H.R. 1308 — FISC Act

This section establishes the short title of the Act as the “Family Income Supplemental Credit Act” or the “FISC Act.”

This section establishes a monthly family income supplement program administered by the Commissioner of Social Security for pregnant women and qualified caregivers of eligible children. As background, the program provides cash payments to support pregnancy-related expenses and the care of children under 18 years old who provide no more than half of their own financial support and are U.S. citizens, nationals, or permanent resident aliens. The section allows a pregnant woman or a qualified caregiver to apply for benefits and specifies the information required in each application, including names, addresses, Social Security or tax identification numbers, income for the most recently ended taxable year, marital status, and, for pregnant applicants, the expected due date and prenatal care provider. It defines a pregnancy’s start date by the standard commonly used by licensed physicians. The section defines a qualified caregiver as an individual who is at least 18 years old, resides with the child, and provides economic support for the child, but excludes an individual found by the Commissioner, after notice and an opportunity for hearing, to have committed fraud in relation to the program unless that finding has been reversed or vacated by a court. The section entitles an approved applicant to monthly payments for the month of application and each subsequent month if the beneficiary is at least 20 weeks pregnant, and for each month after a child’s birth in which the beneficiary is a qualified caregiver. It sets the monthly payment at $800 for a pregnancy and at $400 per month for a child under 6 years old or $250 per month for a child age 6 or older. The total monthly payment is increased by 20 percent for a married pregnant woman or a beneficiary married to a qualified caregiver, and is reduced by $16.67 for each whole $1,000 of adjusted gross income above $125,000 for an individual filer or $250,000 for a joint return filer. The payment may not exceed 1/12 of the beneficiary’s and spouse’s adjusted gross income for the most recently ended taxable year. The section limits payment for an eligible child to one qualified caregiver and provides for a 90-day transition when a pregnancy results in the birth of a child. Thus, pregnancy-based benefits are deemed to convert to child-based benefits if a qualified caregiver applies within 90 days after birth and the Commissioner approves the application, and benefit payments may not be interrupted during that 90-day period.

This section repeals the child tax credit under section 24 of the Internal Revenue Code of 1986 and makes conforming amendments throughout the Code and related law to remove references to that credit, including changes to the earned income limitation under 26 U.S.C. § 26(b)(2), the employer credit for paid family and medical leave under 26 U.S.C. § 45R, the energy credit under 26 U.S.C. § 48D, the definition of dependent under 26 U.S.C. § 152, the tax-exempt organization rules under 26 U.S.C. § 501(c)(26), withholding rules under 26 U.S.C. § 3402, refund offset rules under 26 U.S.C. § 6402, deficiency procedures under 26 U.S.C. § 6211 and § 6213, the paid preparer penalty under 26 U.S.C. § 6695, and the Treasury payment statute under 31 U.S.C. § 1324. (Thus, taxpayers would no longer be able to claim the child tax credit, and related provisions that rely on the credit’s definitions or mechanics would be revised or deleted.) This section also revises the effective date so that the repeal applies to taxable years beginning after the first taxable year during which the first calendar month described in section 2(l) begins. For a taxable year that begins before that first calendar month, the child tax credit is reduced on a prorated basis to the share of the year that occurs before that month, based on the number of calendar months ending before that month divided by 12.