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To amend the Internal Revenue Code of 1986 to increase the amount allowed as a credit under the expenses for household and dependent care services credit and teh employer-provided child care credit.
2/19/2025, 9:35 AM
Summary of Bill HR 1426
Specifically, the bill proposes to raise the maximum amount that can be claimed as a credit for household and dependent care services from $3,000 to $6,000 for one qualifying individual, and from $6,000 to $12,000 for two or more qualifying individuals. This increase in the credit amount would allow individuals to receive a larger tax benefit for the expenses they incur for child care and dependent care services.
Additionally, the bill aims to increase the employer-provided child care credit, which is a credit that employers can claim for providing child care services to their employees. The bill proposes to raise the maximum amount that can be claimed as a credit for employer-provided child care from $150,000 to $300,000. This increase in the credit amount would incentivize employers to provide child care services to their employees and help alleviate the financial burden of child care costs for working parents. Overall, Bill 119 HR 1426 seeks to provide more financial support to individuals and families who incur expenses for child care and dependent care services by increasing the amount allowed as a credit under the expenses for household and dependent care services credit and the employer-provided child care credit.
Congressional Summary of HR 1426
This bill doubles the maximum amount that an individual may claim as a federal tax credit for qualified child and dependent care expenses and increases the maximum amount an employer may claim as a federal business tax credit for providing certain child care services to employees.
Under the bill, the annual maximum amount allowed for the child and dependent care tax credit is increased to $6,000 (from $3,000) for individuals with one qualifying child or dependent, or to $12,000 (from $6,000) for individuals with two or more qualifying children or dependents. (Under current law, an individual may claim a nonrefundable tax credit for a portion of qualified child and dependent care expenses paid so that the individual or the individual’s spouse can work or look for work.)
Further, the bill increases to $400,000 (from $150,000) the annual maximum amount that an employer may claim as a tax credit for providing certain child care services to employees. (Under current law, an employer may claim a nonrefundable business tax credit for a percentage of qualified child care facility expenses and child care referral and resource expenses.)
