Bill · H.R. 2994· House(119-HR-2994)

Child and Dependent Care Tax Credit Enhancement Act of 2025

Age: 85 years

Illinois

Introduced: 4/24/2025
Last activity: 4/24/2025 — Referred to the House Committee on Ways and Means.
Sponsored by: Danny Davis
Cosponsors: - 27 - 0

Taxation

Introduced
In Committee

What this bill would do

The Child and Dependent Care Tax Credit Enhancement Act of 2025 aims to amend the Internal Revenue Code of 1986. The bill proposes changes to the Child and Dependent Care Tax Credit to enhance its impact. It includes adjustments to the applicable percentage based on a taxpayer's adjusted gross income. The bill also increases the dollar limits on the amount of the credit that can be claimed. Furthermore, it establishes a special rule for married couples who file separate returns. Finally, the act makes the credit fully refundable for certain individuals.

Yes· 3 of 7

Does this make child care cost less?+8
The bill increases the maximum amount of the tax credit available for child and dependent care expenses.
Would households on low incomes be better off under this?+7
The bill makes the credit fully refundable and increases the dollar limits, providing greater relief to those with lower incomes.
Would middle-income households be better off under this?+7
The higher dollar limits for the tax credit benefit middle-income families with childcare expenses.

The opposite

Does this reduce what the federal government spends?-3
Increasing the tax credit and making it refundable increases federal outlays.
Would high-income households be better off under this?-2
The bill implements an income-based reduction in the applicable percentage for those earning over $125,000.