Tax Policy and Child Care
Overview
Strong funding is essential to strengthening child care in the United States, but updating provisions of the federal tax code is also an important part of the solution.
- The Child and Dependent Care Tax Credit (CDCTC) is the only tax credit designed specifically to help parents offset the cost of child care.
- The Dependent Care Assistance Program (DCAP) allows some working parents to set aside a small amount of their pre-tax paycheck to pay for child care expenses (including employer-sponsored child care contributions).
- The Employer-Provided Child Care Credit (known as 45F) supports businesses who want to locate or provide child care for their workforce, while also increasing the number of child care slots available in their community.
Unfortunately, these provisions are limited in their reach, which reduces their ability to help working parents access quality child care. Modernizing provisions like these would simultaneously help more parents afford child care while supporting employer efforts to connect employees to child care options.
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FFYF Capsule Collection: Tax Policy and Child Care
Millions of American families today are struggling to find the affordable, reliable, quality child care they depend on to go to work. This has a devastating impact on our youngest …
Side-By-Side: Comparing Tax Bills, 2024
The federal tax code contains benefits designed to help working families offset the expense of child care. Unfortunately, these provisions have not been updated in decades. Today, they have not …
The First Five Things To Know About: The Federal Tax Code and Child Care
Millions of American families are struggling to find the affordable, reliable, quality child care they depend on to go to work. This has a devastating impact on our youngest learners, …
Letters of Support
- In September 2023, a group of 85 organizations, Chambers of Commerce and businesses sent a letter calling on members of Congress to make child care more affordable by updating the U.S. tax code.
- In January 2024, leaders of the Bipartisan Pre-K and Child Care Caucus — Reps. Suzanne Bonamici (D-OR), Joaquin Castro (D-TX), and Ashley Hinson (R-IA) — sent a letter to the Ways and Means Committee urging them to modernize four existing child care credits – the Child and Dependent Care Tax Credit, Child Tax Credit, Dependent Care Assistance Program, and Employer Provided Child Care Tax Credit – to “provide immediate relief for working families and small businesses nationally.”
- In January 2024, a group of 20+ national organizations signed a joint statement applauding the bipartisan Tax Relief for American Families and Workers Act of 2024 and calling on Congress to also modernize other existing child care credits – Child and Dependent Care Tax Credit, the Dependent Care Assistance Program, and the Employer-Provided Child Care Tax Credit – to help ease the tremendous burden of finding and affording child care for working families while supporting economic stability around the country.
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JOB POSTING: Policy & Research Analyst
Position Summary Reporting to FFYF’s Managing Director, Policy & National Partnerships, the Policy & Research Analyst is broadly responsible for conducting policy analysis and research, informing policy solutions, and developing …
FFYF & Bipartisan Pre-K and Child Care Caucus Host “Child Care Means Business” Event
On June 4th, First Five Years Fund, in conjunction with the Bipartisan Pre-K and Child Care Caucus, hosted lawmakers, bipartisan Congressional staffers, and early learning advocates for a “Child Care …
