraph (A), an amount paid in a taxable year beginning before January 1, 2026, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2025, shall be treated as paid on the last day of the taxable year for which such tax is so imposed.
 .
(b)
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2025.