Sen. Katie Britt (R-AL) said she is pushing to increase the size of the child and dependent care tax credit in the Senate as part of the One Big Beautiful Bill Act.
Britt, who has previously sponsored bipartisan legislation to boost the credit, told the Washington Examiner this week that she will try to get changes to the CDCTC added into the reconciliation bill now that it has passed the House and is over to the Senate.
“I would absolutely love to,” Britt said about enhancing the credit in reconciliation. “I think obviously what we know about Nov. 5 is that we are now the party of parents and the party of hardworking Americans. I can think of no better way to show that than tackling the issue of affordability and reliability of child care.”
Britt said she thinks there is support in the Senate to boost the CDCTC in reconciliation.
The child and dependent care tax credit differs from the more commonly referenced child tax credit. The CDCTC is a nonrefundable credit that gives families help paying for the care of children and other dependents.
While the child tax credit can be redeemed by parents per child, the CDCTC covers care costs. The highest level of care expenses that taxpayers can claim on their taxes is $3,000 for a single dependent and $6,000 for multiple dependents.
Taxpayers can receive 20% to 35% of those care expenses as the CDCTC credit, meaning the maximum credit that taxpayers can currently get is $1,050 for one dependent and $2,100 for multiple.
Britt said young parents spend 22% of their income on care costs for children up to 5.
“So doing this is a way that we put parents back in the driver’s seat, not creating another government entitlement,” Britt said.
Sarah Rittling, executive director of the First Five Years Fund, pointed out to the Washington Examiner that the current CDCTC benefit levels were set in 2001 and have not been adjusted to keep pace with inflation or increasing care costs.
“It’s a real strain on working families, the cost of care, and we know that it’s limiting choices that families want to or have to make,” Rittling said.
Earlier this year, along with Sen. Tim Kaine (D-VA), Britt cosponsored the Child Care Availability and Affordability Act, which would have expanded the maximum CDCTC to $2,500 for families with one child and $4,000 for families with two or more children.
The legislation would also make the credit partially refundable, which would offer more assistance tailored directly to low- and middle-income working families.
Britt told the Washington Examiner that she thinks there is support for enhancing the care credit in the Senate.
“I think a multitude of my colleagues understand the importance of this and want to support parents, want to support hardworking Americans, and are excited about doing this, so I sure hope so,” she said.
While the House version of the reconciliation legislation increased the child tax credit, it offered no boost to the CDCTC, which has gotten less attention on Capitol Hill and in the media.
The House-passed bill would raise the child tax credit to $2,500 through 2028. The increase to $2,500 is essentially an inflation adjustment, given that’s about how much the credit would need to be to have the same purchasing power as when it was doubled to $2,000 as part of the 2017 tax cuts.
Sen. Josh Hawley (R-MO) told the Washington Examiner earlier this week that he would push for an increase in the child tax credit.
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Hawley said that he would like to double the $2,500 that was included in the House legislation.
“I’d like to take it to $5,000, but any incremental increase would be tremendous,” Hawley said.