Republican Senator Katie Britt Pushes To Enhance Child Care Tax Credit

Republican Alabama Sen. Katie Britt is pushing Republicans to strengthen child care benefits in the party’s tax legislation expected later this year.

The proposal Britt introduced is cosponsored by Democratic Virginia Sen. Tim Kaine. Britt’s and Kaine’s childcare proposal dives into the crucial issue in two parts: the Child Care Availability and Affordability Act and the Child Care Workforce Act.

The CDCTC tax credit would allow for lower-income families to benefit from the tax credit for the first time, alleviating their out-of-pocket childcare costs. Under the reformed CDCTC, families with one child would receive a $2,500 tax credit, and those with two or more children would get $4,000.

The second aspect of the Availability and Affordability Act is the DCAP. This program will be expanded, allowing for families to deduct 50% more in expenses with a cap of $7,500. The DCAP is currently combined with the CDCTC, but this proposal would separate them, giving middle class families that aren’t eligible for the CDCTC access to the tax credit.

The final part of the Act is the Employer-Provided Child Care Tax Credit, which “radically bolsters” the preexisting tax credit, incentivizing businesses to provide childcare for their employees. The business tax credit would leap from its current $150,000 to $500,000, as well as cover 50% of expenses rather than 25%. If a business is small enough, or multiple small businesses come together to do joint applications and pool resources, the credit would jump even higher to $600,000.

https://x.com/SenKatieBritt/status/1896984096611696816

The second part of the proposal, the Child Care Workforce Act, is new. The pilot program would establish a competitive grant system, incentivizing state and local governments, Indian Tribes and Tribal organizations interested in participating in pay supplement programs for childcare workers. The program is designed to increase the supply of care providers and reduce turnover. This program has been tested in D.C., Maine, Nebraska and Virginia, proving to be successful in worker retention, well-being and satisfaction. The grants would be applicable for home-based and center-based childcare providers as long as they are licensed under the state, and evaluations of care quality, availability, impact and turnover are mandatory to benefit from the program.