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

WASHINGTON – Rep. Brad Schneider (IL-10) and Rep. David Kustoff (TN-08) introduced the Child Care for American Families Act to expand the childcare tax credit for employer-provided care, also known as the Section 45F tax credit. The bill is also co-led by fellow Ways and Means Committee members Reps. Terri Sewell (AL-07) and Claudia Tenney (NY-24).

“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,” says Rep. Schneider. “Incentivizing employers to provide childcare 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 childcare 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 childcare for their employees. The bill would increase the maximum annual tax credit amount to subsidize a greater percentage of the costs for employers to help address the crisis in childcare access.

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

The Child Care for American Families Act would increase the tax credit to 40% of the first $2 million in childcare 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 childcare shortages are more acute.

This bill would also allow multiple employers to jointly operate a child care facility and apply for the credit. 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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