Expanding Child Care Access Act of 2025
- Bill Number
- H.R. 1296
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-02-13: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-03-31T13:59:47Z
AI-Generated Summary
Purpose
The Expanding Child Care Access Act of 2025 aims to encourage the establishment of licensed family child care businesses by providing a financial incentive through the tax system. It introduces a new refundable tax credit to offset startup costs, making it easier for individuals to begin offering child care services from their homes.
Key Provisions
- Credit Amount and Eligibility: Eligible taxpayers can claim a refundable credit of up to $5,000 against their federal income tax for qualified startup expenses incurred in the current or previous tax year. The credit is refundable, meaning the taxpayer receives a payment even if they owe no taxes.
- Qualified Taxpayer: An individual who operates a "qualified family child care provider," defined as a home-based operation that:
- Is licensed or registered under state law and meets all relevant state and local requirements.
- Provides child care services for pay primarily at the taxpayer's main home.
- Cares for at least two children (not the taxpayer's own) for a significant part of the tax year.
- Qualified Startup Expenses: Covers costs such as:
- Licensing or registration fees.
- Supplies like diapers, food, toys, and educational materials.
- Liability insurance.
- Fencing and outdoor playground equipment (including installation).
- Necessary furniture.
- Salaries for non-taxpayer employees.
- Printers and computers.
- Required professional training.
- Home renovations or fixes needed for licensing.
- Limitations:
- The credit can only be claimed once per taxpayer (no repeats in other years).
- Expenses cannot overlap with those claimed under other tax deductions or credits.
- Administration: The U.S. Secretary of the Treasury will issue rules for implementation, including reporting requirements and coordination with state licensing agencies.
- Duration: The credit expires after 7 years from enactment.
- Effective Date: Applies to expenses paid or incurred after the bill's enactment.
Significant Changes to Existing Law
This bill amends the Internal Revenue Code of 1986 by adding a new section (36C) under the subpart for refundable credits, creating the "Licensed Family Child Care Credit." It also makes minor conforming updates to federal laws on tax credit treatments and updates the code's table of sections. No existing child care credits are altered, but this introduces a novel, targeted incentive specifically for home-based providers.
Potential Impacts
- On Citizens: Lowers financial barriers for individuals starting family child care businesses, potentially increasing the supply of affordable, home-based child care options for working parents. The one-time, refundable nature could particularly benefit lower-income entrepreneurs who might not otherwise qualify for loans or have tax liability.
- On Government Agencies: The Internal Revenue Service (IRS) will handle claims, refunds, and enforcement, potentially increasing administrative workload. The federal government may see reduced tax revenue due to credits claimed (estimated costs not specified in the bill).
- On International Relations: No direct impacts, as this is a domestic tax policy focused on U.S. child care.
Main Stakeholders Affected
- Family Child Care Providers: Primary beneficiaries, gaining up to $5,000 in startup support to launch licensed home operations.
- Parents and Families: Indirectly benefit from expanded child care availability, which could help with work-life balance and child development.
- State and Local Governments: Involved in licensing and may see more applications for child care registrations, potentially straining or enhancing local oversight resources.
- Taxpayers and Businesses: General taxpayers fund the credit through forgone revenue; suppliers of child care equipment (e.g., toy manufacturers) may see increased demand.
Notable Legal, Constitutional, or Political Implications
- Legal: As a refundable credit, it extends benefits beyond those with tax owed, aligning with precedents for social welfare tax incentives (e.g., earned income tax credit). The sunset clause provides a built-in review mechanism, allowing Congress to assess effectiveness before extension. Coordination with state licensing ensures compliance but may raise federalism questions if states vary in requirements.
- Constitutional: No apparent challenges; it promotes equal protection by supporting child care access without discriminating by race, gender, or other protected classes.
- Political: Bipartisan sponsorship (119th Congress, introduced February 13, 2025) signals broad support for addressing child care shortages, a key issue in workforce participation and family policy. The temporary 7-year term could spark future debates on permanence versus fiscal responsibility.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Conaway, Herbert [D-NJ-3]
Cosponsors (39)
Rep. Foushee, Valerie P. [D-NC-4], Rep. Barragán, Nanette Diaz [D-CA-44], Rep. Sánchez, Linda T. [D-CA-38], Rep. Pressley, Ayanna [D-MA-7], Rep. Chu, Judy [D-CA-28], Rep. Titus, Dina [D-NV-1], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Ross, Deborah K. [D-NC-2], Rep. Brownley, Julia [D-CA-26], Rep. Takano, Mark [D-CA-39], Rep. Frost, Maxwell [D-FL-10], Rep. Casten, Sean [D-IL-6], Rep. Watson Coleman, Bonnie [D-NJ-12], Rep. Ramirez, Delia C. [D-IL-3], Rep. Perez, Marie Gluesenkamp [D-WA-3], Rep. Garcia, Sylvia R. [D-TX-29], Rep. Carson, André [D-IN-7], Rep. Carbajal, Salud O. [D-CA-24], Rep. Garcia, Robert [D-CA-42], Rep. Hayes, Jahana [D-CT-5], Rep. Peters, Scott H. [D-CA-50], Rep. Tokuda, Jill N. [D-HI-2], Rep. Johnson, Henry C. "Hank" [D-GA-4], Rep. Bynum, Janelle [D-OR-5], Rep. McDonald Rivet, Kristen [D-MI-8], Rep. Salinas, Andrea [D-OR-6], Rep. Ruiz, Raul [D-CA-25], Rep. McIver, LaMonica [D-NJ-10], Rep. Cherfilus-McCormick, Sheila [D-FL-20], Rep. Fields, Cleo [D-LA-6], Rep. Tlaib, Rashida [D-MI-12], Rep. Deluzio, Christopher R. [D-PA-17], Rep. Ocasio-Cortez, Alexandria [D-NY-14], Rep. Trahan, Lori [D-MA-3], Rep. Cisneros, Gilbert Ray, Jr. [D-CA-31], Rep. Sykes, Emilia Strong [D-OH-13], Rep. Mannion, John W. [D-NY-22], Rep. Gottheimer, Josh [D-NJ-5], Rep. Landsman, Greg [D-OH-1]
Recent Actions
- 2025-02-13: Referred to the House Committee on Ways and Means.
- 2025-02-13: Introduced in House
- 2025-02-13: Introduced in House
Bill Versions
- Expanding Child Care Access Act of 2025 — issued 2025-02-13 — PDF (5 pages)