Bills · S 1421
IN COMMITTEE· 119TH CONGRESS
Senate BillS 1421Taxation
Child and Dependent Care Tax Credit Enhancement Act of 2025
INTRO APR 10· LAST ACTION APR 10
READING
4MIN
COSPONSORS
29
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed Senate
Passed House
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill matters because the cost of childcare is a major financial burden for many families, often making it difficult for parents to work or pursue education. If this bill becomes law, it would provide significant financial relief, helping families afford quality care for their loved ones. This could enable more parents, especially mothers, to participate in the workforce, potentially boosting household incomes and the economy.
If this bill does not become law, the existing Child and Dependent Care Tax Credit would remain in place, with lower expense limits, a lower maximum credit percentage for some, and without the refundable option. This means many families, particularly those with lower incomes or high care costs, would continue to receive less financial assistance for their care expenses, which could strain family budgets and limit their work options.
KEY PROVISIONS
5AI-extractedPROVISION 01
Increases the maximum amount of care expenses that can be used to calculate the credit from $3,000 to $8,000 for one dependent, and from $6,000 to $16,000 for two or more dependents.
This significantly increases the potential amount of the tax credit families can receive, reflecting the high costs of modern childcare.
PROVISION 02
Sets the highest credit percentage at 50% for lower-income families, gradually reducing it as income rises, starting the reduction at an Adjusted Gross Income (AGI) of $125,000.
This means more families, especially those earning middle incomes, can receive a larger percentage of their care expenses back as a credit.
PROVISION 03
Makes the credit 'refundable' for certain taxpayers, meaning families can receive the credit as a refund even if it exceeds their tax liability.
This is a critical change that provides direct financial assistance to low-income working families, even if they owe little to no federal income tax.
PROVISION 04
Requires annual adjustments for inflation to the income thresholds and maximum expense limits starting in 2026.
This ensures the value and impact of the tax credit do not diminish over time due to rising costs.
PROVISION 05
Clarifies rules for married couples filing separate tax returns, ensuring their combined credit doesn't exceed what they'd get if filing jointly.
This aims to prevent couples from gaining an unfair tax advantage by filing separately while still allowing flexibility.
SPONSORSHIP
1 + 29
D· Minnesota
YRS IN OFFICE
7
BILLS LED
45
COSPONSOR BREAKDOWNBIPARTISAN · 0%
DEM 28 REP 0 IND 1
ACTION TIMELINE
2 EVENTSAPR 10
Introduced in Senate
APR 10
Read twice and referred to the Committee on Finance.
BILL INFO
TypeSenate Bill
NumberS 1421
Congress119th
StatusIn Committee
IntroducedApr 10, 2025
Last actionApr 10, 2025
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IN COMMITTEE· 119TH CONGRESS · FINANCE COMMITTEE · INTRODUCED APR 10, 2025
Senate BillS 1421Taxation
Child and Dependent Care Tax Credit Enhancement Act of 2025
INTRODUCED APR 10, 2025· LAST ACTION APR 10, 2025
PASSAGE CHANCES
—%
READING
4 min
COSPONSORS
29
COMPLEXITY
Moderate
