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HR 2994
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Child and Dependent Care Tax Credit Enhancement Act of 2025

To amend the Internal Revenue Code of 1986 to enhance the Child and Dependent Care Tax Credit and make the credit fully refundable for certain taxpayers.

Introduced Apr 24, 2025

Latest action (Apr 24, 2025) Referred to the House Committee on Ways and Means.

Referred to
Ways and Means Committee
Policy area
Taxation
Issues
Economy & Taxes

Summary
  • Increases the Child and Dependent Care Tax Credit percentage to 50 percent, reduced by 1 percentage point for each $2,000 of income over $125,000, with a minimum of 20 percent.
  • Increases the maximum amount of qualifying expenses that can be credited from $3,000 to $8,000 for single filers and from $6,000 to $16,000 for married couples filing jointly.
  • Allows married couples filing separate returns to claim the credit as if they had filed a joint return, subject to an aggregate limit.
  • Makes the credit refundable for taxpayers with a principal place of abode in the United States for more than half the taxable year.
  • Requires the dollar amounts in the credit to be adjusted annually for inflation after 2025.

AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.

Sponsor (1)
27 cosponsors

Money behind the sponsor

Top reported contributors to Danny K. Davis’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.

  • Employer not reported $40,471
  • OWNER $9,700
  • PRIVATE PRACTICE $4,500
  • GLOBAL STRATEGIC ALLIANCE $4,400
  • ALTERNATIVE SCHOOLS NETWORK $4,000

Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for Danny K. Davis → · Outside spending →

Actions (2)
  1. Apr 24, 2025 Referred to the House Committee on Ways and Means. · house
  2. Apr 24, 2025 Introduced in House

Similar bills (6)

Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.

  • S 1421 — Child and Dependent Care Tax Credit Enhancement Act of 2025 · Introduced Apr 10, 2025 · Cong. 119 94%
  • HR 1425 — To amend the Internal Revenue Code of 1986 to increase the amount of the child tax credit, to make such credit fully refundable, to remove income limitations from such credit, and for other purposes. · Introduced Feb 18, 2025 · Cong. 119 83%
  • HR 1296 — Expanding Child Care Access Act of 2025 · Introduced Feb 13, 2025 · Cong. 119 82%
  • HR 2763 — American Family Act · Introduced Apr 9, 2025 · Cong. 119 81%
  • HR 2036 — Credit for Caring Act of 2025 · Introduced Mar 11, 2025 · Cong. 119 79%
  • HR 2927 — All-Americans Tax Relief Act of 2025 · Introduced Apr 17, 2025 · Cong. 119 79%

Text versions (1)
  • Introduced in House · Apr 24, 2025

Only one text version is on file, so there’s no earlier version to compare against yet.

Full text

IN THE HOUSE OF REPRESENTATIVES

April 24, 2025

Mr. Davis of Illinois (for himself, Ms. DelBene, Ms. Sanchez, Mr. Beyer, Ms. Moore of Wisconsin, Ms. Chu, Ms. Sewell, Mr. Boyle of Pennsylvania, Ms. McCollum, Ms. Brownley, Mr. Larson of Connecticut, Ms. Wilson of Florida, Ms. Norton, Mr. Cleaver, Mr. Carson, Mr. Khanna, Mr. Connolly, and Mr. Panetta) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to enhance the Child and Dependent Care Tax Credit and make the credit fully refundable for certain taxpayers.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Child and Dependent Care Tax Credit Enhancement Act of 2025”.

SEC. 2. ENHANCEMENT OF CHILD AND DEPENDENT CARE TAX CREDIT.

(a) In General.—Paragraph (2) of section 21(a) of the Internal Revenue Code of 1986 is amended to read as follows:

“(2) Applicable percentage.—

“(A) In general.—For purposes of paragraph (1), the term ‘applicable percentage’ means 50 percent reduced (but not below the phaseout percentage) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $125,000.

“(B) Phaseout percentage.—For purposes of subparagraph (A), the term ‘phaseout percentage’ means 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $400,000.”.

(b) Increase in Dollar Limit on Amount Creditable.—Subsection (c) of section 21 of the Internal Revenue Code of 1986 is amended—

(1) in paragraph (1), by striking “$3,000” and inserting “$8,000”; and

(2) in paragraph (2), by striking “$6,000” and inserting “$16,000”.

(c) Special Rule for Married Couples Filing Separate Returns.— Paragraph (2) of section 21(e) of the Internal Revenue Code of 1986 is amended to read as follows:

“(2) Married couples filing separate returns.—

“(A) In general.—In the case of married individuals who do not file a joint return for the taxable year—

“(i) the applicable percentage under subsection (a)(2) and the number of qualifying individuals and aggregate amount excludable under section 129 for purposes of subsection

(c) shall be determined with respect to each such individual as if the individual had filed a joint return with the individual’s spouse, and

“(ii) the aggregate amount of the credits allowed under this section for such taxable year with respect to both spouses shall not exceed the amount which would have been allowed under this section if the individuals had filed a joint return.

“(B) Regulations.—The Secretary shall prescribe such regulations or other guidance as is necessary to carry out the purposes of this subsection.”.

(d) Adjustment for Inflation.—Section 21 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(i) Inflation Adjustment.—

“(1) In general.—In the case of a calendar year beginning after 2025, the $125,000 amount in paragraph (2) of subsection

(a) and the dollar amounts in subsection (c) shall each be increased by an amount equal to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2024’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(2) Rounding.—If any dollar amount, after being increased under paragraph (1), is not a multiple of $100, such dollar amount shall be rounded to the next lowest multiple of $100.”.

(e) Credit Made Refundable.—Section 21(g) of the Internal Revenue Code of 1986 is amended to read as follows:

“(g) Credit Made Refundable for Certain Individuals.—If the taxpayer (in the case of a joint return, either spouse) has a principal place of abode in the United States (determined as provided in section

32) for more than one-half of the taxable year, the credit allowed under subsection (a) shall be treated as a credit allowed under subpart C (and not allowed under this subpart).”.

(f) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2024. <all>

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