MODIFICATIONS TO CHILD TAX CREDIT.

SEC. 201. MODIFICATIONS TO CHILD TAX CREDIT. (a) Increase in Per Child Amount.—Subsection (a) of section 24 (relating to child tax credit) is amended to read as follows: “(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 with respect to each qualifying child of the taxpayer an amount equal to the per child amount. “(2) Per child amount.—For purposes of paragraph (1), the per child amount shall be determined as follows: “In the case of any taxable year beginning in— The per child amount is— 2001, 2002, 2003, or 2004 $ 600 2005, 2006, 2007, or 2008 700 2009 800 2010 or thereafter 1,000.”. (b) Credit Allowed Against Alternative Minimum Tax.— (1) In general.—Subsection (b) of section 24 (relating to child tax credit) is amended by adding at the end the following new paragraph: “(3) Limitation based on amount of tax.—The credit allowed under subsection (a) for any taxable year shall not exceed the excess of— “(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over “(B) the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year.”. (2) Conforming amendments.— (A) The heading for section 24(b) is amended to read as follows: “Limitations.—”. (B) The heading for section 24(b)(1) is amended to read as follows: “Limitation based on adjusted gross income.—”. (C) Section 24(d), as amended by subsection (c), is amended— (i) by striking “section 26(a)” each place it appears and inserting “subsection (b)(3)”, and115 STAT. 46 (ii) in paragraph (1)(B) by striking “aggregate amount of credits allowed by this subpart” and inserting “amount of credit allowed by this section”. (D) Paragraph (1) of section 26(a) is amended by inserting “(other than section 24)” after “this subpart”. (E) Subsection (c) of section 23 is amended by striking “and section 1400C” and inserting “and sections 24 and 1400C”. (F) Subparagraph (C) of section 25(e)(1) is amended by inserting “, 24,” after “sections 23”. (G) Section 904(h) is amended by inserting “(other than section 24)” after “chapter”. (H) Subsection (d) of section 1400C is amended by inserting “and section 24” after “this section”. (c) Refundable Child Credit.— (1) In general.—So much of section 24(d) (relating to additional credit for families with 3 or more children) as precedes paragraph (2) is amended to read as follows: “(d) Portion of Credit Refundable.— “(1) In general.—The aggregate credits allowed to a taxpayer under subpart C shall be increased by the lesser of— “(A) the credit which would be allowed under this section without regard to this subsection and the limitation under section 26(a), or “(B) the amount by which the amount of credit allowed by this section (determined without regard to this subsection) would increase if the limitation imposed by section 26(a) were increased by the greater of— “(i) 15 percent (10 percent in the case of taxable years beginning before January 1, 2005) of so much of the taxpayer’s earned income (within the meaning of section 32) which is taken into account in computing taxable income for the taxable year as exceeds $10,000, or “(ii) in the case of a taxpayer with 3 or more qualifying children, the excess (if any) of— “(I) the taxpayer’s social security taxes for the taxable year, over “(II) the credit allowed under section 32 for the taxable year. The amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of credit otherwise allowable under subsection (a) without regard to section 26(a).”. (2) Inflation adjustment.—Subsection (d) of section 24 is amended by adding at the end the following new paragraph: “(4) Inflation adjustment.—In the case of any taxable year beginning in a calendar year after 2001, the $10,000 amount contained in paragraph (1)(B) shall be increased by an amount equal to— “(A) such dollar amount, multiplied by “(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2000’ for ‘calendar year 1992’ in subparagraph (B) thereof. Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50.”.115 STAT. 47 (3) Conforming amendment.—Section 32 is amended by striking subsection (n). (d) Elimination of Reduction of Credit to Taxpayer Subject to Alternative Minimum Tax Provision.—Section 24(d) is amended— (1) by striking paragraph (2), and (2) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively. (e) Effective Dates.— (1) In general.—Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2000. (2) Subsection (b).—The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2001.