A Republican and Democrat in the Senate have proposed bolstering tax credits to assist American families with the expense of child care.
Sens. Katie Britt of Alabama and Tim Kaine of Virginia introduced the Child Care Availability and Affordability Act and the Child Care Workforce Act – two pieces of legislation designed to expand access to child-care-related tax credits to middle and lower-income families.
“Accessing and affording child care is a costly challenge all too familiar to families across Alabama and our entire nation. This growing crisis has resulted in more and more parents, especially mothers, being forced to leave the workforce,” said Britt.
Between 1990 and April 2024, preschool and daycare costs in America increased by 263% according to ABC News. The Federal Reserve reported in May that American parents pay a median of $800 a month for child care.
“For those who paid for 20 or more hours of child care each week, the median cost was $1,100,” the report added.
The Child Care Availability and Affordability Act would expand the maximum Child and Dependent Care Tax Credit (CDCTC) to $2,500 for families with one child and $4,000 for families with two or more children. The bill would also allow families to deduct up to $7,500 (a 50% increase) under the Dependent Care Assistance Program.
Additionally, Kaine and Britt’s proposal aims to encourage businesses to provide their employees with child care by fortifying the Employer-Provided Child Care Tax Credit.
The plan “would increase the maximum credit from $150,000 to $500,000, and the percentage of expenses covered from 25% to 50%” and would include “a larger incentive for small businesses—a maximum credit of $600,000—and allows for joint applications for groups of small businesses who want to pool resources,” Britt’s office noted.
“I’ve heard from Virginians in every corner of the Commonwealth about how difficult it is to find affordable child care, and how low wages are driving dedicated child care workers out of a field they love,” said Kaine in a press release. “This crisis is holding our families, workers, and economy back, and I’m proud to be introducing a bold bipartisan proposal to tackle it head on.”
The second bill, the Child Care Workforce Act, would create a grant program that would cover the costs of pay supplement programs. The senators hope the resource will “increase supply and reduce turnover” among child care workers.
“Model programs exist in Virginia, Nebraska, Oklahoma, Maine, and the District of Columbia, with evaluations demonstrating large effects on the supply of workers, educator turnover, and worker well-being and satisfaction,” noted Kaine’s office.
