WTAS: Historic Child Care Tax Credits Set to Benefit Millions
WASHINGTON, D.C. – U.S. Senator Katie Britt (R-Ala.) today highlighted the broad support from local community leaders, industry stakeholders, and business organizations due to her successful efforts to include modernized and increased tax credits to improve the accessibility and affordability of child care in President Trump’s Working Family Tax Cuts legislation.
Last month, Senator Britt secured a historic win with the passage of the Child and Dependent Care Tax Credit (CDCTC), the Dependent Care Assistance Program (DCAP), and the Employer-Provided Child Care Tax Credit (45F). CDCTC and 45F have not been permanently updated since 2001. Since then, child care costs have increased by 263%. DCAP has not been updated since 1986.
By modernizing the CDCTC, the most widely used tax credits for child care, nearly four million working families will receive tax cuts. Permanently updating DCAP allows parents to now set aside up to $7,500 for their pre-tax flexible spending accounts to pay for child care – a 50 % increase from a cap set in 1986. Finally, updating 45F, and giving small businesses an extra boost, will allow more employers are starting to offer child care to attract and keep top talent.
Here is what they are saying about this historic child care win:
Bloomberg: Plot Twist: Republicans Just Got Families More Money
“For me, the big win is that the new law expands the child and dependent tax credit — not to be confused with the child tax credit. The expansion of the former tax credit allows it to cover up to 50 percent of eligible child care costs, and the cap is now indexed to inflation. This tax credit was created nearly 50 years ago, with an average claimed credit of $206. Inflation and the relative cost of child care have eaten away at the size of that credit, which has not been expanded since 2001 except for a pandemic-related boost.
“But zooming out from the specifics, it’s shocking to take a step back to see that it is Republicans who have achieved the most significant concrete changes to family policy in recent memory. It’s the GOP that got the last laugh when it comes to family policy.”
Vox: How the GOP beat Democrats to a child care win
“Lawmakers plan to invest $16 billion [from the GOP megabill] into three federal tax credit programs that haven’t been permanently updated in decades. That a Republican-led Congress would lead on new child care spending is unusual and reflects changing political priorities …
“Even Democrats, who made child care central to their social agenda, failed to deliver when they held unified control in 2021 … The new child care provisions — spearheaded primarily by Sen. Katie Britt of Alabama — deliver distinct nudges toward affordability, access, and infrastructure.”
Family Matters: The Biggest Permanent Change to Child Care Tax Policy in Over Two Decades
“So it makes sense for Republicans to chart out the correct proactive steps to improve child care choices beyond simply “increase the Child Tax Credit,” which is directionally correct, but insufficient — and, as we recently saw, something that remains somewhat of an uphill slog in this iteration of the G.O.P. Sen. Britt is correct to note the political and substantive win in championing benefits that do support working families…
“…Britt’s example demonstrates what it looks like to devote political capital to supporting parents — something that more Republican lawmakers could learn from. And it shouldn’t take two-and-a-half decades before the next time lawmakers (from either party) figure out a way to improve programs that support working families.”
Newsweek: Three Wins for American Families Included in the ‘Big Beautiful Bill’
“These child care-related tax breaks work together to ease the burden on parents and help employers attract and retain talent. Initially designed to help parents offset the cost of care, they have remained largely untouched for decades, even as costs soared and family needs shifted. The improvements in the recent bill represent billions in federal investment in child care and represent one of the most significant permanent investments in care since the pandemic.
“Second, these credits have a long track record of support from both Republicans and Democrats on Capitol Hill. Members of Congress have been working on legislation to improve these tax credits for years, building support for a half-dozen bipartisan bills introduced since 2023. The new law includes many of the provisions outlined in these bills, including those in the Child Care Availability and Affordability Act, a bipartisan bill spearheaded by Sen. Katie Britt (R-Alabama) and Sen. Tim Kaine (D-Virginia) which had support from 20 senators from both sides of the aisle …
“As Sen. Britt said, the work must continue: “I am not setting down the mantle. I’m going to continue to carry it, but I think the fact that we’ve been able to effect change in this area—where it has not been done and nobody has knocked that wall down yet—I think that this is monumental.”
Bipartisan Policy Center: Bipartisan Wins for Working Families in the 2025 Reconciliation Package
“Three main tax provisions—the CDCTC, DCAPs, and 45F credit—help families offset the costs of child and dependent care or employers offset the costs of providing child care supports to their workers. Enhancements to these provisions were omitted in TCJA, and while temporarily expanded in 2021 through ARPA, they had not been meaningfully changed in over a decade.
“Throughout the 118th and 119th sessions of Congress, championed by a diverse group of stakeholders from across the political spectrum, members introduced multiple proposals to enhance these critical tax provisions. Over those past four years, BPC supported several bipartisan proposals that laid the groundwork for the OBBB, including:
“The Child Care Availability and Affordability Act, introduced in 2024 and 2025 by Sens. Katie Britt (R-AL) and Tim Kaine (D-VA), and Reps. Carbajal (D-CA), Mike Lawler (R-NY), Juan Ciscomani (R-AZ), and Sharice Davids (D-KS), which expanded the CDCTC, DCAPs, and 45F.”
U.S. Chamber of Commerce
“Childcare is an essential foundation for a strong workforce. The U.S. Chamber of Commerce applauds Senators Britt and Kaine for their commitment to improving childcare through the Child Care Availability and Affordability Act, which will make childcare more affordable and accessible for American workers.” –Rodney Davis, Head of Government Affairs
Manufacture Alabama
“We know that childcare is an essential resource for working parents. Currently, parents in Alabama make up 35% of the workforce. When parents have access to high-quality and affordable childcare, employers benefit from reduced absenteeism and productivity loss, increased employee retention, and a greater abundance of skilled workers. We applaud Senator Britt for her vision and leadership to address this major challenge and we are excited about this legislative package which will complement the Alabama Childcare Tax Credit which the Alabama Legislature passed unanimously, and Governor Ivey signed into law earlier last year.” – Jon Barganier, President and CEO
A+ Education Partnership
“Every child needs a strong start to be successful in school and life, and we support this important effort to expand access to the high-quality child care our children need.” – Mark Dixon, President
Business Council of Alabama
“Making childcare more affordable and accessible is essential for supporting working families across the nation. Last year, Alabama successfully passed legislation to establish the Childcare Tax Credit, which provides tax incentives for employers who offer childcare options and for providers who work to expand access to quality care. Senator Katie Britt is addressing this issue at the federal level to enhance resources for working families, ensuring that parents across America have access to high-quality, affordable childcare. This initiative benefits families, businesses, and communities alike, and we are proud to support her efforts to make childcare more attainable for all.” – Helena Duncan, President and CEO
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