Two federal child- and dependent-care tax credits would be sharply expanded under a bill from Rep. Mackenzie. The §21 dependent-care credit's expense cap would double — from $3,000 to $6,000 for one qualifying individual and from $6,000 to $12,000 for two or more, effectively doubling the maximum credit a working household can claim for nursery, daycare, or elder-care costs. The §45F employer-provided child care credit cap would rise from $150,000 to $400,000 per year, encouraging employers to subsidize child care for their workforces. Both changes would take effect starting the tax year after enactment.
Average Household Impact
- §21 dependent-care credit expense cap — doubled to $6,000 (one child) and $12,000 (two+)
Corporate Benefits
- §45F employer-provided child care credit cap — raised from $150,000 to $400,000 per year
Congressional Summary
This bill doubles the maximum amount that an individual may claim as a federal tax credit for qualified child and dependent care expenses and increases the maximum amount an employer may claim as a federal business tax credit for providing certain child care services to employees.Under the bill, the annual maximum amount allowed for the child and dependent care tax credit is increased to $6,000 (from $3,000) for individuals with one qualifying child or dependent, or to $12,000 (from $6,000) for individuals with two or more qualifying children or dependents. (Under current law, an individual may claim a nonrefundable tax credit for a portion of qualified child and dependent care expenses paid so that the individual or the individual’s spouse can work or look for work.)Further, the bill increases to $400,000 (from $150,000) the annual maximum amount that an employer may claim as a tax credit for providing certain child care services to employees. (Under current law, an employer may claim a nonrefundable business tax credit for a percentage of qualified child care facility expenses and child care referral and resource expenses.)
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-02-18
- Date Added
- 2026-05-07
- Source
- Congress.gov →
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