Washington, D.C. — Today, U.S. Senator Tina Smith (D-MN) introduced the Child and Dependent Care Tax Credit Enhancement Act, legislation to help more working families cover a greater share of the high cost of childcare. Senator Smith, a member of the Senate Finance Committee, was joined by U.S. Senators Jeanne Shaheen (D-NH), Raphael Warnock (D-GA), Patty Murray (D-WA) and Ron Wyden (D-OR), Chair of the Senate Finance Committee in introducing the bill.
The Child and Dependent Care Tax Credit Enhancement Act would permanently expand the Child and Dependent Care Tax Credit (CDCTC). This bill would help ease the burden of high childcare costs on working families by increasing the maximum tax credit to $4,000 per child, allowing families to receive up to $8,000 in tax credits to offset up to $16,000 in expenses. It would also make the credit refundable to ensure low-income working families can benefit. The credit would also be indexed to inflation to retain its value over time.
“I constantly hear from families in Minnesota who are struggling with the high cost of childcare. For some, it rivals mortgages and is even higher than tuition at the University of Minnesota. Families need real relief and this bill will lower costs and put more money back into the pockets of parents,” said Senator Smith. “When childcare works, everything else does, too—families thrive, the economy grows, and our communities get stronger. That’s why I’m committed to fighting to lower costs and improve access to childcare.”
“No matter where I go in New Hampshire, families tell me about how much they struggle to access affordable child care,” said Senator Shaheen. “The Child and Dependent Care Tax Credit is a proven and effective tool for bringing quality, affordable child care within reach for more families. Expanding this credit to keep up with the rising cost of child care is the right thing to do for workers, families and our nation’s economy.”
“American families have to deal with hefty expenses when raising a child or caring for a loved one. That’s why the Child and Dependent Care Tax Credit Enhancement Act is so crucial, especially right now,” said Senator Reverend Warnock. “It will help parents and caregivers afford caretaking costs in a time when margins are tight for many families across the country. Tax cuts should go to hardworking Americans, not the wealthiest people in the nation.”
“Instead of addressing the growing child care crisis, Trump is indiscriminately firing the very workers who help child care and Head Start centers keep their doors open—making child care more expensive and harder to get for working parents,” said Senator Murray. “While Trump raises families costs by nearly $4000 a year and pushes child care even farther out of reach, my Democratic colleagues and I are continuing to fight to lower families’ costs in every possible way, and I am proud to reintroduce the Child and Dependent Care Tax Credit Enhancement Act as one additional way to help get families some additional relief to afford the child care they need.”
“The cost of raising a family in this country is already way too high, and it’s getting even more expensive as Trump’s global tariffs jack up the cost of food, cars and products families use every day,” said SenatorWyden. “This proposal is a commonsense, pro-family policy aimed at helping parents and people caring for loved ones, and it’s striking that this kind of bill is nowhere to be found in the Republican tax agenda that costs a staggering $7 trillion. Trump and Republicans are locked in on giving trillions in new handouts to corporations and the wealthy and sticking everybody else with the bill, but pro-family proposals like this one prove that there’s a better way forward.”
The Child and Dependent Care Tax Credit Enhancement Act would:
- Increase the maximum credit amount to $4,000 per child, allowing families to receive up to $8,000 in tax credits to offset up to $16,000 in expenses;
- Automatically adjust it to keep pace with inflation;
- Save money by phasing out the credit for families making more than $400,000; and
- Ensure low-income families can benefit from the tax credit by making it refundable.
Throughout her time in the Senate, Senator Smith has led efforts to expand access to childcare and make it more affordable for families. She led the charge for $50 billion for childcare, which was necessary to stabilize the childcare sector during the pandemic. Together these resources kept over 220,000 childcare providers nationwide afloat to care for as many as 10 million children. Smith has strongly backed increases in funding for the Child Care and Development Block Grant program and Head Start. She has introduced bipartisan legislation to increase the supply of childcare in rural communities. Smith also backs several legislative proposals to reform our childcare system, including the Child Care for Working Families Act and the Child Care for Every Community Act. One of the first bills she authored in the Senate was the Child Care Supply Improvement Act, which would fund childcare facilities and help childcare providers navigate important health and safety requirements, in addition to supporting the creation of childcare businesses.
In addition to Senators Smith, Shaheen, Warnock, Murray, and Wyden, the Child and Dependent Care Tax Credit Enhancement Act is cosponsored by Senators John Fetterman (D-PA), Brian Schatz (D-HI), Tammy Duckworth (D-IL), Mazie Hirono (D-HI), Chris Van Hollen (D-MD), Dick Durbin (D-IL), Amy Klobuchar (D-MN), Martin Heinrich (D-NM), Maria Cantwell (D-WA), Angus King (I-ME), Jeff Merkley (D-OR), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Elissa Slotkin (D-MI), Jack Reed (D-RI), Michael Bennet (D-CO), Chris Murphy (D-CT), Peter Welch (D-VT), Ruben Gallego (D-AZ), Chuck Schumer (D-NY), Adam Schiff (D-CA), Tammy Baldwin (D-WI), Kirsten Gillibrand (D-NY), Sheldon Whitehouse (D-RI).
The bill is also endorsed by the National Women’s Law Center Action Fund, Child Care Aware of America, Save the Children, First Focus Campaign for Children, First Five Years Fund, Center for Law and Social Policy (CLASP), Moms Rising, National Association for the Education of Young Children (NAEYC), Zero to Three, Society for Human Resource Management (SHRM) and the Early Care and Education Consortium (ECEC).
Read more about the Child and Dependent Care Tax Credit Enhancement Act HERE.
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