Bill Details
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This bill would increase two tax breaks related to child and dependent care. First, it would let families claim a larger tax credit for certain household and dependent care expenses. Second, it would give employers a bigger tax credit for helping pay for child care for their workers. The changes are meant to make care costs easier to manage for families and to encourage more employers to offer child care support.
- The family care credit would double the expense limits used to figure the credit, from $3,000 to $6,000 for one qualifying person and from $6,000 to $12,000 for two or more qualifying people.
- The employer child care tax credit would increase the cap on eligible costs from $150,000 to $400,000.
- Both changes would apply to tax years starting after the bill becomes law.
Official Summaries
This bill doubles the maximum amount that an individual may claim as a federal tax credit for qualified child and dependent care expenses and increases the maximum amount an employer may claim as a federal business tax credit for providing certain child care services to employees.
Under the bill, the annual maximum amount allowed for the child and dependent care tax credit is increased to $6,000 (from $3,000) for individuals with one qualifying child or dependent, or to $12,000 (from $6,000) for individuals with two or more qualifying children or dependents. (Under current law, an individual may claim a nonrefundable tax credit for a portion of qualified child and dependent care expenses paid so that the individual or the individual’s spouse can work or look for work.)
Further, the bill increases to $400,000 (from $150,000) the annual maximum amount that an employer may claim as a tax credit for providing certain child care services to employees. (Under current law, an employer may claim a nonrefundable business tax credit for a percentage of qualified child care facility expenses and child care referral and resource expenses.)
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1426 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 1426
To amend the Internal Revenue Code of 1986 to increase the amount
allowed as a credit under the expenses for household and dependent care
services credit and the employer-provided child care credit.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 18, 2025
Mr. Mackenzie 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 increase the amount
allowed as a credit under the expenses for household and dependent care
services credit and the employer-provided child care credit.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. INCREASE IN CREDIT FOR EXPENSES FOR HOUSEHOLD AND DEPENDENT
CARE SERVICES.
(a) In General.--Section 21(c) of the Internal Revenue Code of 1986
is amended--
(1) in paragraph (1), by striking ``$3,000'' and inserting
``$6,000'', and
(2) in paragraph (2), by striking ``$6,000'' and inserting
``$12,000''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 2. INCREASE IN EMPLOYER-PROVIDED CHILD CARE CREDIT.
(a) In General.--Section 45F(b) is amended by striking ``$150,000''
and inserting ``$400,000''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
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