SCHNEIDER INTRODUCES BIPARTISAN BILL EXPANDING EMPLOYER-PROVIDED CHILD CARE TAX CREDIT

"Finding quality affordable child care is an unacceptable crisis in this country, and we need to use all the tools we have to make child care more accessible for all families," said Rep. Schneider. "Incentivizing employers to provide child care is a crucial step in that direction. Not only do we need more employers to step up to provide this benefit, but we also need them to increase the availability of openings so parents can actually use child care in their workplaces. This bill aims to do just that."

The Child Care for American Families Act will expand and increase the utilization of the Section 45F tax credit to incentivize businesses to provide child care for their employees. The bill would increase the maximum annual tax credit amount to help offset a greater percentage of the costs for employer-provided child care.

"In Tennessee, our economy is losing $2.6 billion annually because of insufficient access to child care. This is a nationwide problem," said Congressman Kustoff. "That is why I introduced the Child Care for American Families Act, to incentivize businesses to construct and operate child care centers. This legislation will make it easier for employers to hire and retain employees. I urge my colleagues to support this important bill that will help get families back to work."

Currently, the 45F tax credit allows businesses to reduce their income tax liability by up to $150,000 per year by claiming up to 25 percent of child care spending. Eligible expenses include the cost of a child care facility and employees working for that facility, as well as costs for contracting with a child care facility. Employers are also eligible to claim up to 10 percent of expenses incurred to help employees find child care services.

The Child Care for American Families Act would increase the tax credit to 40 percent of the first $2 million in child care expenses for a maximum credit of $800,000 each year. Both the tax credit and maximum amount would be higher for small businesses and businesses in rural and low-income areas, where child care shortages are more acute.

This bill would also ensure that up to $5,000 in child care benefits are excluded from income for the employee without having to jump through additional hoops for the exclusion, as is currently required. Lastly, this bill would establish a new taxpayer-outreach program at the Internal Revenue Service to increase awareness of this tax credit to increase its utilization.

The full text of the bill can be found here.

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