Reps. Davis, DelBene, and Sánchez Champion Bill to Reduce the Cost of Child Care for Working Families through Tax Credits

Reps. Davis, DelBene, and Sánchez Champion Bill to Reduce the Cost of Child Care for Working Families through Tax Credits

<span>Reps. Davis, DelBene, and Sánchez Champion Bill to Reduce the Cost of Child Care for Working Families through Tax Credits</span> <div class="evo-press-release__field-evo-subtitle">The bill increases the maximum child care credit to $4,000 for one child or $8,000 for two or more children.</div> <span><span>Jill.Hunter-Wi…</span></span> <span><time datetime="2024-02-06T15:36:18-05:00" title="Tuesday, February 6, 2024 - 15:36">Tue, 02/06/2024 - 15:36</time> </span> <div class="evo-press-release__body"><div class="boxee25L">&nbsp;</div> <p><span><span>Representatives Danny K. Davis (D-IL), Suzan DelBene (D-WA), and Linda Sánchez introduced the <em>Child and Dependent Care Tax Credit Enhancement Act</em> to permanently expand child care tax credits to help working families receive up to $4,000 for one child or $8,000 for two or more children to cover child care costs. In 2021, Reps. Davis, DelBene, and Sánchez secured the temporary expansion of the Child and Dependent Care Tax Credit that almost quadrupled the average tax credit from more than $550 among households that claimed the credit in 2020 to more than $2,100 in 2021.&nbsp; </span></span></p> <p><span><span></span></span></p> <p><span><span>The <em>Child Care and Dependent Credit Enhancement Act</em> will increase the maximum credit amount to $4,000 per child up to $8,000 for two or more children, expand eligibility to low-income families, make the credit available to married couples who file separately due to high student loan debt, and retain the credit’s value over time by indexing it to inflation. This bill is led by Senators Bob Casey (D-PA), Ron Wyden (D-OR), and Patty Murray (D-WA) in the Senate. </span></span></p> <p><span><span></span></span></p> <p><span><span>High-quality, affordable child care is essential to the economic well-being of families, businesses, and our country. Yet, child care places a major financial burden on American families. The price of child care can <a href="https://www.dol.gov/sites/dolgov/files/WB/NDCP/WB_IssueBrief-NDCP-final.pdf">range from $5,357 to $17,171 per year</a> depending on location and type of care.&nbsp; Astoundingly, the cost of center-based care for two children is more than the average mortgage in 41 states and <a href="https://www.childcareaware.org/catalyzing-growth-using-data-to-change-child-care-2022/#LandscapeAnalysis">more than the average annual rent in all 50 states plus DC</a>.&nbsp; Households under the poverty line spend&nbsp;<a href="https://www.dol.gov/sites/dolgov/files/WB/NDCP/WB_IssueBrief-NDCP-final.pdf" target="_blank">nearly one third of their income&nbsp;on child care</a>, and increases in median child care prices are connected to lower maternal employment rates. Further, the child care crisis hits families of color disproportionately hard.&nbsp; For a single parent who has never been married who is Black, Hawaiian/Pacific Islander, or American Indian/Alaska Native, <a href="https://www.childcareaware.org/catalyzing-growth-using-data-to-change-child-care/#SupplyandQualityTrends">child care can cost 36%, 41%, or 49% of the median income</a>, respectively, compared to only 31% for single White parents.&nbsp; Further, <a href="https://www.americanprogress.org/article/mapping-americas-child-care-deserts/">Latino and American Indian and Alaska Native parents disproportionately live in child care deserts</a>. </span></span></p> <p><span><span></span></span></p> <p><span><span>Unfortunately, as currently structured, the Child and Dependent Care Tax Credit fails to meet the needs of tens of millions of working families. Very few families receive meaningful benefit from the credit due to the extremely low phase-out level of $15,000, the low expense limits, the non-refundable nature, and the loss of benefit due to inflation.&nbsp; For example, in 2020, there was a 13-percentage-point disparity between working parents who qualified for the Earned Income Tax Credit and those who benefited from the current child care credit. This disparity reflects the critical need to modernize this credit to help low– and moderate-income working parents.&nbsp; </span></span></p> <p><span><span></span></span><span><span></span></span><span><span>“High-quality, affordable child care is essential to the economic well-being of families, businesses, and our country,” <strong>said Rep. Davis</strong>.&nbsp; “I am proud to lead the Child and Dependent Care Tax Credit Enhancement Act that would restore the 2021 credit so that families could receive up to $4,000 for child care for one child (or up to $8,000 for two or more children), much better than the almost $600 that the typical family receives currently.&nbsp; This bill would strengthen the financial well-being of families and grow our economy.&nbsp; It is critical that Congress acts now to help working families.” </span></span></p> <p><span><span></span></span></p> <p><span><span><span><span>“Accessible, high-quality child care is critical for the well-being