Official Summaries

Expanding Child Care Access Act of 2025

This bill establishes a temporary (for seven years) refundable tax credit for certain expenses incurred to establish and operate a qualified family child care provider. (Conditions and limitations apply.)

Under the bill, a qualified family child care provider is a child care provider that  

• provides child care services at the taxpayer's primary residence for at least two children (other than the children of such taxpayer) for a significant portion of the tax year,
• receives compensation for such child care services, and
• is licensed or registered to provide such child care services by the state in which such services are provided.

The bill allows a taxpayer that operates a qualified family child care provider to claim a tax credit of up to $5,000 for

• child care licensing fees;
• child care supplies (e.g., diapers, food, toys, and learning materials);
• liability insurance;
• fencing (including installation costs);
• outdoor playground equipment (including installation costs);
• furniture necessary to provide child care;
• the salary of an employee (other than the taxpayer);
• printers and computers;
• professional training required by the state for licensing or registration; and
• remediation or renovation of a primary residence to meet state licensing or registration requirements.

The tax credit may only be claimed once and may not be claimed for expenses for which another tax deduction or tax credit is allowed.

Finally, the bill requires the Internal Revenue Service to issue guidance on the tax credit, including guidance related to information reporting requirements.

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1296 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 1296

 To amend the Internal Revenue Code of 1986 to establish a refundable 
           credit for qualified child care startup expenses.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 13, 2025

Mr. Conaway (for himself, Mrs. Foushee, Ms. Barragan, Ms. Sanchez, Ms. 
 Pressley, Ms. Chu, Ms. Titus, Ms. Norton, Ms. Ross, Ms. Brownley, Mr. 
 Takano, Mr. Frost, Mr. Casten, Mrs. Watson Coleman, Mrs. Ramirez, Ms. 
  Perez, Ms. Garcia of Texas, Mr. Carson, Mr. Carbajal, Mr. Garcia of 
California, Mrs. Hayes, Mr. Peters, Ms. Tokuda, Mr. Johnson of Georgia, 
Ms. Bynum, Ms. McDonald Rivet, Ms. Salinas, Mr. Ruiz, Mrs. McIver, and 
  Mrs. Cherfilus-McCormick) introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to establish a refundable 
           credit for qualified child care startup expenses.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Expanding Child Care Access Act of 
2025''.

SEC. 2. LICENSED FAMILY CHILD CARE CREDIT.

    (a) 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:

``SEC. 36C. LICENSED FAMILY CHILD CARE CREDIT.

    ``(a) In General.--In the case of a qualified taxpayer, there shall 
be allowed as a credit against the tax imposed by this subtitle for any 
taxable year an amount equal to so much of the qualified child care 
startup expenses of the taxpayer for such taxable year or for the 
preceding taxable year as do not exceed $5,000.
    ``(b) Qualified Taxpayer.--For purposes of this section, the term 
`qualified taxpayer' means, with respect to a taxable year, a taxpayer 
that operates a qualified family child care provider.
    ``(c) Qualified Family Child Care Provider.--For purposes of this 
section, the term `qualified family child care provider' means a family 
child care provider that, with respect to a taxable year--
            ``(1) provides child care services for compensation that, 
        as of the last day of such taxable year, is licensed or 
        registered under State law and satisfies State and local 
        requirements applicable to the child care services it provides,
            ``(2) primarily provides child care at the taxpayer's 
        primary residence, and
            ``(3) provided child care services to not less than 2 
        children (excluding children of such taxpayer) for a 
        significant portion of such taxable year.
    ``(d) Qualified Child Care Startup Expenses.--For purposes of this 
section, the term `qualified child care startup expenses' means amounts 
paid or incurred for any of the following in order to establish and 
operate a qualified family child care provider:
            ``(1) Child care licensing fees.
            ``(2) Child care supplies including diapers, food, toys, 
        and learning materials.
            ``(3) Liability insurance.
            ``(4) Fencing and installation of such fencing.
            ``(5) Outdoor playground equipment and installation of such 
        equipment.
            ``(6) Furniture necessary to provide child care.
            ``(7) Salary of an employee other than the taxpayer.
            ``(8) Printer and computers.
            ``(9) Professional training required as a condition of 
        State licensure or registration.
            ``(10) Remediation or renovation of the taxpayer's primary 
        residence required as a condition of State licensure or 
        registration.
    ``(e) Limitations.--No credit shall be allowed under subsection (a) 
to any taxpayer to whom a credit was allowed under such subsection in 
any other taxable year.
    ``(f) Denial of Double Benefit.--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.
    ``(g) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations relating to such 
information reporting and coordination with state and local licensing 
or registration entities as the Secretary determines appropriate.
    ``(h) Sunset.--No credit shall be allowed under subsection (a) for 
any taxable year beginning after the date that is 7 years after the 
date of the enactment of this section.''.
    (b) Conforming Amendment.--Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ``36C,'' after ``36B,''.
    (c) Clerical Amendment.--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 inserting after the item relating to section 36B the 
following new item:

``Sec. 36C. Licensed family child care credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act.
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