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Amends paragraph (1) of 26 U.S.C. 21(c) by striking "$3,000" and inserting "$6,000"; amends paragraph (2) by striking "$6,000" and inserting the text shown in the bill ("inserting2,000").
Strikes subsection (g) of 26 U.S.C. 21 and redesignates subsection (h) as subsection (g).
Replaces the dollar amount specified in 26 U.S.C. 45F(b) with $300,000.
Amends subsection (a)(2) of 26 U.S.C. 129 by replacing the dollar-amount language in subparagraph (A) and by striking subparagraph (D).
Referred to the House Committee on Ways and Means.
Introduced February 18, 2025 by Sharice Davids · Last progress February 18, 2025
Doubles key dollar limits used for the child and dependent care tax credit and raises the tax treatment of employer-provided dependent care, and it increases the maximum employer-provided childcare tax credit to $300,000. The changes amend the Internal Revenue Code and take effect for taxable years beginning after December 31, 2024.
The law raises individual tax relief for families who pay for child or dependent care, expands the tax-preferred treatment of employer-dependent-care assistance, and makes the employer childcare credit substantially larger — all intended to lower out-of-pocket childcare costs and encourage employers to provide childcare support.