81 percent of the electorate—including 74 percent of Trump voters—support providing a Child Care Tax Credit to help parents better afford quality child care
Washington, D.C. – Earlier today, the White House and leaders on Capitol Hill released a framework of the tax reform plan developed by the Trump administration and Republicans in the House and Senate. The president and members of the administration have been outspoken about their commitment to using tax reform as a way to help families afford the cost of child care, yet the framework released today missed an opportunity to highlight an existing provision that does exactly that: the longstanding Child and Dependent Care Tax Credit.
“While we’re encouraged by statements about the importance of lowering the tax burden on working families, this framework leaves out crucial details on how the Administration will make good on its promise to help parents with the cost of work-related child care,” said First Five Years Fund (FFYF) Executive Director Kris Perry. “This framework is a starting point for lawmakers, and we look forward to working with the administration and bipartisan leaders on Capitol Hill who know that strengthening the Child and Dependent Care Tax Credit is the best way to help families with the cost of child care within tax reform.”
In order for the tax code to truly help working parents of modest means afford the cost of child care, tax reform should increase the value of the CDCTC sharply to reflect today’s rising cost of care, and should make it refundable so low- and middle-income families can benefit.
Earlier this year, the bipartisan “Promoting Affordable Childcare for Everyone (PACE) Act” was introduced by Senators Richard Burr (R-NC) and Angus King (I-ME), and Representatives Kevin Yoder (R-KS) and Stephanie Murphy (D-FL). This legislation “would enact several changes to make [the CDCTC and Dependent Care Flexible Spending Accounts] immediately more generous and modify them to reflect the changing economic landscape,” according to a press release from the senators. FFYF has endorsed this legislation, and has been working to increase support in Congress.
“Nearly 15 million children in America under the age of six have working parents,” continued FFYF’s Perry. “For many of these families, paying for child care presents a significant and growing burden that impedes their ability to enter, return, or remain in the workforce. While there are a handful of tax credits and deductions that support families with children, only the CDCTC was designed to help working parents with the cost of work-related child care expenses. Eliminating the CDCTC will absolutely harm families and keep children from accessing the quality child care opportunities that are proven to prepare them for success when they begin school.”
According to a recent national poll, 81 percent of the electorate—including 74 percent of Trump voters—support providing a child care tax credit to help parents better afford quality child care and early education programs, with low- and middle-income parents who need more help getting a larger credit.
An overwhelming number of Americans struggle with high costs and shortages of quality child care providers. In the same vein that we use tax credits to make higher education more accessible, the tax code should also make care for children from birth through age five a priority. A robust child care tax incentive will help to change that dynamic by making care more affordable for parents, and incentivizing growth and expansion in the early childhood education sector, resulting in increased access and improved care.
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