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119-hr-3155119th CongressWALLET

Child Care for American Families Act

Sponsored By: Representative Kustoff, David [R-TN-8]

Introduced

Summary

Restructures and raises the employer-provided child care tax credit to give bigger, targeted tax breaks for small employers and for child care facilities in high-need areas. It replaces the flat 25 percent credit with tiered "applicable percentages," adds dollar caps on credits and expenditures, requires guidance for multi-employer facilities, funds public outreach, and orders a GAO study on regulatory barriers.

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  • Employers and small businesses: Would change the credit from a flat 25 percent to tiered rates. The bill sets an "applicable percentage" of 40 percent generally, 50 percent for an "eligible small business" (averaging 500 or fewer employees), and 60 percent for expenditures tied to a facility in an "eligible area." The aggregate credit would be capped at $1.2 million per year and the qualified expenditures considered would be capped at $2.0 million per year.
  • Child care providers and multi-employer operators: Would require Treasury guidance on how the credit applies to multi-employer facilities. The Comptroller General must report within 12 months on regulatory requirements, compliance costs, and options to reduce cross-State barriers while keeping safety and quality.
  • Taxpayers and outreach: Would create a public-awareness program within one year to inform eligible taxpayers about the credit and how to claim it, and the GAO study would recommend ways to standardize regulations to encourage employer participation.

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Bill Overview

Analyzed Economic Effects

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

Bigger tax credit for employer child care

If enacted, employers could claim a larger child care tax credit. The credit would cover 60% of eligible costs in eligible areas, 50% for small businesses, and 40% otherwise. Businesses could count up to $2,000,000 of spending, and the credit would not exceed $1,200,000 per year. A small business would mean 500 or fewer employees on average in either of the two prior years. Eligible areas would include certain low‑income census tracts or rural counties; changes would apply to tax years that begin after enactment.

Treasury outreach and guidance on child care credit

If enacted, Treasury would set up a public awareness program within one year about the employer child care credit and how to file. It would use methods to reach eligible taxpayers. Treasury would also issue guidance on how the credit applies to multi‑employer child care facilities. These steps would not change who can claim the credit or the dollar limits.

Sponsors & CoSponsors

Sponsor

Kustoff, David [R-TN-8]

TN • R

Cosponsors

  • Rep. Tenney, Claudia [R-NY-24]

    NY • R

    Sponsored 5/1/2025

Roll Call Votes

No roll call votes available for this bill.

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