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Washington, D.C.- April 24, 2025, Representatives Danny K. Davis (D-IL), Suzan DelBene (D-WA), and Linda Sánchez (D-CA) introduced the Child and Dependent Care Tax Credit Enhancement Act to permanently expand the child care tax credit to raise the maximum credit from $1,050 to $4,000 for 1 child and from $2,100 to $8,000 for 2 or more children.  This bill is led by Senators Tina Smith (D-MN), Ron Wyden (D-OR), and Patty Murray (D-WA) in the Senate. The Child and Dependent Care Tax Credit (CDCTC) is the only tax credit that helps working parents offset the rising cost of child care.  In 2021, Democrats successfully enhanced both the CDCTC and the Child Tax Credit because both credits are essential to support parents’ ability to provide for their families.  While 100% of the CDCTC reimburses parents for actual child care costs paid to work, parents mostly use the Child Tax Credit to defray other significant costs of caring for a child, such as food, rent, and clothing. Unfortunately, as currently structured, the CDCTC fails to meet the needs of tens of millions of working families. Very few families receive meaningful benefit from the credit due to the extremely low phase-out level of $15,000, the low expense limits, the non-refundable nature, and the loss of benefit due to inflation.  For example, the Tax Policy Center estimates that only 13% of families with children claimed the CDCTC in 2022.  The Child Care and Dependent Credit Enhancement Act will increase the maximum credit amount to $4,000 per child up to $8,000 for two or more children, expand eligibility to low-income families, make the credit available to married couples who file separately due to high student loan debt, and retain the credit’s value over time by indexing it to inflation. Compared to 2019, low-income working parents quadrupled their credit received in 2021.

Washington, D.C. - On Thursday, April 10, 2025, Representatives Danny K. Davis (D-IL), Blake Moore (R-UT), Gwen Moore (D-WI), Randy Feenstra (R-IA), Don Bacon (R-NE), Sydney Kamlager-Dove (D-CA), and Robert Aderholt (R-AL) introduced the bipartisan, bicameral Adoption Tax Credit Refundability Act of 2025. The legislation would help children find permanent, loving families by removing income as a barrier to adoption. Senators Kevin Cramer (R-ND) and Amy Klobuchar (D-MN) will introduce companion legislation in the Senate. The Adoption Tax Credit helps families offset some of the costs of adoption, especially for children with special needs. Currently, the tax credit disadvantages low- and middle-income families, in particular families with annual incomes between $30,000 to $50,000. Thus, the credit inadvertently creates barriers to permanency for a substantial number of families. During the Great Recession, Congress allowed families to receive the Adoption Tax Credit if the credit exceeded their tax liability recognizing that the economic hardship could prevent families from adopting or exact a heavy financial toll from families choosing adoption. The Adoption Tax Credit Refundability Act of 2025 would again make this credit refundable to remove income as a barrier to adoption to help more children join permanent, loving families.