WASHINGTON – With House Ways and Means Chairman Kevin Brady (R-TX) poised to release the committee’s tax reform proposal on Wednesday, there is still no clarity on the future of the Child and Dependent Care Tax Credit (CDCTC) – the only provision in the tax code specifically created to help working families with the cost of work-related child care. In recent weeks, a number of competing priorities have put the fate of this longstanding and widely-popular credit in jeopardy. A spokesperson for the White House said Ivanka Trump supports maintaining the CDCTC. Ahead of the bill’s introduction, FFYF is hopeful that lawmakers will not only maintain the CDCTC, but expand it – and make it refundable to reach more low- and middle-income families who would benefit most from this vital tax benefit.
“The cost of quality child care is higher than college tuition in most states,” said FFYF executive director Kris Perry. “Yet the tax code does very little to support families with young children. If the goal of tax reform is to spur economic growth and help working families, then expanding the CDCTC should be a top priority. The rumors of a proposed elimination of this tax credit are particularly troubling, considering nearly 15 million children in the U.S. under the age of six have working parents, and paying for child care presents a significant burden to parents’ ability to enter, return or remain in the workforce.”
In support of the CDCTC, a bipartisan group of lawmakers introduced legislation earlier this year aimed at strengthening it. Senators Richard Burr (R-NC) and Angus King (I-ME) and Representatives Kevin Yoder (R-KS) and Stephanie Murphy (D-FL) are the sponsors of the Promoting Affordable Childcare for Everyone (PACE) Act, which would expand the Child and Dependent Care Tax Credit (CDCTC), and make it refundable to reach more low-income families with a lower tax liability.
The PACE Act also increases the amount of pre-tax dollars families can put into Dependent Care Flexible Spend Accounts. The legislation makes both tax provisions more generous, and modifies them to reflect the changing economic landscape by requiring an annual inflation adjustments that will provide families with greater spending power when seeking care for their children. Because both tax provisions affect care for the elderly and individuals with disabilities, those enhanced benefits will extend to them as well.
According to a recent national poll, 81% of the electorate—including 74% of Trump voters—support providing a child care-specific tax credit to help parents better afford quality child care.
Learn more about the importance of the CDCTC at http://www.ffyf.org/tax
The First Five Years Fund provides knowledge, data and advocacy – persuading federal policymakers to make investments in the first five years of a child’s life that create greater returns for all. FFYF helps America achieve better results in education, health and economic productivity through investments in quality early childhood education programs for disadvantaged children. http://www.ffyf.org