Child Care Availability and Affordability Act
Congress Proposes Increasing Child Care Tax Credits and Raising Tax-Free Savings Limits for Families
Stalled
No legislative action in over 90 days.
Legislative Progress
Key Points
- This bill aims to make child care more affordable by increasing several tax benefits. It would allow families to set aside up to $7,500 in tax-free money for child care through their jobs, which is an increase from the current $5,000 limit.
- Families with children under 13 or disabled dependents would see a larger tax credit. The bill makes this credit "refundable," which means lower-income families could receive a check from the government even if they do not owe any federal income taxes.
- To encourage more companies to offer child care, the bill doubles the tax credit for businesses that build or run child care centers for their workers. Small businesses would get even higher credits and higher spending caps to help them provide these benefits.
- The policy addresses the high cost of child care and the lack of available spots. By giving more money back to parents and helping businesses open their own centers, the goal is to lower monthly costs and increase options for working parents.
- If the bill becomes law, these changes would take effect for the next tax year. While it would reduce the amount of tax money the government collects, the goal is to help families keep more of their earnings to pay for essential care.
Impact Analysis
Personal Impact
Life & Work
The bill includes a special rule for spouses who are full-time students: they are treated as if they earn $250-$500 per month for purposes of the earned income requirement. This means a family where one parent works and the other is in school full-time can still claim the full dependent care credit, helping student-parents afford child care while they complete their education.
Programs
Disabilities
Milestones
Read twice and referred to the Committee on Finance. (Sponsor introductory remarks on measure: CR S1499-1500)
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
6 articles
How is Trump's Big Beautiful Bill changing US taxes and healthcare in 2026?
Starting in 2026, parents can receive tax credits for up to 50 percent of eligible childcare expenses under the OBBBA. The law marginally increases the child tax credit and introduces new savings vehicles for families, though critics warn of expiring healthcare subsidies.
We have a bipartisan solution to address America's child care crisis
Senators Katie Britt and Tim Kaine argue for their Child Care Availability and Affordability Act, which increases the Child and Dependent Care Tax Credit, makes it refundable, and doubles the tax credit for businesses providing on-site child care.
Britt pushes child care legislation, wants some provisions in reconciliation package
Senator Katie Britt is championing the Child Care Availability and Affordability Act, aiming to fold its tax enhancements into the 2025 reconciliation package. The bill updates three tax programs to lower costs for parents and businesses providing child care.
Source Information
Document Type
Congressional Bill
Official Title
Child Care Availability and Affordability Act
Data Sources
Sponsor
Cosponsors
(21)Political Response
Analysis generated by AI. Always verify with official sources.