1. Short title This Act may be cited as the Foster Care Tax Credit Act . 2. Foster care tax credit (a) Allowance of credit (1) In general Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36B the following new section: 36C. Foster care tax credit (a) Allowance of credit In the case of an eligible taxpayer, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to $850. (b) Limitation (1) In general The amount of the credit allowable under subsection (a) (determined without regard to this subsection) shall be reduced (but not below zero) by the amount which bears the same ratio to such credit (as so determined) as— (A) the excess of— (i) the taxpayer's modified adjusted gross income for such taxable year, over (ii) the threshold amount, bears to (B) $17,000. (2) Threshold amount For purposes of paragraph (1), the term threshold amount means— (A) $250,000, in the case of a joint return, (B) $150,000, in the case of an individual who is not married, and (C) $125,000, in the case of a married individual filing a separate return. For purposes of this paragraph, marital status shall be determined under section 7703. (3) Modified adjusted gross income For purposes of this subsection, the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. (c) Eligible taxpayer For purposes of this section— (1) In general The term eligible taxpayer means, with respect to any taxable year, any taxpayer— (A) with whom a qualifying foster child was placed for a period of not less than 1 month during such taxable year, and (B) for whom a credit under section 24 with respect to such eligible foster child is not allowed for such taxable year. (2) Qualifying foster child The term qualifying foster child means an eligible foster child (within the meaning of section 152(f)(1)(C))—