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119-hr-1067119th CongressWALLET

LITTLE Act of 2025

Sponsored By: Representative Gottheimer, Josh [D-NJ-5]

Introduced

Summary

childcare provider startup credit: This bill would create new tax supports to expand childcare access and cut costs, centered on a childcare provider startup credit that offsets early expenses for new providers.

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  • Families and working parents would see expanded childcare capacity and lower costs as the bill aims to increase provider supply and affordability.
  • Childcare providers and entrepreneurs could claim a credit equal to 30 percent of qualified startup expenses paid or incurred in the two years before the taxable year, subject to a $10,000 per-taxpayer cap and requirements to meet state or local rules and serve two or more children.
  • The credit would be nonrefundable, added to the General Business Credit as section 45BB, barred from double-counting with other deductions or credits, and would apply to qualifying expenses paid or incurred after enactment.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 2 benefits, 0 costs, 0 mixed.

New tax credit for child and dependent care

If enacted, you could claim a nonrefundable credit for work-related child or dependent care. The rate starts at 50% and drops by 1% for each $2,000 (or part) your AGI is over $15,000, but not below 35%. You can count up to $7,500 for one person or $15,000 for two or more, minus any dependent care FSA amounts. Expenses are limited to your earned income (or the lower spouse’s income if married); married couples generally must file jointly. If your spouse is a full-time student or disabled, they would be treated as having some earnings. Overnight camps do not count, and you must list the provider’s name, address, and tax ID. It would apply to tax years starting after enactment, with caps indexed for inflation after 2024.

New startup tax credit for childcare providers

If enacted, small childcare providers could claim a new nonrefundable startup credit. It would equal 30% of eligible startup costs, up to $10,000 total across all years. You must meet state or local rules and serve at least two children for a large part of the year. Only startup costs paid in the two years ending on the last day of your tax year would count. You cannot also deduct or credit those same expenses. It would apply to expenses paid or incurred after enactment.

Sponsors & CoSponsors

Sponsor

Gottheimer, Josh [D-NJ-5]

NJ • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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