# Child and Dependent Care Tax Credit Enhancement Act of 2021

This bill makes it easier and more valuable for working parents to get tax breaks when they pay for childcare. Right now, if you have kids and pay for daycare, preschool, or an after-school program so you can work, you can claim a tax credit—basically money back on your taxes. This bill improves that credit in several important ways.

The main change is that it increases the amount of money you can claim back. Currently, families can get a credit on up to $3,000 in childcare expenses per child (or $6,000 for two or more kids). This bill raises those limits, meaning you can claim back money on more of what you actually spend on care. It also makes the credit more generous by increasing the percentage of your expenses you can get back as a credit. For lower and middle-income families especially, this means more money returned when you file your taxes. The bill also makes it easier for families to use this credit by simplifying some of the rules around what types of care qualify.

Who benefits most? Working parents and guardians who pay for childcare, particularly those with lower to moderate incomes. If you're struggling to afford daycare while working, this gives you a bigger tax break to help offset those costs. The changes make the tax code recognize that childcare isn't optional for many working families—it's a necessary expense, just like commuting to work. By making the credit more valuable, the bill puts more money back in the pockets of families who need it most.

Child and Dependent Care Tax Credit Enhancement Act of 2021

Casey, Robert P., Jr.

Child and Dependent Care Tax Credit Enhancement Act of 2021 This bill modifies the tax credit for employment-related expenses incurred for the care of a taxpayer's dependent to (1) increase to $400,000, the adjusted gross income threshold level above which the credit is incrementally reduced; (2) increase the dollar limits on the allowable amount of the credit; (3) specify rules for married couples filing separate returns; (4) allow an inflation adjustment to the adjusted gross income threshold and the maximum credit amounts, beginning after 2022; and (5) make the credit refundable.