S.Amdt. 5787

SA 5787. Mr. BOOKER submitted an amendment intended to be proposed to
amendment SA 5453 proposed by Mr. Thune (for Mr. Graham) to the bill S.
2, to provide for reconciliation pursuant to title II of S. Con. Res.
33.; which was ordered to lie on the table; as follows:

Strike sections 202 and 203 and insert the following:

SEC. 202. ADDITIONAL DEPARTMENT OF HOMELAND SECURITY
APPROPRIATIONS.

In addition to amounts otherwise available, there is
appropriated to the Secretary of Homeland Security for fiscal
year 2026, out of any money in the Treasury not otherwise
appropriated, $2,500,000,000, to remain available until
September 30, 2029, for the purposes provided in this title
or in paragraph (3) or (7) of section 100051 of Public Law
119-21.

TITLE III--KEEP YOUR PAY ACT

SEC. 301. SHORT TITLE; ETC.

(a) Short Title.--This title may be cited as the ``Keep
Your Pay Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this title an amendment is expressed in
terms of an amendment to a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.

Subtitle A--Increase in Standard Deduction and Top Tax Rates

SEC. 311. INCREASED STANDARD DEDUCTION.

(a) In General.--Section 63(c) is amended--
(1) in paragraph (7), in the matter preceding subparagraph
(A), by striking ``In the case'' and inserting ``Subject to
paragraph (8), in the case'', and
(2) by adding at the end the following new paragraph:
``(8) Temporary increase in standard deduction.--In the
case of a taxable year beginning after December 31, 2025, and
before January 1, 2036, paragraph (7) shall be applied--
``(A) by substituting `$56,250' for `$23,625' each place it
appears,
``(B) by substituting `$37,500' for `$15,750' each place it
appears, and
``(C) in subparagraph (B)--
``(i) by substituting `2026' for `2025', and
``(ii) by substituting `2025' for `2024'.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2025.

SEC. 312. INCREASE IN INCOME TAX RATES FOR HIGHEST EARNERS.

(a) In General.--Section 1(j) is amended--
(1) in paragraph (1), by striking ``paragraphs (2) through
(6)'' and inserting ``paragraphs (2) through (7)'', and
(2) by adding at the end the following new paragraph:
``(7) Temporary increase in rates for highest earners.--In
the case of a taxable year beginning after December 31, 2025,
and before January 1, 2036, paragraph (2) shall be applied--
``(A) by substituting `41%' for `35%' each place it
appears, and
``(B) by substituting `43%' for `37%' each place it
appears.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2025.

Subtitle B--Tax Cuts for Workers and Families

SEC. 321. PERMANENT EXTENSION OF EARNED INCOME CREDIT RULES
FOR INDIVIDUALS WITHOUT QUALIFYING CHILDREN.

(a) Decrease in Minimum Age for Credit.--
(1) In general.--Subclause (II) of section 32(c)(1)(A)(ii)
is amended by striking ``age 25'' and inserting ``the
applicable minimum age''.
(2) Applicable minimum age.--Paragraph (1) of section 32(c)
is amended by adding at the end the following new
subparagraph:
``(F) Applicable minimum age.--For purposes of this
paragraph--
``(i) In general.--The term `applicable minimum age'
means--

``(I) except as otherwise provided in this clause, age 19,
``(II) in the case of a student (as defined in section
152(f)(2)), other than a qualified former foster youth or a
qualified homeless youth, age 24, and
``(III) in the case of a qualified former foster youth or a
qualified homeless youth, age 18.

``(ii) Qualified former foster youth.--For purposes of this
subparagraph, the term `qualified former foster youth' means
an individual who--

``(I) on or after the date that such individual attained
age 14, was in foster care provided under the supervision or
administration of an entity administering (or eligible to
administer) a plan under part B or part E of title IV of the
Social Security Act (without regard to whether Federal
assistance was provided with respect to such child under such
part E), and
``(II) provides (in such manner as the Secretary may
provide) consent for entities which administer a plan under
part B or part E of title IV of the Social Security Act to
disclose to the Secretary information related to the status
of such individual as a qualified former foster youth.

``(iii) Qualified homeless youth.--For purposes of this
subparagraph, the term `qualified homeless youth' means, with
respect to any taxable year, an individual who certifies, in
a manner as provided by the Secretary, that such individual
is either an unaccompanied youth who is a homeless child or
youth, or is unaccompanied, at risk of homelessness, and
self-supporting.''.
(b) Elimination of Maximum Age for Credit.--Subclause (II)
of section 32(c)(1)(A)(ii) is amended by striking ``but not
attained age 65''.
(c) Increase in Credit and Phaseout Percentages.--The table
contained in paragraph (1) of section 32(b) is amended by
striking ``7.65'' each place it appears and inserting
``15.3''.
(d) Increase in Earned Income and Phaseout Amounts.--The
table contained in subparagraph (A) of section 32(b)(2) is
amended--
(1) by striking ``$4,220'' and inserting ``$9,820'', and
(2) by striking ``$5,280'' and inserting ``$11,610''.
(e) Inflation Adjustments.--
(1) In general.--Paragraph (1) of section 32(j) is amended
to read as follows:
``(1) In general.--In the case of any taxable year
beginning after--
``(A) 2021, in the case of the dollar amount in subsection
(i)(1),
``(B) 2026, in the case of the dollar amounts in the third
row of the table in subsection (b)(2)(A), and
``(C) 2015, in any other case,
each of the dollar amounts in subsections (b)(2) and (i)(1)
shall be increased by an amount equal to the inflation
amount.''.
(2) Inflation amount.--Subsection (j) of section 32 is
amended by adding at the end the following new paragraph:
``(3) Inflation amount.--For purposes of paragraph (1), the
inflation amount with respect to any dollar amount for any
taxable year is the amount equal to--
``(A) such dollar amount, multiplied by
``(B) the percentage (if any) by which--

[[Page S2631]]

``(i) the CPI (as defined in section 1(f)(4)) for the
calendar year preceding the year in which the taxable year
begins, exceeds
``(ii) the CPI (as so defined) for--

``(I) in the case of amounts in the third row of the table
in subsection (b)(2)(A), 2025,
``(II) in the case of any other amount in subsection
(b)(2)(A), 1995,
``(III) in the case of the $5,000 amount in subsection
(b)(2)(B), 2008, and
``(IV) in the case of the $10,000 amount in subsection
(i)(1), 2020.''.

(f) Conforming Amendment.--Section 32 is amended by
striking subsection (n).
(g) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2025.

SEC. 322. APPLICATION OF EARNED INCOME CREDIT TO POSSESSIONS
OF THE UNITED STATES.

(a) Puerto Rico.--Subparagraph (B) of section 7530(a)(1) is
amended by striking ``in the case of calendar years 2021
through 2025,''.
(b) Possessions With Mirror Code Tax Systems.--Subparagraph
(B) of section 7530(b)(1) is amended by striking ``in the
case of calendar years 2021 through 2025,''.
(c) American Samoa.--Subparagraph (B) of section 7530(c)(1)
is amended by striking ``in the case of calendar years 2021
through 2025,''.

SEC. 323. ELECTION TO USE PRIOR YEAR EARNED INCOME.

(a) In General.--Paragraph (2) of section 32(c) is amended
by adding at the end the following new subparagraph:
``(C) Election to use prior year earned income.--
``(i) In general.--If the earned income of the taxpayer for
any taxable year is less than the earned income of the
taxpayer for the preceding taxable year, the credit allowed
under subsection (a) may, at the election of the taxpayer, be
determined by substituting--

``(I) such earned income for such preceding taxable year,
for
``(II) such earned income for the taxable year for which
such credit is being determined.

``(ii) Application to joint returns.--For purposes of
clause (i), in the case of a joint return, the earned income
of the taxpayer for the preceding taxable year shall be the
sum of the earned income of each spouse for such taxable
year.
``(iii) Special rules.--

``(I) Errors treated as mathematical errors.--For purposes
of section 6213, an incorrect use on a return of earned
income pursuant to clause (i) shall be treated as a
mathematical or clerical error.
``(II) No effect on determination of gross income, etc.--
Except as otherwise provided in this subparagraph, this title
shall be applied without regard to any substitution under
clause (i).''.

(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2025.

SEC. 324. ESTABLISHMENT OF REFUNDABLE CHILD TAX CREDIT WITH
MONTHLY ADVANCE PAYMENT.

(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 is amended by inserting after section 24 the
following new sections:

``SEC. 24A. MONTHLY CHILD TAX CREDIT.

``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter for the
taxable year the sum of the monthly specified child
allowances determined with respect to the taxpayer under
subsection (b) for each calendar month during such taxable
year.
``(b) Monthly Specified Child Allowance.--
``(1) In general.--For purposes of this section, the term
`monthly specified child allowance' means, with respect to
any taxpayer for any calendar month, the sum of--
``(A) $300, with respect to each specified child of such
taxpayer who will (as of the close of such month) have
attained age 6, plus
``(B) 120 percent of the dollar amount in effect for such
month under subparagraph (A), with respect to each specified
child of such taxpayer who will not (as of the close of such
month) have attained age 6.
In the case of any specified child of such taxpayer who will
not (as of the close of such month) have attained the age of
1 month, subparagraph (B) shall be applied by substituting
`800 percent' for `120 percent'.
``(2) Limitations based on modified adjusted gross
income.--
``(A) Initial reduction.--The monthly specified child
allowance otherwise determined under paragraph (1) with
respect to any taxpayer for any calendar month shall be
reduced (but not below zero) by \1/12\ of 5 percent of the
excess (if any) of the taxpayer's modified adjusted gross
income for the applicable taxable year over the initial
threshold amount in effect for such applicable taxable year.
``(B) Limitation on initial reduction.--The amount of the
reduction under subparagraph (A) shall not exceed the lesser
of--
``(i) the excess (if any) of--

``(I) the monthly specified child allowance with respect to
the taxpayer for such calendar month (determined without
regard to this paragraph), over
``(II) the amount which would be determined under subclause
(I) if the dollar amounts in effect under subparagraphs (A)
and (B) of paragraph (1) were each equal to $166.67, or

``(ii) \1/12\ of 5 percent of the excess of the secondary
threshold amount over the initial threshold amount.
``(C) Secondary reduction.--The monthly specified child
allowance otherwise determined under paragraph (1) with
respect to any taxpayer for such calendar month (determined
after the application of subparagraphs (A) and (B)) shall be
reduced (but not below zero) by \1/12\ of 5 percent of the
excess (if any) of the taxpayer's modified adjusted gross
income for the applicable taxable year over the secondary
threshold amount.
``(D) Definitions related to limitations based on modified
adjusted gross income.--For purposes of this paragraph--
``(i) Initial threshold amount.--The term `initial
threshold amount' means--

``(I) $150,000, in the case of a joint return or surviving
spouse (as defined in section 2(a)),
``(II) \1/2\ the dollar amount in effect under subclause
(I), in the case of a married individual filing a separate
return, and
``(III) $112,500, in any other case.

``(ii) Secondary threshold amount.--The term `secondary
threshold amount' means--

``(I) $400,000, in the case of a joint return or surviving
spouse (as defined in section 2(a)),
``(II) $200,000, in the case of a married individual filing
a separate return, and
``(III) $300,000, in any other case.

``(iii) Applicable taxable year.--The term `applicable
taxable year' means, with respect to any taxable year for
which the credit under this section is determined--

``(I) such taxable year, or
``(II) if the taxpayer elects the application of this
subclause (at such time and in such form and manner as the
Secretary may provide), the preceding taxable year or the
second preceding taxable year (as specified in such
election).

``(iv) Modified adjusted gross income.--The term `modified
adjusted gross income' means adjusted gross income increased
by any amount excluded from gross income under section 911,
931, or 933.
``(3) Inflation adjustments.--
``(A) Monthly specified child allowance.--In the case of
any month beginning after December 31, 2026, the $300 amount
in paragraph (1)(A) shall be increased by an amount equal
to--
``(i) such dollar amount, multiplied by--
``(ii) the percentage (if any) by which--

``(I) the CPI (as defined in section 1(f)(4)) for the
calendar year preceding the calendar year in which such month
begins, exceeds
``(II) the CPI (as so defined) for calendar year 2025.

``(B) Initial threshold amount.--In the case of any taxable
year beginning after December 31, 2025, the dollar amounts in
subclauses (I) and (III) of paragraph (2)(D)(i) shall each be
increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the percentage (if any) which would be determined
under subparagraph (A)(ii) if subclause (II) thereof were
applied by substituting `2023' for `2025'.
``(C) Rounding.--
``(i) Monthly specified child allowance.--Any increase
under subparagraph (A) which is not a multiple of $10 shall
be rounded to the nearest multiple of $10.
``(ii) Initial threshold amount.--Any increase under
subparagraph (B) which is not a multiple of $5,000 shall be
rounded to the nearest multiple of $5,000.
``(c) Specified Child.--For purposes of this section--
``(1) In general.--The term `specified child' means, with
respect to any taxpayer for any calendar month, an
individual--
``(A) who has the same principal place of abode as the
taxpayer for more than one-half of such month,
``(B) who is younger than the taxpayer and will not, as of
the close of such month, have attained age 18,
``(C) who receives care from the taxpayer during such month
that is not compensated,
``(D) who is not the spouse of the taxpayer at any time
during such month, and
``(E) who either--
``(i) is a citizen, national, or resident of the United
States, or
``(ii) if the taxpayer is a citizen or national of the
United States, such individual is a legally adopted
individual of such taxpayer or is lawfully placed with such
taxpayer for legal adoption by such taxpayer.
``(2) Certain individuals ineligible.--In the case of an
individual who is a specified child with respect to another
taxpayer for any calendar month, such individual shall be
treated for such calendar month as having no specified
children.
``(3) Care from the taxpayer.--
``(A) In general.--Except as otherwise provided by the
Secretary, whether any individual receives care from the
taxpayer (within the meaning of paragraph (1)(C)) shall be
determined on the basis of facts and circumstances with
respect to the following factors:
``(i) The supervision provided by the taxpayer regarding
the daily activities and needs of the individual.
``(ii) The maintenance by the taxpayer of a secure
environment at which the individual resides.
``(iii) The provision or arrangement by the taxpayer of,
and transportation by the taxpayer to, medical care at
regular intervals and as required for the individual.
``(iv) The involvement by the taxpayer in, and financial
and other support by the taxpayer for, educational or similar
activities of the individual.
``(v) Any other factor that the Secretary determines to be
appropriate to determine

[[Page S2632]]

whether the individual receives care from the taxpayer.
``(B) Determination of whether care is compensated.--For
purposes of determining if care is compensated within the
meaning of paragraph (1)(C), compensation from the Federal
Government, a State or local government, a Tribal government,
or any possession of the United States shall not be taken
into account.
``(4) Application of tie-breaker rules.--
``(A) In general.--Except as provided in subparagraph (D),
if any individual would (but for this paragraph) be a
specified child of 2 or more taxpayers for any month, such
individual shall be treated as the specified child only of
the taxpayer who is--
``(i) the parent of the individual (or, if such individual
would (but for this paragraph) be a specified child of 2 or
more parents of the individual for such month, the parent of
the individual determined under subparagraph (B)),
``(ii) if the individual is not a specified child of any
parent of the individual (determined without regard to this
paragraph), the specified relative of the individual with the
highest adjusted gross income for the taxable year which
includes such month, or
``(iii) if the individual is neither a specified child of
any parent of the individual nor a specified child of any
specified relative of the individual (in both cases
determined without regard to this paragraph), the taxpayer
with the highest adjusted gross income for the taxable year
which includes such month.
``(B) Tie-breaker among parents.--If any individual would
(but for this paragraph) be the specified child of 2 or more
parents of the individual for any month, such child shall be
treated only as the specified child of--
``(i) the parent with whom the child resided for the
longest period of time during such month, or
``(ii) if the child resides with both parents for the same
amount of time during such month, the parent with the highest
adjusted gross income for the taxable year which includes
such month.
``(C) Specified relative.--For purposes of this paragraph,
the term `specified relative' means an individual who is--
``(i) an ancestor of a parent of the specified child,
``(ii) a brother or sister of a parent of the specified
child, or
``(iii) a brother, sister, stepbrother, or stepsister of
the specified child.
``(D) Certain parents or specified relatives not taken into
account.--This paragraph shall be applied without regard to
any parent or specified relative of an individual for any
month if--
``(i) such parent or specified relative elects to have such
individual not be treated as a specified child of such parent
or specified relative for such month,
``(ii) in the case of a parent of such individual, the
adjusted gross income of the taxpayer (with respect to whom
such individual would be treated as a specified child after
application of this subparagraph) for the taxable year which
includes such month is higher than the highest adjusted gross
income of any parent of the individual for any taxable year
which includes such month (determined without regard to any
parent with respect to whom such individual is not a
specified child, determined without regard to subparagraphs
(A) and (B) and after application of this subparagraph), and
``(iii) in the case of a specified relative of such
individual, the adjusted gross income of the taxpayer (with
respect to whom such individual would be treated as a
specified child after application of this subparagraph) for
the taxable year which includes such month is higher than the
highest adjusted gross income of any parent and any specified
relative of the individual for any taxable year which
includes such month (determined without regard to any parent
and any specified relative with respect to whom such
individual is not a specified child, determined without
regard to subparagraphs (A) and (B) and after application of
this subparagraph).
``(E) Treatment of joint returns.--For purposes of this
paragraph, with respect to any month, the adjusted gross
income of each person who files a joint return for the
taxable year which includes such month is the total adjusted
gross income shown on the joint return for the taxable year.
``(F) Parent.--Except as otherwise provided by the
Secretary, the term `parent' shall have the same meaning as
when used in section 152(c)(4).
``(5) Treatment of temporary absences.--Except as provided
in regulations or other guidance issued by the Secretary, for
purposes of this subsection--
``(A) In general.--In the case of any individual's
temporary absence from such individual's principal place of
abode, each day composing the temporary absence shall--
``(i) be treated as a day at such individual's principal
place of abode,
``(ii) be treated as satisfying the care requirement
described in paragraph (1)(C) for each day described in
clause (i), and
``(iii) not be treated as a day at any other location.
``(B) Temporary absence.--For purposes of subparagraph (A),
an absence shall be treated as temporary if--
``(i) the individual would have resided at the place of
abode but for the absence, and
``(ii) under the facts and circumstances, it is reasonable
to assume that the individual will return to reside at the
place of abode.
``(6) Special rule for divorced parents, etc.--Rules
similar to the rules section 152(e) shall apply for purposes
of this subsection.
``(7) Eligibility determined on basis of presumptive
eligibility.--
``(A) In general.--If a period of presumptive eligibility
is established under section 7527A(c) with respect to any
taxpayer and child--
``(i) such child shall be treated as the specified child of
such taxpayer for any month in such period of presumptive
eligibility, and
``(ii) such child shall not be treated as the specified
child of any other taxpayer with respect to whom a period of
presumptive eligibility has not been established for any such
month.
``(B) Ability of credit claimants to establish presumptive
eligibility.--Nothing in section 7527A(c) shall be
interpreted to preclude a taxpayer from establishing a period
of presumptive eligibility (including any period described in
subparagraph (D) with respect to which payment could be made)
with respect to any specified child for purposes of this
section solely because such taxpayer affirmatively elects not
to receive monthly advance child payments under section
7527A.
``(C) Exception for income-based tie-breaker rules.--If a
period of presumptive eligibility is established under
section 7527A(c) for any individual with respect to any
taxpayer and such individual is not the specified child of
such taxpayer for any month in such period by reason of such
taxpayer failing to be described in clause (i), (ii), or
(iii) of paragraph (4)(A) for the taxable year which includes
such month, subparagraph (A) shall not apply with respect to
such month.
``(D) Treatment of certain retroactive payments.--If any
payment is made under subparagraph (A) or (B) of section
7527A(f)(3) or paragraph (1) or (2) of section 7527A(g), with
respect to any taxpayer and child for any period, such period
shall be treated as a period of presumptive eligibility
established under section 7527A(c) with respect to such
taxpayer and child for purposes of applying subparagraph (A).
``(E) Fraud and intentional disregard of rules or
regulations.--If the Secretary determines that the taxpayer
committed fraud or intentionally disregarded rules or
regulations in establishing or maintaining any period of
presumptive eligibility, the months with respect to which
such fraud or intentional disregard relates shall not be
treated as a period of presumptive eligibility for purposes
of subparagraph (A).
``(d) Credit Refundable.--If the taxpayer (in the case of a
joint return, either spouse) has a principal place of abode
(determined as provided in section 32) in the United States
or Puerto Rico for more than one-half of any calendar month
during the taxable year, so much of the credit otherwise
allowed under subsection (a) as is attributable to monthly
specified child allowances with respect to any such calendar
month shall be allowed under subpart C (and not allowed under
this subpart).
``(e) Identification Requirements.--
``(1) Qualifying child identification requirement.--No
credit shall be allowed under this section to a taxpayer with
respect to any qualifying child unless the taxpayer includes
the name and taxpayer identification number of such
qualifying child on the return of tax for the taxable year
and such taxpayer identification number was issued on or
before the due date for filing such return.
``(2) Taxpayer identification requirement.--No credit shall
be allowed under this section if the taxpayer identification
number of the taxpayer was issued after the due date for
filing the return for the taxable year.
``(f) Restrictions on Taxpayers Who Improperly Claimed
Credit or Improperly Received Monthly Advance Child
Payment.--
``(1) Taxpayers making prior fraudulent or reckless
claims.--
``(A) In general.--No credit shall be allowed under this
section for any taxable year (and no payment shall be made
under section 7527A for any month) in the disallowance
period.
``(B) Disallowance period.--For purposes of subparagraph
(A), the disallowance period is--
``(i) the period of 120 calendar months after the most
recent calendar month for which there was a final
determination that the taxpayer's claim of credit under this
section or section 24 (or payment received under section
7527A) was due to fraud, and
``(ii) the period of 24 calendar months after the most
recent calendar month for which there was a final
determination that the taxpayer's claim of credit under this
section or section 24 (or payment received under section
7527A) 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 or
section 24 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
(and no payment shall be made under section 7527A for any
subsequent month) unless the taxpayer provides such
information as the Secretary may require to demonstrate
eligibility for such credit.
``(3) Coordination with possessions of the united states.--
For purposes of this subsection, a taxpayer's claim of credit
under this section or section 24 (or payment received under
section 7527A) includes a claim

[[Page S2633]]

of credit under this section or section 24 of the income tax
law of any jurisdiction other than the United States (or
similar payment received under section 7527A of such income
tax law), and a claim made or a payment received from
American Samoa pursuant to a plan described in subsection
(h)(3)(B) or section 24(k)(3)(B).
``(g) Reconciliation of Credit and Monthly Advance Child
Payments.--
``(1) In general.--The amount otherwise determined under
subsection (a) with respect to any taxpayer for any taxable
year shall be reduced (but not below zero) by the aggregate
amount of payments made under section 7527A to such taxpayer
for one or more calendar months in such taxable year. Any
failure to so reduce the credit shall be treated as arising
out of a mathematical or clerical error and assessed
according to section 6213(b)(1).
``(2) Increase in tax equal to excess advance payments in
certain circumstances.--If the aggregate amount of payments
made to the taxpayer under section 7527A for one or more
calendar months in such taxable year exceeds the amount
allowed as a credit under subpart C by reason of this section
with respect to such taxpayer for such taxable year (without
regard to paragraph (1) of this subsection), the tax imposed
by this chapter for such taxable year shall be increased by
so much of such excess as is attributable to one or more of
the following:
``(A) Fraud, or reckless or intentional disregard of rules
and regulations, by the taxpayer.
``(B) Changes in the taxpayer's modified adjusted gross
income or filing status that affect the application of the
limitation imposed by subsection (b)(2).
``(C) Payments under section 7527A which were made for
months which were not part of a period of presumptive
eligibility.
``(D) A failure to be the taxpayer described in clause (i),
(ii), or (iii) of subsection (c)(4)(A).
``(E) A failure to satisfy the requirements of subsection
(d).
``(F) A failure to satisfy the requirements of paragraphs
(1) or (2) of subsection (e), except that a failure to
satisfy the requirements of subsection (e)(1) shall not be
taken into account under this subparagraph if the taxpayer
demonstrates to the satisfaction of the Secretary that it is
reasonable to expect that the qualifying child will be issued
a taxpayer identification number and that the delay in such
issuance was due to reasonable cause and not willful neglect.
``(G) Such other circumstances as the Secretary identifies
for purposes of this subparagraph to facilitate the
administration and enforcement by the Secretary of section
7527A, to minimize the amount of advance payments made under
section 7527A to ineligible individuals, and to prevent
abuse.
``(H) Payments subject to treatment as excess advance
payments after notice under section 7527A(j)(2).
``(3) Joint returns.--Except as otherwise provided by the
Secretary, in the case of an advance payment made under
section 7527A with respect to a joint return, half of such
payment shall be treated as having been made to each
individual filing such return.
``(4) Coordination with possessions of the united states.--
For purposes of this subsection, payments made under section
7527A include payments made by any jurisdiction other than
the United States under section 7527A of the income tax law
of such jurisdiction, and advance payments made by American
Samoa pursuant to a plan described in subsection (h)(3)(B).
Any increase in tax imposed on a taxpayer by reason of
paragraph (2) of the income tax law of a jurisdiction other
than the United States shall be considered to reduce the
aggregate amount of payments made to such taxpayer by such
jurisdiction. In carrying out this section, the Secretary
shall coordinate with each possession of the United States to
prevent any application of this paragraph that is
inconsistent with the purposes of this subsection.
``(h) Application of Credit in Possessions.--
``(1) Mirror code possessions.--
``(A) In general.--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 calendar years after 2025. Such amounts shall be
determined by the Secretary based on information provided by
the government of the respective possession.
``(B) Coordination with credit allowed against united
states income taxes.--No credit shall be allowed under this
section for any taxable year to any individual to whom a
credit is allowable against taxes imposed by a possession of
the United States with a mirror code tax system by reason of
the application of this section in such possession for such
taxable year.
``(C) Mirror code tax system.--For purposes of this
paragraph, 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.
``(2) Cross references related to application of credit to
residents of puerto rico.--
``(A) For application of refundable credit to residents of
Puerto Rico, see subsection (d).
``(B) For application of advance payment to residents of
Puerto Rico, see section 7527A(b)(5).
``(3) American samoa.--
``(A) In general.--The Secretary shall pay to American
Samoa amounts estimated by the Secretary as being equal to
the aggregate benefits that would have been provided to
residents of American Samoa by reason of the application of
this section for taxable years beginning in calendar years
after 2025 if the provisions of this section had been in
effect in American Samoa (applied as if American Samoa were
the United States and without regard to the application of
this section to residents of Puerto Rico under subsection
(d)).
``(B) Distribution requirement.--Subparagraph (A) shall not
apply unless American Samoa has a plan, which has been
approved by the Secretary, under which American Samoa will
promptly distribute such payments to its residents.
``(C) Coordination with credit allowed against united
states income taxes.--
``(i) In general.--In the case of a taxable year with
respect to which a plan is approved under subparagraph (B),
this section (other than this subsection) shall not apply to
any individual eligible for a distribution under such plan.
``(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),
subsection (d) shall be applied by substituting `, Puerto
Rico, or American Samoa' for `or Puerto Rico'.
``(4) 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.
``(i) Regulations.--The Secretary shall issue such
regulations or other guidance as the Secretary determines
necessary or appropriate to carry out the purposes of this
section, including regulations or other guidance--
``(1) for determining whether an individual receives care
from a taxpayer for purposes of subsection (c)(1)(C), and
``(2) to coordinate or modify the application of this
section, section 24, and section 7527A in the case of any
taxpayer--
``(A) whose taxable year is other than a calendar year,
``(B) whose filing status for a taxable year is different
from the status used for determining one or more monthly
payments under section 7527A during such taxable year, or
``(C) whose principal place of abode for any month is
different from the principal place of abode used for
determining the monthly payment under section 7527A for such
month.

``SEC. 24B. CREDIT FOR CERTAIN OTHER DEPENDENTS.

``(a) In General.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
an amount equal to $500 with respect to each specified
dependent of such taxpayer for such taxable year.
``(b) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--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 the threshold amount.
``(2) Threshold amount.--For purposes of this subsection,
the term `threshold amount' means--
``(A) $400,000, in the case of a joint return or surviving
spouse (as defined in section 2(a)),
``(B) $200,000, in the case of a married individual filing
a separate return, and
``(C) $300,000, in any other case.
``(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.
``(c) Specified Dependent.--For purposes of this section,
the term `specified dependent' means, with respect to any
taxpayer for any taxable year, any dependent of such taxpayer
(as defined in section 152) for such taxable year unless such
dependent--
``(1) is a specified child of the taxpayer, or any other
taxpayer, for any month during such taxable year, or
``(2) 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) Special Rule for Taxable Year Child Attains Age 18.--
If any dependent of the taxpayer attains age 18 during the
taxable year--
``(1) whether such dependent is a specified dependent shall
be determined without regard to paragraph (1) of subsection
(c), and
``(2) with respect to such dependent, subsection (a) shall
be applied by substituting an amount for `$500' that bears
the same ratio to $500 as--
``(A) the excess of--
``(i) 12, over
``(ii) the number of months during such taxable year with
respect to which such dependent is a specified child of the
taxpayer or any other taxpayer, bears to
``(B) 12.

[[Page S2634]]

``(e) Identification Requirements.--Rules similar to the
rules of section 24A(e) shall apply for purposes of this
section.
``(f) Taxable Year Must Be Full Taxable Year.--Except in
the case of a taxable year closed by reason of the death of
the taxpayer, no credit shall be allowable under this section
in the case of a taxable year covering a period of less than
12 months.
``(g) Regulations.--The Secretary shall issue such
regulations or other guidance as the Secretary determines
necessary or appropriate to carry out the purposes of this
section.''.
(b) Monthly Payment of Child Tax Credit.--Section 7527A is
amended to read as follows:

``SEC. 7527A. MONTHLY PAYMENTS OF CHILD TAX CREDIT.

``(a) In General.--The Secretary shall pay to each
taxpayer, during each calendar month which is during a period
of presumptive eligibility with respect to the taxpayer and
any child, an amount equal to the monthly advance child
payment determined with respect to such taxpayer for such
month.
``(b) Monthly Advance Child Payment.--The term `monthly
advance child payment' means, with respect to any taxpayer
for any calendar month, the amount (if any) which is
estimated by the Secretary as being equal to the monthly
specified child allowance which would be determined under
section 24A(b) with respect to such taxpayer for such
calendar month if--
``(1) the only specified children of such taxpayer for such
calendar month are the specified children of such taxpayer
for the reference month (determined without regard to section
24A(c)(7)),
``(2) the ages of such children (and the status of such
children as specified children) are determined for such
calendar month by taking into account the passage of time
since such reference month,
``(3) each child is only taken into account as a specified
child for such calendar month if such calendar month is
during a period of presumptive eligibility with respect to
the taxpayer and such child,
``(4) the limitations of section 24A(b)(2) were applied
with respect to the reference taxable year rather than with
respect to the applicable taxable year, and
``(5) no monthly specified child allowance were determined
with respect to such taxpayer for such calendar month unless
the taxpayer (in the case of a joint return, either spouse)
has a principal place of abode (determined as provided in
section 32) in the United States or Puerto Rico for more than
one-half of the reference month.
``(c) Period of Presumptive Eligibility.--
``(1) In general.--For purposes of this section, the term
`period of presumptive eligibility' means, with respect to
any taxpayer and any child, the period--
``(A) beginning with the calendar month following the
calendar month during which the taxpayer provides the
Secretary with sufficient information for the Secretary to--
``(i) determine that such child was a specified child of
the taxpayer for the reference month (determined without
regard to section 24A(c)(7)), and
``(ii) estimate the monthly advance child payment for such
calendar month, and
``(B) ending with the earliest of--
``(i) the month beginning immediately after the month on
which the Secretary sends the taxpayer a written notice that
the taxpayer's period of presumptive eligibility with respect
to such child is being terminated by reason of information
known to the Secretary (including a failure to provide annual
information under paragraph (2)) which casts doubt on such
taxpayer's status as being allowed the monthly specified
child allowance under section 24A for such child (determined
without regard to section 24A(c)(7)) with respect to one or
more months following the reference month,
``(ii) any month with respect to which the taxpayer
notifies the Secretary that such taxpayer is not allowed a
monthly specified child allowance for such month under
section 24A(b) (determined without regard to section
24A(c)(7)), and
``(iii) the month beginning immediately before the first
month of a new period of presumptive eligibility with respect
to such taxpayer and such child which is established on the
basis of a reference month more recent than the reference
month with respect to which such prior period was established
(including on the basis of an annual renewal described in
paragraph (2)).
``(2) Annual renewal.--The Secretary shall terminate a
taxpayer's period of presumptive eligibility with respect to
any child under paragraph (1)(B)(i) unless such taxpayer
provides information sufficient to establish a new period of
presumptive eligibility with respect to such child (as
described in paragraph (1)(B)(ii)) on an annual basis.
``(3) Automatic eligibility for birth of child.--The
Secretary shall issue regulations or other guidance to
establish procedures pursuant to which, to the maximum extent
administratively practicable--
``(A) a parent of a child born during a calendar month
shall be treated as automatically establishing a period of
presumptive eligibility with respect to such child,
``(B) the month for which such period begins, and the month
by which the first annual renewal described in paragraph (2)
must be completed, are determined, and
``(C) if the first monthly advance child payment with
respect to such child is made after the calendar month in
which such child is born, such payment is increased to
properly take into account the months in such period of
presumptive eligibility which precede the month in which such
payment is made.
``(4) Presumptive eligibility based on certain government
programs.--The Secretary shall issue regulations or other
guidance to establish procedures under which--
``(A) based on information provided to the Secretary by one
or more government entities, a parent or specified relative
of a child is treated as automatically establishing a period
of presumptive eligibility with respect to such child, and
``(B) the month for which such period begins, the month by
which the first annual renewal described in paragraph (2)
must be completed, and any additional circumstances under
which such period will terminate, are determined.
``(5) Taxpayer responsibility to notify secretary.--In the
event that any taxpayer is not allowed a monthly specified
child allowance under section 24A(b) (determined without
regard to section 24A(c)(7)) for any month in a period of
presumptive eligibility with respect to such taxpayer, such
taxpayer shall notify the Secretary under paragraph
(1)(B)(ii) at such time and in such manner as the Secretary
may provide.
``(6) Transition rule.--With respect periods of presumptive
eligibility beginning during the first 6 months to which this
section applies, the Secretary shall issue regulations or
other guidance to establish procedures pursuant to which--
``(A) based on information known to the Secretary including
returns of tax for either of the last 2 taxable years ending
before such month, a parent or specified relative of a child
is treated as automatically establishing a period of
presumptive eligibility with respect to such child, and
``(B) the month for which such period begins, the month by
which the first annual renewal described in paragraph (2)
must be completed, and any additional circumstances under
which such period will terminate, are determined.
``(d) Determination of Reference Month and Reference
Taxable Year.--For purposes of this section--
``(1) Reference month.--The term `reference month' means,
with respect to any calendar month in a period of presumptive
eligibility with respect to a taxpayer, the most recent of--
``(A) in the case of a taxpayer who filed a return of tax
for the last taxable year ending before such calendar month,
the last month of such taxable year,
``(B) in the case of a taxpayer who filed a return of tax
for the taxable year preceding the taxable year described in
subparagraph (A), the last month of such preceding taxable
year, and
``(C) in the case of a taxpayer who otherwise provides the
information referred to in subsection (c)(1)(A), the month
with respect to which such information is provided.
``(2) Reference taxable year.--The term `reference taxable
year' means, with respect to any calendar month in a period
of presumptive eligibility with respect to a taxpayer--
``(A) if the reference month with respect to such calendar
month is determined under subparagraph (A) or (B) of
paragraph (1), the taxable year referred to in such
subparagraph, respectively, and
``(B) if the reference month with respect to such calendar
month is determined under subparagraph (1)(C), the last
taxable year ending before such reference month.
``(e) Methods of Providing Information To Establish a
Period of Presumptive Eligibility.--
``(1) In general.--The Secretary shall ensure the
information described in subsection (c)(1)(A) may be provided
on the return of tax for the taxable year ending before the
calendar year which includes the month for which such period
would begin, through the on-line portal described in
paragraph (2), or in such other manner as the Secretary may
provide.
``(2) On-line information portal.--The Secretary shall
establish an on-line portal (available in multiple languages)
which allows taxpayers to--
``(A) subject to such restrictions as the Secretary may
provide, elect to begin or cease receiving payments under
this section, and
``(B) provide the information described in subsection
(c)(1)(A).
``(f) Resolution of Competing Claims of Presumptive
Eligibility With Respect to Same Child.--
``(1) In general.--If there is a period of presumptive
eligibility with respect to any taxpayer and child (hereafter
referred to as the `original claim'), a period of presumptive
eligibility would (without regard to this subsection) be
established with respect to another taxpayer and such child
(hereafter referred to as the `challenge claim'), and the
period of such challenge claim would overlap with the period
of such original claim--
``(A) such challenge claim shall not be taken into account
under this section unless the reference month with respect to
which the challenge claim would be established is at least as
recent as the reference month with respect to which the
original claim is established,
``(B) such challenge claim shall not begin before the
original claim is terminated, and

[[Page S2635]]

``(C) the Secretary shall establish procedures under which
the Secretary expeditiously adjudicates such claims on the
basis of the most recent feasible reference month.
``(2) Provisions related to adjudication.--
``(A) Challenge claim must relate to at least 3 months
prospectively.--The procedures established under paragraph
(1)(C) shall require that the taxpayer establishing the
challenge claim express a reasonable expectation and intent
that such taxpayer would be allowed a monthly specified child
allowance under section 24A(b) (determined without regard to
section 24A(c)(7)) for at least the first 2 months following
the reference month referred to in paragraph (1)(C).
``(B) Expedited process; appeals.--The procedures
established under paragraph (1)(C) shall include--
``(i) an expedited process for taxpayers who meet such
requirements as the Secretary may establish for such
expedited process, and
``(ii) procedures for adjudicating an appeal of an adverse
decision.
``(C) Information receipt and coordination.--For purposes
of obtaining information relevant to any adjudication under
this paragraph, the Secretary may enter into agreements to
receive information from, and otherwise coordinate with--
``(i) Federal agencies (including the Social Security
Administration and the Department of Agriculture),
``(ii) any State, local government, Tribal government, or
possession of the United States, and
``(iii) any other individual or entity that the Secretary
determines to be appropriate for such purposes.
``(D) Adjudication not treated as assessment.--Any
adjudication under this paragraph shall not be treated as an
assessment described in section 6201.
``(E) Adjudication not treated as inspection of taxpayer's
books of account.--The inspection of a taxpayer's books of
account in connection with any adjudication under this
paragraph shall not be treated as an examination or
inspection of a taxpayer's books of account for purposes of
section 7605(b).
``(3) Retroactive payments related to adjudication.--
``(A) Delay in establishment of challenge claim.--If the
challenge claim is established pursuant to the procedures
established under paragraph (1)(C), the Secretary shall make
a one-time payment to the taxpayer with respect to such claim
equal to the aggregate amount of increases in the monthly
advance child payments which would have been made to such
taxpayer if such challenge claim had been allowed to take
effect without regard to this subsection. Any payment under
this subparagraph shall be in addition to any payment made
under subsection (g).
``(B) Termination and reinstatement of original claim.--If,
pursuant to the procedures established under paragraph
(1)(C), the original claim is terminated under subsection
(c)(1)(B)(i) and a new period of presumptive eligibility is
subsequently established pursuant to such procedures with
respect the same taxpayer and child as for such original
claim, the Secretary shall make a one-time payment to the
taxpayer with respect to such claim equal to the aggregate
amount of increases in the monthly advance child payments
which would have been made to such taxpayer if such original
claim had never been terminated.
``(g)  Rules Related to Grace Periods and Hardships.--
``(1) Automatic grace period.--
``(A) In general.--If a taxpayer establishes a period of
presumptive eligibility with respect to any child, elects the
application of this paragraph, and demonstrates to the
satisfaction of the Secretary that such taxpayer would be
allowed a monthly specified child allowance under section
24A(b) (determined without regard to section 24A(c)(7)) for
one or more of the 3 months immediately preceding the first
month of such period, the Secretary shall make a one-time
payment to the taxpayer equal to the aggregate amount of
increases in the monthly advance child payments which would
have been made to such taxpayer if such months were part of
such period. The preceding sentence shall not apply to the
extent that the Secretary determines that the failure to
establish the period of presumptive eligibility with respect
to such child for any such month was due to fraud or reckless
or intentional disregard of rules and regulations.
``(B) Limitation.--Subparagraph (A) shall not apply with
respect to any taxpayer more than once during any 36-month
period.
``(2) Hardship.--If a taxpayer establishes a period of
presumptive eligibility with respect to any child, elects the
application of this paragraph (and does not elect the
application of paragraph (1) with respect to the
establishment of such period), demonstrates to the
satisfaction of the Secretary that such taxpayer would be
allowed a monthly specified child allowance under section
24A(b) (determined without regard to section 24A(c)(7)) for
one or more of the 6 months immediately preceding the first
month of such period, and the Secretary determines that the
failure to establish the period of presumptive eligibility
with respect to such child for such months was due to
domestic violence, serious illness, natural disaster, or any
other hardship, the Secretary shall make a one-time payment
to the taxpayer equal to the aggregate amount of increases in
the monthly advance child payments which would have been made
to such taxpayer if such months were part of such period.
``(3) Coordination with retroactive payment for delay in
establishment of challenge claim.--For purposes of applying
paragraph (1) or (2) with respect to any challenge claim to
which subsection (f)(3)(A) applies, the period of presumptive
eligibility shall be treated as including the period for
which payment is made under such subsection.
``(h) Provisions Related to Form, Manner, and Treatment of
Payments.--
``(1) Application of electronic funds payment
requirement.--The payments made by the Secretary under
subsection (a) shall be made by electronic funds transfer to
the same extent and in the same manner as if such payments
were Federal payments not made under this title.
``(2) Delivery of payments.--Notwithstanding any other
provision of law, the Secretary may certify and disburse
refunds payable under this section electronically to--
``(A) any account to which the payee authorized, on or
after January 1, 2025, the delivery of a refund of taxes
under this title or of a Federal payment (as defined in
section 3332 of title 31, United States Code),
``(B) any account belonging to a payee from which that
individual, on or after January 1, 2025, made a payment of
taxes under this title, or
``(C) any Treasury-sponsored account (as defined in section
208.2 of title 31, Code of Federal Regulations).
``(3) Waiver of certain rules.--Notwithstanding section
3325 of title 31, United States Code, or any other provision
of law, with respect to any payment of a refund under this
section, a disbursing official in the executive branch of the
United States Government may modify payment information
received from an officer or employee described in section
3325(a)(1)(B) of such title for the purpose of facilitating
the accurate and efficient delivery of such payment. Except
in cases of fraud or reckless neglect, no liability under
sections 3325, 3527, 3528, or 3529 of title 31, United States
Code, shall be imposed with respect to payments made under
this paragraph.
``(4) Exception from reduction or offset.--Any applicable
payment (as defined in paragraph (5)(E)(iii)) shall not be--
``(A) subject to reduction or offset pursuant to section
3716 or 3720A of title 31, United States Code,
``(B) subject to reduction or offset pursuant to subsection
(c), (d), (e), or (f) of section 6402, or
``(C) reduced or offset by other assessed Federal taxes
that would otherwise be subject to levy or collection.
``(5) Assignment of benefits.--
``(A) In general.--The right of any person to any
applicable payment shall not be transferable or assignable,
at law or in equity, and no applicable payment shall be
subject to, execution, levy, attachment, garnishment, or
other legal process, or the operation of any bankruptcy or
insolvency law.
``(B) Encoding of payments.--In the case of an applicable
payment described in subparagraph (E)(iii)(I) that is paid
electronically by direct deposit through the Automated
Clearing House (ACH) network, the Secretary of the Treasury
(or the Secretary's delegate) shall--
``(i) issue the payment using a unique identifier that is
reasonably sufficient to allow a financial institution to
identify the payment as an applicable payment, and
``(ii) further encode the payment pursuant to the same
specifications as required for a benefit payment defined in
section 212.3 of title 31, Code of Federal Regulations.
``(C) Garnishment.--
``(i) Encoded payments.--In the case of a garnishment order
that applies to an account that has received an applicable
payment that is encoded as provided in subparagraph (B), a
financial institution shall follow the requirements and
procedures set forth in part 212 of title 31, Code of Federal
Regulations, except--

``(I) notwithstanding section 212.4 of title 31, Code of
Federal Regulations (and except as provided in subclause
(II)), a financial institution shall not fail to follow the
procedures of sections 212.5 and 212.6 of such title with
respect to a garnishment order merely because such order has
attached, or includes, a notice of right to garnish Federal
benefits issued by a State child support enforcement agency,
and
``(II) a financial institution shall not, with regard to
any applicable payment, be required to provide the notice
referenced in sections 212.6 and 212.7 of title 31, Code of
Federal Regulations.

``(ii) Other payments.--In the case of a garnishment order
(other than an order that has been served by the United
States) that has been received by a financial institution and
that applies to an account into which an applicable payment
that has not been encoded as provided in subparagraph (B) has
been deposited electronically on any date during the lookback
period or into which an applicable payment that has been
deposited by check on any date in the lookback period, the
financial institution, upon the request of the account
holder, shall treat the amount of the funds in the account at
the time of the request, up to the amount of the applicable
payment (in addition to any amounts otherwise protected under
part 212 of title 31, Code of Federal Regulations), as exempt
from a garnishment order without requiring the

[[Page S2636]]

consent of the party serving the garnishment order or the
judgment creditor.
``(iii) Liability.--A financial institution that acts in
good faith in reliance on clauses (i) or (ii) shall not be
subject to liability or regulatory action under any Federal
or State law, regulation, court or other order, or regulatory
interpretation for actions concerning any applicable
payments.
``(D) No reclamation rights.--This paragraph shall not
alter the status of applicable payments as tax refunds or
other nonbenefit payments for purpose of any reclamation
rights of the Department of the Treasury or the Internal
Revenue Service as per part 210 of title 31, Code of Federal
Regulations.
``(E) Definitions.--For purposes of this paragraph--
``(i) Account holder.--The term `account holder' means a
natural person whose name appears in a financial
institution's records as the direct or beneficial owner of an
account.
``(ii) Account review.--The term `account review' means the
process of examining deposits in an account to determine if
an applicable payment has been deposited into the account
during the lookback period. The financial institution shall
perform the account review following the procedures outlined
in section 212.5 of title 31, Code of Federal Regulations and
in accordance with the requirements of section 212.6 of title
31, Code of Federal Regulations.
``(iii) Applicable payment.--The term `applicable payment'
means--

``(I) any payment made to an individual under this section
(other than any payment made pursuant to paragraph (6)),
``(II) any advance payment made by a possession of the
United States with a mirror code tax system (as defined in
section 24(h)) pursuant to an election under paragraph (6)(B)
which corresponds to a payment described in subclause (I),
and
``(III) any advance payment made by American Samoa pursuant
to a program for making such payments which is described in
paragraph (6)(C)(ii).

``(iv) Garnishment.--The term `garnishment' means
execution, levy, attachment, garnishment, or other legal
process.
``(v) Garnishment order.--The term `garnishment order'
means a writ, order, notice, summons, judgment, levy, or
similar written instruction issued by a court, a State or
State agency, a municipality or municipal corporation, or a
State child support enforcement agency, including a lien
arising by operation of law for overdue child support or an
order to freeze the assets in an account, to effect a
garnishment against a debtor.
``(vi) Lookback period.--The term `lookback period' means
the two month period that begins on the date preceding the
date of account review and ends on the corresponding date of
the month two months earlier, or on the last date of the
month two months earlier if the corresponding date does not
exist.
``(6) Application of advance payments in the possessions of
the united states.--
``(A) Puerto rico.--
``(i) For application of child tax credit to residents of
Puerto Rico, see section 24A(d).
``(ii) For application of monthly advance child payments to
residents of Puerto Rico, see subsection (b)(4).
``(B) Mirror code possessions.--In the case of any
possession of the United States with a mirror code tax system
(as defined in section 24A(h)(1)(C)), this section shall not
be treated as part of the income tax laws of the United
States for purposes of determining the income tax law of such
possession unless such possession elects to have this section
be so treated.
``(C) Administrative expenses of advance payments.--
``(i) Mirror code possessions.--In the case of any
possession described in subparagraph (B) which makes the
election described in such subparagraph, the amount otherwise
paid by the Secretary to such possession under section
24A(h)(1)(A) with respect to taxable years beginning in 2026,
2027, and 2028 shall each be increased by $300,000 if such
possession has a plan, which has been approved by the
Secretary, for making monthly advance child payments
consistent with such election.
``(ii) American samoa.--The amount otherwise paid by the
Secretary to American Samoa under subparagraph (A) of section
24A(h)(3) with respect to taxable years beginning in 2025,
2026, and 2027 shall each be increased by $300,000 if the
plan described in subparagraph (B) of such section includes a
program, which has been approved by the Secretary, for making
monthly advance child payments under rules similar to the
rules of this section.
``(iii) Timing of payment.--The Secretary may pay, upon the
request of the possession of the United States to which the
payment is to be made, the amount of the increase determined
under clause (i) or (ii), respectively, immediately upon
approval of the plan with respect to which such payment
relates.
``(i) Application of Certain Definitions and Rules
Applicable to Child Tax Credit.--
``(1) Definitions.--Except as otherwise provided in this
section, terms used in this section which are also used in
section 24A shall have the same respective meanings as when
used in section 24A.
``(2) Treatment of certain deaths.--A child shall not be
taken into account in determining the monthly advance child
payment for any calendar month if the death of such child
before the end of such month is known to the Secretary as of
date on which the Secretary estimates such payment.
``(3) Identification requirements.--Rules similar to the
rules which apply under section 24A(e) shall apply for
purposes of this section except that such rules shall apply
with respect to the return of tax for the reference taxable
year or, in the case of information provided through the on-
line portal or otherwise, with respect to the information so
provided.
``(4) Restrictions on taxpayers who improperly claimed
credit or received monthly advance child payments.--For
restrictions on taxpayers who improperly claimed credit or
received monthly advance child payments, see section 24A(f).
``(j) Notice of Payments.--
``(1) In general.--Not later than January 31 of the
calendar year following any calendar year during which the
Secretary makes one or more payments to any taxpayer under
this section, the Secretary shall provide such taxpayer with
a written notice which includes--
``(A) the taxpayer's taxpayer identity (as defined in
section 6103(b)(6)),
``(B) the aggregate amount of such payments made to such
taxpayer during such calendar year, and
``(C) such other information as the Secretary determines
appropriate.
``(2) Certain payments subject to treatment as excess
advance payments.--In the case of any payments made to a
taxpayer which the Secretary has determined are subject to
treatment as excess advance payments, the notice provided
under paragraph (1) to such taxpayer shall include the amount
of such payments.
``(k) Notification of Certain Events.--With respect to any
taxpayer receiving monthly advance child payments under this
section with respect to any specified child, the Secretary
shall, to the maximum extent practicable, provide reasonable
advance notice of each of the following:
``(1) Any month with respect to which such monthly advance
child payment will increase (relative to the preceding month)
by reason of an inflation adjustment under section
24A(b)(3)(A).
``(2) Any month with respect to which such monthly advance
child payment will be reduced (relative to the preceding
month) by reason of such child ceasing to be a specified
child by reason of attaining age 18.
``(3) In the case of a taxpayer with a specified child
described in section 24A(b)(1)(A), any month with respect to
which such monthly advance child payment will be reduced by
reason of such child attaining age 6.
``(4) Such other events as the Secretary determines
appropriate.
``(l) Regulations.--The Secretary shall issue such
regulations or other guidance as the Secretary determines
necessary or appropriate to carry out the purposes of this
section.''.
(c) Termination of Annual Child Tax Credit.--Section 24 is
amended by adding at the end the following new subsection:
``(l) Termination.--This section shall not apply to (and no
payment shall be made under subsection (k) with respect to)
any taxable year beginning after December 31, 2025.''.
(d) Disclosure of Information Relating to Advance Payment
of Child Tax Credit.--Section 6103(e) is amended by adding at
the end the following new paragraph:
``(12) Disclosure of information relating to advance
payment of child tax credit.--
``(A) Joint filers.--In the case of any individual who is
eligible for monthly advance child payments under section
7527A, if the reference taxable year (as defined in section
7527A(d)(2)) that the Secretary uses to calculate such
payments is a year for which the individual filed an income
tax return jointly with another individual, the Secretary may
disclose to such individual any information which is relevant
in determining the monthly advance child payment under
section 7527A, and the individual's eligibility for such
payment, including information regarding any of the
following:
``(i) The number of specified children, including by reason
of the birth of a child.
``(ii) The name and TIN of specified children.
``(iii) Marital status.
``(iv) Modified adjusted gross income.
``(v) Principal place of abode.
``(vi) Such other information as the Secretary may provide.
``(B) Competing claimants.--In the case of any adjudication
under section 7527A(f), the Secretary may disclose return
information provided by the individual with the original
claim to the individual with the challenge claim, return
information provided by the individual with the challenge
claim to the individual with the original claim, and any
other information considered by the Secretary in such
adjudication to either or both such individuals. Such
information shall be limited to the items specified in
subparagraph (A) and the following:
``(i) Information received under any agreements or
coordination the Secretary entered into with--

``(I) any State, local government, Tribal government, or
possession of the United States, or
``(II) any other individual or entity that the Secretary
determines to be appropriate for purposes of adjudicating
claims under section 7527A(f).

[[Page S2637]]

``(ii) Information considered by the Secretary about where
and with whom the specified child resided.
``(iii) Information considered by the Secretary about
expenditures made by the claimants to the extent such
payments relate to the original or challenge claim.''.
(e) Conforming Amendments.--
(1) Section 26(b)(2) is amended by striking ``and'' at the
end of subparagraph (Y), by striking the period at the end of
subparagraph (Z) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(AA) section 24A(g)(2) (relating to increase in tax equal
to excess advance payments in certain circumstances).''.
(2) Section 152(f)(6)(B)(ii) is amended to read as follows:
``(ii) the credits under sections 24, 24A, and 24B and the
payments under sections 7527A,''.
(3) Section 3402(f)(1)(C) is amended by inserting ``or
section 24A (determined after application of subsection (g)
thereof)'' after ``section 24 (determined after application
of subsection (j) thereof)''.
(4) Section 6103(l)(13)(A)(v) is amended by inserting ``or
section 24A, as the case may be'' after ``section 24''.
(5) Section 6211(b)(4)(A) is amended by inserting ``24A by
reason of subsection (d) thereof,'' after ``24 by reason of
subsections (d) and (i)(1) thereof,''.
(6) Section 6213(g)(2)(I) is amended by inserting ``or
section 24A(e) (relating to monthly child tax credit)'' after
``section 24(e) (relating to child tax credit)''.
(7) Section 6213(g)(2)(L) is amended by inserting ``24A,''
after ``24,''.
(8) Section 6213(g)(2)(P) is amended--
(A) by inserting ``or 24A(f)(2)'' after ``section
24(g)(2)'',
(B) by inserting ``or 24A'' after ``under section 24'', and
(C) by striking ``subsection (g)(1) thereof'' and inserting
``section 24(g)(1) or section 24A(f)(1), respectively''.
(9) Section 6695(g)(2) is amended by inserting ``24A,''
after ``24,''.
(10) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``24A,'' after ``24,''.
(11) The table of sections for subpart A of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 24 the following new items:

``Sec. 24A. Monthly child tax credit.
``Sec. 24B. Credit for certain other dependents.''.
(12) The table of sections for chapter 77 is amended by
striking the item relating to section 7527A and inserting the
following new item:

``Sec. 7527A. Monthly payments of child tax credit.''.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to taxable years beginning after December 31, 2025.
(2) Monthly advance child payments.--The amendments made by
subsection (b) shall apply to--
(A) calendar months beginning after the date of the
enactment of this Act, and
(B) in the case of section 7527A(g) of the Internal Revenue
Code of 1986 (relating to grace periods and hardships),
calendar months beginning after December 31, 2025.
(3) Information disclosure.--The amendment made by
subsection (d) shall take effect on the date of the enactment
of this Act.
______