Republican Alabama Senator Katie Britt is urging Republicans to strengthen child care benefits in the party’s tax legislation, which is expected later this year.
Democratic Virginia Senator Tim Kaine has cosponsored Britt’s proposal. Britt and Kaine’s childcare proposal addresses the critical issue in two sections: the Child Care Availability and Affordability Act and the Child Care Workforce Act.
The CDCTC tax credit would allow lower-income families to benefit for the first time, reducing their out-of-pocket childcare costs. Under the reformed CDCTC, families with one child would receive a $2,500 tax credit, while those with two or more children would receive $4,000.
The second component of the Availability and Affordability Act is the DCAP. This program will be expanded to allow families to deduct 50% more of their expenses, with a $7,500 cap.
The DCAP and the CDCTC are currently combined, but this proposal would separate them, allowing middle-class families who are not eligible for the CDCTC to access the tax credit.
The Act’s final provision is the Employer-Provided Child Care Tax Credit, which “radically strengthens” the existing tax credit by incentivizing businesses to provide childcare for their employees.
The business tax credit would increase from $150,000 to $500,000, covering 50% of expenses instead of 25%. If a business is small enough, or if several small businesses collaborate to submit joint applications and pool resources, the credit can be increased to $600,000.
Making child care affordable is critical for Alabama families. I’m introducing legislation to modernize tax credits unchanged since 2001—when gas was a dollar & change! This pro-family, pro-Main Street solution helps parents stay in the workforce while strengthening our economy. pic.twitter.com/AHImMPHhfW
— Senator Katie Boyd Britt (@SenKatieBritt) March 4, 2025
The second component of the proposal, the Child Care Workforce Act, is new. The pilot program would create a competitive grant system to encourage state and local governments, Indian tribes, and tribal organizations to participate in pay supplement programs for childcare workers.
The program aims to increase the supply of care providers while decreasing turnover. This program has been tested in D.C., Maine, Nebraska, and Virginia, and it has proven to be effective in terms of worker retention, well-being, and job satisfaction.
The grants would be available to both home-based and center-based childcare providers, as long as they are state-licensed, and evaluations of care quality, availability, impact, and turnover are required to participate in the program.
“The Republicans ran and won as the party of families and hardworking Americans. I believe that a parent should have the option of staying at home or returning to work. “The unfortunate reality is that rising childcare costs have prevented far too many Americans from starting and growing their families,” Britt told the Daily Caller News Foundation. “My bill, the Child Care Availability and Affordability Act, updates tax benefits that have not been changed since 1986 and 2001.
Importantly, it is significantly less expensive than other family policy proposals. Assisting working parents with childcare costs should be just one of the benefits families will receive in the upcoming tax bill. I am excited to work with my colleagues to deliver a pro-family, pro-growth agenda.”
The tax credits would be part of the Republican tax package, which is expected to be finalized later this year. As Democrats continue to accuse Republicans of giving tax breaks to the wealthy, some Republicans have shifted their focus to provisions for working families.
Republican Senators Joni Ernst of Iowa, Susan Collins of Maine, John Curtis of Utah, and Shelley Moore Capito of West Virginia currently support Britt’s and Kaine’s proposal.
“After four years of price hikes, I am focused on delivering relief to Iowans,” Ernst told the Daily Caller News Foundation. “Finding affordable, high-quality childcare is one of the most pressing issues facing hardworking families across the state. Lowering childcare costs not only benefits families, but also removes one of the most significant barriers for small businesses seeking to hire and retain qualified employees.”
“The childcare crisis is causing problems for our families and the economy. I hear from Virginia parents all the time about how difficult it is to find affordable child care, from child care providers who are forced to leave their jobs due to low pay, and from businesses that are struggling to find the employees they require,” Kaine said following the proposal’s announcement. “I’m proud to join my colleagues in introducing this bipartisan legislation, and I hope more of my colleagues will join us in passing this comprehensive proposal to support childcare providers, make it easier for families to access the care they need, and boost economic growth by providing parents with the opportunity to get back into the workforce.”
“If the Republican Party wants to make good on being the party of families and being the party of workers, I could think of no better way than helping drive down the cost of child care,” Britt told Semafor. He added that the proposal “is a very targeted approach.”
“Childcare issues cost the economy $122 billion each year. When considering the cost over a decade, the cost-benefit analysis is straightforward.