Child Care Availability and Affordability Act

Key Provisions

• Lets families claim a new, refundable tax credit for child and dependent care costs, starting at 50% for lower incomes and gradually decreasing for higher incomes.
• Caps the new family tax credit at $5,000 for one person needing care and $8,000 for two or more.
• Increases the tax credit for businesses that provide child care to their employees from 25% to 50% of expenses.
• Raises the maximum tax credit for businesses providing child care from $150,000 to $500,000.
• Gives small businesses an even larger tax credit of 60% of child care expenses, up to $600,000.
• Increases the amount employees can exclude from their taxable income for dependent care assistance from $5,000 to $7,500 per year.