What does Preamble of Foster Care Tax Credit Act do?

This bill, formally titled 'To amend the Internal Revenue Code of 1986 to create a refundable tax credit for foster families, and for other purposes,' aims to modify the Internal Revenue Code of 1986. The bill proposes the creation of a refundable tax credit for foster families.

What does SHORT TITLE. of Foster Care Tax Credit Act do?

This Act is formally titled the Foster Care Tax Credit Act.

What does FOSTER CARE TAX CREDIT. of Foster Care Tax Credit Act do?

This section establishes a new tax credit, Section 36C, for eligible taxpayers who have placed a qualifying foster child in their home. The credit amount is generally $850, but it is subject to reduction based on the taxpayer's modified adjusted gross income (MAGI) and a defined threshold amount. A 'qualifying foster child' is an eligible foster child under 17 who is a U.S. citizen, national, or resident. Taxpayers who have previously made fraudulent or reckless claims for the credit may be restricted from claiming it in subsequent years. The section requires authorized placement agencies and courts to provide information returns regarding foster child placements. Section 24(h)(4) is amended to allow taxpayers to elect not to have the paragraph apply, effectively foregoing the credit for a specific dependent. The due diligence penalty under Section 6695 now includes violations related to Section 36C. The amendments are generally applicable to calendar months beginning after December 31, 2024.

What does STUDY AND REPORT ON EMERGENCY AND SHORT-TERM FOSTER PLACEMENTS. of Foster Care Tax Credit Act do?

This section requires the Secretary of Health and Human Services to conduct a study on the costs and financial burdens on foster families experiencing multiple emergency and short-term foster placements annually. The study also focuses on challenges related to verifying and documenting children's placement in emergency and short-term placements. A short-term placement is defined as a placement lasting less than one week. The Secretary of Health and Human Services must submit a report on the study to Congress within one year of the Act's enactment.

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Foster Care Tax Credit Act

Last updated: 3/27/2025 · Introduced: 3/27/2025

Author: Erin Houchin (R-IN)

TL;DR (AI)

This bill creates a refundable tax credit of up to $850 for eligible taxpayers who provide care for a qualifying foster child under 17.
The bill requires the Department of Health and Human Services to study the financial burdens on foster families experiencing emergency and short-term foster placements.
To ensure accurate credit claims, the bill mandates information reporting from placement agencies and courts and adds due diligence penalties for violations related to the foster care tax credit.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 2 more.

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