Sponsors (4)
The bill boosts pay and encourages higher credentials for credentialed staff in licensed child-care centers, improving quality and staffing stability, but it is temporary, may exclude low-income and many family/home providers, and introduces administrative and filing complexity.
Eligible child-care workers (qualified providers at licensed centers) receive a tax-credit boost of up to $4,500 per year for up to three years, increasing their take-home pay.
Child-care staff who obtain or hold higher credentials (associate/bachelor degrees or CDA) are incentivized to pursue and maintain those qualifications, which can improve early childhood education quality for children.
Workers employed in licensed child-care facilities who meet the minimum hours requirement (1,200 hours) are encouraged to remain in regulated settings, which can help stabilize staffing and availability at licensed centers for parents and families.
Low-income child-care providers with little or no income-tax liability may not benefit because the credit is nonrefundable, leaving the lowest-earning providers without the intended support.
Family or home-based child-care providers who primarily care for their own children can be excluded by the 25% cap, which may leave many small or family providers ineligible and reduce support for home-based care options.
The program’s three-year cap and elective-claim structure limit sustained long-term support and add annual complexity to tax-filing choices for providers.
Based on analysis of 2 sections of legislative text.
Creates a new elective, nonrefundable income tax credit for eligible child care providers of $1,500–$4,500 per year for up to three years, tied to education, credential, hours, and licensing requirements.
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 worth $4,500 (bachelor’s degree), $3,000 (associate’s degree), or $1,500 (other). Providers may elect the credit for up to three taxable years and must meet education, credentialing, work-hour, licensing, and client-composition requirements. The credit applies to taxable years beginning after December 31, 2026.