Child Care Availability and Affordability Act | ChamberLight
Bills · S 847
IN COMMITTEE· 119TH CONGRESS
Senate BillS 847Taxation
Child Care Availability and Affordability Act
INTRO MAR 4· LAST ACTION MAR 4
READING
11MIN
COSPONSORS
21BIPARTISAN
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8
Introduced
In Committee
Reported
Passed Senate
Passed House
Conference
To President
Became Law
WHAT THE BILL DOES
AI-written
Voters should care about this bill because child care costs are a major financial burden for many American families, often rivaling housing or college tuition expenses. If this bill becomes law, it could significantly reduce these costs, making it easier for parents to work and potentially increasing workforce participation. The increased incentives for businesses might lead to more employers offering on-site child care or financial assistance, which is a critical support for working parents.
The change to make the individual child and dependent care credit refundable is particularly important. This means that low-income families, who might not owe enough in taxes to benefit from a non-refundable credit, would still receive the full amount of the credit as a cash refund. This could provide substantial relief to families struggling to afford care, helping to reduce child poverty and economic stress. If this bill does not become law, child care costs will likely remain a significant barrier for many families, and businesses will continue to face less incentive to invest in employee child care support.
KEY PROVISIONS
5AI-extracted
PROVISION 01
Increases the employer-provided child care tax credit percentage from 25% to 50% and the maximum credit from $150,000 to $500,000, with even higher rates for small businesses.
This makes it significantly more financially attractive for businesses to offer child care solutions or support to their employees.
PROVISION 02
Raises the amount of employer-provided dependent care assistance that employees can exclude from their taxable income from $5,000 to $7,500 per year.
This allows employees to receive more tax-free money from their employers to help cover their child or dependent care expenses.
PROVISION 03
Makes the individual Child and Dependent Care Tax Credit refundable, meaning families can receive the credit amount as a refund even if they owe no income tax.
This is a major change that extends financial relief to low-income families who currently cannot fully utilize the credit if they have little to no tax liability.
PROVISION 04
Increases the maximum amount of child and dependent care expenses that can be used to calculate the individual tax credit from $3,000 to $5,000 for one child, and from $6,000 to $8,000 for two or more children.
This directly increases the potential amount of the tax credit for families, providing greater financial assistance for their care costs.
PROVISION 05
Adjusts the income thresholds and maximum percentage for the individual Child and Dependent Care Tax Credit, allowing more families to receive a higher credit percentage.
This ensures that a broader range of working families, especially those with moderate incomes, can benefit more substantially from the credit.
Voters should care about this bill because child care costs are a major financial burden for many American families, often rivaling housing or college tuition expenses. If this bill becomes law, it could significantly reduce these costs, making it easier for parents to work and potentially increasing workforce participation. The increased incentives for businesses might lead to more employers offering on-site child care or financial assistance, which is a critical support for working parents.
The change to make the individual child and dependent care credit refundable is particularly important. This means that low-income families, who might not owe enough in taxes to benefit from a non-refundable credit, would still receive the full amount of the credit as a cash refund. This could provide substantial relief to families struggling to afford care, helping to reduce child poverty and economic stress. If this bill does not become law, child care costs will likely remain a significant barrier for many families, and businesses will continue to face less incentive to invest in employee child care support.
KEY PROVISIONS
AI-extracted
high
Increases the employer-provided child care tax credit percentage from 25% to 50% and the maximum credit from $150,000 to $500,000, with even higher rates for small businesses.
This makes it significantly more financially attractive for businesses to offer child care solutions or support to their employees.
med
Raises the amount of employer-provided dependent care assistance that employees can exclude from their taxable income from $5,000 to $7,500 per year.
This allows employees to receive more tax-free money from their employers to help cover their child or dependent care expenses.
high
Makes the individual Child and Dependent Care Tax Credit refundable, meaning families can receive the credit amount as a refund even if they owe no income tax.
This is a major change that extends financial relief to low-income families who currently cannot fully utilize the credit if they have little to no tax liability.
high
Increases the maximum amount of child and dependent care expenses that can be used to calculate the individual tax credit from $3,000 to $5,000 for one child, and from $6,000 to $8,000 for two or more children.
This directly increases the potential amount of the tax credit for families, providing greater financial assistance for their care costs.
med
Adjusts the income thresholds and maximum percentage for the individual Child and Dependent Care Tax Credit, allowing more families to receive a higher credit percentage.
This ensures that a broader range of working families, especially those with moderate incomes, can benefit more substantially from the credit.
Amendments for employer-provided child care credit and dependent care assistance exclusion apply to amounts paid or incurred
after the date of the enactment of this section
Amendments for the household and dependent care credit apply to amounts paid or incurred
GLOSSARY
AI-written
Internal Revenue Code of 1986
The main body of federal tax law in the United States, which governs how taxes are collected and what rules apply to taxpayers.
Employer-Provided Child Care Credit
A tax credit that businesses can claim for expenses related to providing child care services or facilities for their employees.
Dependent Care Assistance Exclusion
A tax rule that allows employees to exclude a certain amount of money received from their employer for dependent care services from their taxable income.
Household and Dependent Care Credit
A tax credit individuals can claim on their tax return for a portion of the expenses paid for the care of a child or other dependent, which allows the taxpayer to work or look for work.
Refundable Credit
A tax credit that can result in a taxpayer receiving money back even if they do not owe any taxes. If the credit amount is greater than the taxes owed, the difference is paid to the taxpayer as a refund.
Adjusted Gross Income (AGI)
A person's total gross income minus specific deductions, used to determine eligibility for certain tax credits, deductions, and other tax benefits.
Qualifying Individual
ACTION TIMELINE
2 EVENTS
MAR 4, 25
Introduced in Senate
INTROREFERRAL
MAR 4, 25
Read twice and referred to the Committee on Finance. (Sponsor introductory remarks on measure: CR S1499-1500)
For the purpose of child and dependent care tax benefits, this generally refers to a child under age 13 or a dependent/spouse who is physically or mentally incapable of self-care.
Employment-Related Expenses
Costs for household services or the care of a qualifying individual, incurred specifically to enable the taxpayer to be gainfully employed.
