Britt aims to increase child care tax credit in ‘big, beautiful bill’
senator Katie Britt (R-AL) is advocating for an increase in the child and dependent care tax credit (CDCTC) as part of the “One Big Beautiful Bill Act,” which has recently passed the House and is now in the Senate. Britt aims to integrate enhancements to the CDCTC into the reconciliation bill, emphasizing its importance for families facing high childcare costs. Currently, the CDCTC allows families to deduct a portion of child care expenses, with caps set at $3,000 for one dependent and $6,000 for multiple dependents. Britt has previously introduced bipartisan legislation aimed at increasing these limits.
Britt highlights the considerable financial burden childcare places on young families,who reportedly spend up to 22% of their income on these costs. She believes that expanding the CDCTC will empower parents rather than create new government entitlements.Additionally, Sarah Rittling, executive director of the First Five Years Fund, remarked that the credit’s benefit levels have not kept pace with inflation or rising care costs, exacerbating the strain on working families.
A similar effort earlier this year by Britt and Senator Tim Kaine (D-VA) sought to expand CDCTC to $2,500 for one child and $4,000 for two or more, with a portion of the credit being refundable to assist low- and middle-income families. Britt expresses optimism that other Senate members recognize the need to support working parents and the need for significant changes to the CDCTC, especially given the lack of attention it has received compared to the child tax credit. While the House bill raised the child tax credit, it did not address the CDCTC. Senator Josh hawley (R-MO) has also expressed interest in increasing the child tax credit even further.
Katie Britt pushes to increase child care tax credit in One Big Beautiful Bill Act
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.
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