VBoxer, Schatz and Colleagues Introduce 'Right Start' Bill to Expand Child Care Tax Credit for Working Families
Press Release
U.S. Senators Barbara Boxer (D-CA) and Brian Schatz (D-HI) today joined with Senators Jeanne Shaheen (D-NH) and Kirsten Gillibrand (D-NY) to introduce the Right Start Child Care and Education Act, legislation that would expand the child care tax credit and provide other assistance to help families afford child care.
"This bill will provide much-needed relief for families struggling with the rising costs of child care," Senator Boxer said. "As President Obama said during his State of the Union address, expanding the child care tax credit also strengthens our economy by helping more parents participate in the workforce."
"Helping families afford child care also means we are helping them succeed in the workplace," said Senator Schatz. "In Hawai"i, the high cost of living can make it tough for families to make ends meet.Our bill would give working families access to a fully refundable tax credit to help with the rising cost of child care."
The legislation would expand the Child and Dependent Care Tax Credit (CDCTC), which was first enacted in 1976 to help working families pay for child care. The tax credit does not reflect the current costs of child care, which have risen since the CDCTC was first enacted and can exceed $10,000 annually.
The bill would increase the Child and Dependent Care Tax Credit, making it equal to 35 to 50 percent of eligible expenses, a significant increase from the current range of 20 to 35 percent, and making the credit refundable. It would also increase the maximum eligible expenses from $3,000 per child to $6,000 per child. The legislation would also defray families' childcare costs, by increasing the eligible amount for Dependent Care Flexible Spending accounts from $5,000 to $7,500 annually. The measure would meet the President's goal of tripling the tax credit for working families.
The legislation would also make it easier for employers to provide working parents with childcare by increasing the tax credit for employer-provided childcare from 25 percent of expenditures to 35 percent of expenditures. It also adds a new tax credit for college graduates who become childcare professionals, equal to $2,000 per year, for up to three years.
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