Child Care for American Families Act

This bill boosts the tax break for employers that help provide child care for their workers. The basic credit goes up to 40% of qualified child care costs. Small employers get 50%, and projects in certain census tracts or rural counties get 60%. There are caps: the credit can’t be more than $1.2 million a year, and only up to $2 million in child care spending can count toward the credit each year. These changes would apply to tax years that start after the bill becomes law.

The Treasury Department must issue guidance, including how the rules work for facilities used by multiple employers, and set up a public awareness program within a year to help employers learn about and claim the credit. A government study is also required within 12 months to look at state and local rules that make employer child care harder, and recommend ways to keep kids safe while lowering red tape, including for multi-employer and multi-state providers .

• Who is affected: Employers that offer on-site child care or help employees access child care; especially small businesses (500 or fewer employees) and those in designated census tracts or rural counties.
• What changes: Higher credit rates (40%, 50%, or 60%) and new annual caps ($1.2M credit; $2M in eligible spending).
• When: Applies to tax years starting after enactment; outreach within 1 year; study due in 12 months .