A bipartisan group of lawmakers has introduced a bill that aims to provide financial relief to parents by expanding child tax credits. The proposed legislation, known as the Affordable Childcare Act, is spearheaded by representatives from both sides of the political spectrum.
The current child tax credit system offers parents a refund of up to $2,000 for each dependent under the age of 17. However, the new bill seeks to significantly increase this amount, with provisions that could potentially give parents up to $6,000 per child or $12,000 for two or more dependents.
In addition to boosting individual tax credits, the bill also includes measures to enhance tax benefits for businesses that support childcare services for their employees. If passed, qualifying workplaces could receive up to $300,000 per year in tax credits.
This initiative comes in response to the growing concerns of families struggling to afford childcare expenses. Both Republican and Democratic campaigns had highlighted the need for an expanded child tax credit during the 2024 presidential race, reflecting a bipartisan effort to address this issue.
While there is bipartisan support for the bill, its fate remains uncertain in Congress. Political divisions over government funding and spending priorities, as well as ongoing discussions around a larger tax package, could impact the bill's progress.
Republicans are also considering a separate tax package that they aim to pass through the budget reconciliation process. This follows efforts to extend certain provisions of the 2017 Tax Cuts and Jobs Act, including the child tax credit increase from $1,000 to $2,000.
If Congress fails to extend these tax cuts by the end of 2025, the original parameters would revert to previous levels. Notably, temporary increases to the child tax credit during the COVID-19 pandemic are set to expire if not extended.
