Child and Dependent Care Tax Credit Enhancement Act of 2025
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Overview
This bill, the Child and Dependent Care Tax Credit Enhancement Act of 2025, increases the amount of the Child and Dependent Care Tax Credit that families can claim. It raises the maximum credit amount from $3,000 to $8,000 for single filers and $16,000 for married couples, and modifies how the credit percentage is calculated based on a taxpayer’s adjusted gross income. Furthermore, the bill makes the credit fully refundable for certain taxpayers who meet specific residency requirements.
Key provisions
- Increases the maximum child and dependent care credit to $8,000 for single filers and $16,000 for married couples filing jointly.
- Reduces the applicable percentage of the credit based on adjusted gross income, phasing out the credit for higher-income taxpayers.
- Allows a fully refundable credit for taxpayers with a principal place of abode in the United States for more than half the year.
- Provides special rules for married couples filing separate returns to ensure equitable credit allocation.
- Includes an inflation adjustment to the credit limits, indexed to the cost of living.
- Modifies the phaseout percentage based on adjusted gross income.
- Clarifies that the credit is treated as a credit allowed under subpart C for taxpayers with a principal place of abode in the United States.
Who is affected
- Families with young children and dependent care expenses
Bill text
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Sponsors
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28 on record
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