WASHINGTON, D.C. — In an effort targeting the escalating child care expenses faced by American families, U.S. Senators Bob Casey (D-PA), Ron Wyden (D-OR), and Patty Murray (D-WA) this week introduced legislation to permanently expand child care tax credits. The Child and Dependent Care Tax Credit Enhancement Act seeks to reduce economic strains by maintaining tax cuts that Senator Casey previously endorsed in the American Rescue Plan.
The bill aims to perpetuate the Child and Dependent Care Tax Credit (CDCTC) expansion, which quadrupled the average family credit from $593 to $2,158. Critically, the enactment also allowed lower-income families to be eligible for this credit through its refundable nature for the first time.
“Child care costs were too high for too many families well before the pandemic and that problem isn’t going away unless we take action to lower costs,” Senator Casey stressed, emphasizing the urgent need to make child care affordable for all families.
Senator Wyden echoed this sentiment, stating that the cost of raising a family nationwide is excessively high, with child care being a major expense. The proposed tax credit serves as not only a financial benefit for parents but also a pathway to economic fairness for all workers. He further expressed that this bill would afford families the flexibility to raise their families while pursuing their careers as they see fit.
The proposed enhancement act increases the maximum credit amount to $4,000 per child and ensures automatic adjustment in line with inflation. Moreover, the credit would gradually phase out for families earning more than $400,000. Importantly, the credit’s refundability will ensure that lower-income families also benefit, allowing them to receive up to $8,000 each.
Senator Casey’s work builds on the recent expansion of the child care tax credit implemented by Governor Shapiro and the Pennsylvania state legislature. It aims to make the expanded federal tax credit a permanent feature, significantly benefitting families across Pennsylvania.
This bill, sitting on the shoulders of collective efforts to alleviate child care costs, has already secured support from other senators and is endorsed by several national organizations such as the National Women’s Law Center and Child Care Aware, among others.
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