Sponsors (3)
The bill provides a targeted wage-related credit to incentivize credentialed staff and stabilize licensed child-care centers—potentially improving quality—but limits duration, excludes many home-based providers, and includes refundability/administrative features that may leave the lowest-paid workers unable to benefit and add compliance complexity.
Qualified child-care workers would receive a cash boost up to $4,500 per year (for up to 3 years), increasing take-home pay for credentialed providers.
The policy encourages higher workforce qualifications (associate/bachelor degrees and CDA credentials), which could improve early childhood education quality for children.
Tying the credit to work in licensed facilities and a minimum number of hours (1,200) incentivizes staff to stay in regulated centers, potentially increasing staffing stability at licensed child-care programs.
Because the credit is nonrefundable, low-income eligible providers with little or no income tax liability may not receive the full benefit (or any benefit), limiting help to the lowest-paid workers.
The program is time-limited (3-year cap) and requires elective annual tax claims, restricting long-term support and adding recurring complexity to filing decisions for providers.
Providers who primarily care for their own family (subject to a 25% cap) are largely excluded, leaving many family child-care providers and small home-based businesses without access to the benefit.
Based on analysis of 2 sections of legislative text.
Creates a new nonrefundable individual income tax credit of $1,500–$4,500 for eligible child care providers, claimable up to three tax years.
Official title: Amend the Internal Revenue Code of 1986 to provide incentives for students to earn child care-related degrees and to work in child care facilities.
Introduced June 24, 2026 by Jeanne Shaheen · Last progress June 24, 2026
Creates a new nonrefundable individual income tax credit for eligible child care providers who meet education, credentialing, hours worked, and licensing requirements. The credit amount is $4,500 for those with a bachelor’s degree, $3,000 for an associate’s degree, or $1,500 otherwise, and may be claimed for up to three taxable years per individual. Eligibility requires holding a BA or AA (or meeting the lower-tier rule), an active Child Development Associate credential, performing at least 1,200 hours of child care services in a licensed facility (with no more than 25% of children being the provider’s or spouse’s), and the election may not overlap prior three-year elections. The credit applies to tax years beginning after December 31, 2026.