article: SECTION 1. REFUNDABLE CREDIT FOR CHILD DISABILITY EDUCATION AND TRAINING EXPENSES. (a) In General.--Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable personal credits) is amended by redesignating section 35 as section 36 and inserting after section 34 the following new section: ``SEC. 35. CHILD DISABILITY EDUCATION AND TRAINING EXPENSES. ``(a) Allowance of Credit.--In the case of an individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the amount paid or incurred by the taxpayer during the taxable year for qualified child disability expenses. ``(b) Limitations.-- ``(1) Maximum dollar amount.--The amount allowed as a credit under subsection (a) to the taxpayer for the taxable year shall not exceed $3,000. ``(2) Limitation based on adjusted gross income.-- ``(A) In general.--The amount of the credit allowable under subsection (a) (after application of paragraph (1)) shall be reduced (but not below zero) by $500 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds $150,000. ``(B) Modified adjusted gross income.--For purposes of subparagraph (A), 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) Cost-of-living adjustment.-- ``(i) In general.--In the case of any taxable year beginning in a calendar year after 2002, the $150,000 amount under subparagraph (A) shall be increased by an amount equal to-- ``(I) such dollar amount, 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 `calendar year 2001' for `calendar year 1992' in subparagraph (B) thereof. ``(ii) Rounding rules.--If any amount after adjustment under clause (i) is not a multiple of $1,000, such amount shall be rounded to the next lower multiple of $1,000. ``(c) Qualified Child Disability Expenses.--For purposes of this section-- ``(1) In general.--The term `qualified child disability expenses' means amounts paid for services and equipment related to education and training of a qualified child of the taxpayer in connection with a developmental disability of such child, including-- ``(A) behavioral therapy, ``(B) speech therapy, ``(C) occupational therapy, ``(D) physical therapy, ``(E) auditory therapy, ``(F) assistive communication technology, and ``(G) such other services as the Secretary may, in consultation with the Secretary of Health and Human Services and the Secretary of Education, provide by regulation. ``(2) Developmental disability.--The term `developmental disability' has the same meaning given the term in section 102 of the Developmental Disabilities Assistance and Bill of Rights Act of 2000 (Public Law 106-402; 114 Stat. 1682). ``(3) Qualified child.--The term `qualified child' means any individual if-- ``(A) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year, ``(B) such individual has not attained the age of 18 as of the close of the calendar year in which the taxable year of the taxpayer begins, and ``(C) such individual bears a relationship to the taxpayer described in section 32(c)(3)(B). ``(d) Verification Requirements.-- ``(1) Expenses must be substantiated.--Qualified child disability expenses to which subsection (a) applies may be taken into account under this section only if the taxpayer substantiates such expense in such form as the Secretary may prescribe. ``(2) Identification requirement.--No credit shall be allowed under this section with respect to any qualified child unless the taxpayer includes the name and taxpayer identification number of such qualified child on the return of tax for the taxable year. ``(e) Special Rules.-- ``(1) Denial of double benefit.-- ``(A) In general.--No credit shall be allowed under subsection (a) for any expense for which a deduction or credit is allowed under any other provision of this chapter. ``(B) Grants.--No credit shall be allowed under subsection (a) for any expense to the extent that funds for such expense are received under any Federal, State, or local program. ``(2) Married couples must file joint returns.--Rules similar to the rules of paragraphs (2), (3), and (4) of section 21(e) shall apply for purposes of this section. ``(3) Basis adjustment.--For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.''. (b) Conforming Amendments.-- (1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period ``, or from section 35 of such Code''. (2) 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 striking the last item and inserting the following new items: ``Sec. 35. Child disability expenses. ``Sec. 36. Overpayments of tax.''. (3) Section 1016(a) of such Code is amended by striking ``and'' at the end of paragraph (26), by striking the period at the end of paragraph (27) and inserting ``, and'', and by adding at the end the following: ``(28) in the case of property with respect to which a credit was allowed under section 35, to the extent provided in section 35(e)(3).''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
summary: Amends the Internal Revenue Code to allow a tax credit for up to $3,000 of the amount paid or incurred by the taxpayer during the taxable year for qualified child disability expenses for services and equipment related to education and training of a child of the taxpayer with a developmental disability, including behavioral therapy, speech therapy, occupational therapy, physical therapy, auditory therapy, assistive communication technology, and other related services. Phases out the credit by $500 increments per $1,000 of modified adjusted gross income over $150,000.