To amend the Internal Revenue Code of 1986 to establish the childcare provider startup credit, to increase the amount of and make refundable the expenses for household and dependent care credit, and for other purposes.
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
What This Bill Does
The bill amends the Internal Revenue Code to create a new childcare provider startup credit (Section 45BB) allowing qualified taxpayers to claim a 30% tax credit on startup expenses up to $10,000 total for establishing childcare, establishes new IRC Section 45BB which provides a 30% tax credit for qualified childcare startup expenses, capped at $10,000 lifetime, for providers who serve at least 2 children and comply with state/local licensing, and amends the Internal Revenue Code to create new Section 36C which replaces and significantly expands the dependent care tax credit, making it refundable with expense limits of $7,500 for one child and $15,000 for two. It relies on tax credits. The main policy areas are Taxation and Social Welfare.
Who Benefits and How
Working parents with young children could see lower costs, Working parents with children under 13 could see lower costs, and New childcare providers and operators could see lower costs.
Who Bears the Burden and How
Federal government could lose revenue opportunities.
Key Provisions
- Amends the Internal Revenue Code to create a new childcare provider startup credit (Section 45BB) allowing qualified taxpayers to claim a 30% tax credit on startup expenses up to $10,000 total for establishing childcare...
- Establishes new IRC Section 45BB which provides a 30% tax credit for qualified childcare startup expenses, capped at $10,000 lifetime, for providers who serve at least 2 children and comply with state/local licensing...
- Amends the Internal Revenue Code to create new Section 36C which replaces and significantly expands the dependent care tax credit, making it refundable with expense limits of $7,500 for one child and $15,000 for two...
- Establishes new IRC Section 36C providing a refundable tax credit of 50% (reduced to 35% for higher incomes) of employment-related childcare expenses up to $7,500 for one qualifying individual or $15,000 for two...
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
The bill amends the Internal Revenue Code to create a new childcare provider startup credit (Section 45BB) allowing qualified taxpayers to claim a 30% tax credit on startup expenses up to $10,000 total for establishing childcare, establishes new IRC Section 45BB which provides a 30% tax credit for qualified childcare startup expenses, capped at $10,000 lifetime, for providers who serve at least 2 children and comply with state/local licensing, and amends the Internal Revenue Code to create new Section 36C which replaces and significantly expands the dependent care tax credit, making it refundable with expense limits of $7,500 for one child and $15,000 for two.
Key Policy Areas
Taxation, Social Welfare
Primary Purpose
The bill amends the Internal Revenue Code to create a new childcare provider startup credit (Section 45BB) allowing qualified taxpayers to claim a 30% tax credit on startup expenses up to $10,000 total for establishing childcare, establishes new IRC Section 45BB which provides a 30% tax credit for qualified childcare startup expenses, capped at $10,000 lifetime, for providers who serve at least 2 children and comply with state/local licensing, and amends the Internal Revenue Code to create new Section 36C which replaces and significantly expands the dependent care tax credit, making it refundable with expense limits of $7,500 for one child and $15,000 for two.
Policy Domains
Section 1 - Short Title
Identified Gains
- Working parents with young children
- Working parents with children under 13
- New childcare providers and operators
- Lower-income working families
- Licensed childcare providers starting new services
Identified Costs
- Federal government
Legislative Progress
IntroducedMr. Gottheimer introduced the following bill; which was referred to …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Childcare service providers, Home-based childcare operators, Individuals starting home daycare businesses
Families caring for disabled dependents or spouses, Families seeking childcare, Families with disabled dependents
Household service providers
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
Key Definitions
Terms defined in this bill
A taxpayer that provides childcare services in compliance with applicable State or local requirements and provided such services to 2 or more children for a significant portion of the taxable year.
A start-up expenditure (as defined in section 195(c)(1)) paid or incurred during the 2-year period ending on the last day of the taxable year to establish and operate a childcare service.
A dependent under age 13, a dependent physically or mentally incapable of self-care sharing the taxpayer's principal abode, or a spouse physically or mentally incapable of self-care sharing the taxpayer's principal abode.
Amounts paid for household services and care of a qualifying individual, if incurred to enable the taxpayer to be gainfully employed.
Any facility which provides care for more than six individuals (other than residents) and receives a fee, payment, or grant for providing services.
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