H.R.1827 - Child Care Availability and Affordability Act (119th Congress)
Summary
H.R.1827, the Child Care Availability and Affordability Act, proposes amendments to the Internal Revenue Code of 1986 to expand employer-provided child care credits and dependent care assistance exclusions. The bill aims to increase the amount of qualified child care expenditures that can be taken into account and raise the maximum credit amount for employers. It also includes provisions for jointly owned or operated childcare facilities and special rules for small businesses.
Additionally, the bill seeks to increase the amount excludable for dependent care assistance programs and make the household and dependent care credit refundable. This involves creating a new section in the Internal Revenue Code to allow a credit against tax for employment-related expenses, with specific definitions and limitations.
In short, the bill intends to alleviate the financial burden of child care for families and incentivize employer-provided child care benefits through tax code adjustments.
Expected Effects
The likely effect of this bill is to reduce the financial strain on families related to childcare expenses. It also incentivizes employers, especially small businesses, to offer or expand childcare benefits to their employees.
This could lead to increased workforce participation, particularly among parents, and improved economic stability for families with young children. The refundable credit may provide direct financial relief to lower-income families who struggle with childcare costs.
Potential Benefits
- Increased affordability of child care for families through expanded tax credits and exclusions.
- Incentivizes employers to provide child care benefits, potentially increasing access to quality care.
- Provides targeted support for small businesses to offer child care, fostering local economic growth.
- Refundable credits offer direct financial assistance to low-income families, reducing poverty.
- Could lead to increased workforce participation, particularly among parents.
Potential Disadvantages
- Increased government spending and potential budget deficits due to expanded tax credits.
- Complexity in the tax code, potentially leading to confusion and compliance issues.
- Potential for fraud or abuse in claiming the credits and exclusions.
- The benefits may disproportionately favor higher-income families who can afford to utilize dependent care programs.
- May not address the underlying issues of child care shortages and quality concerns.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble). It seeks to 'promote the general Welfare' by supporting families and children through tax policy.
The expansion of tax credits falls under the purview of Congress's power to lay and collect taxes (Article I, Section 8, Clause 1) and to make all laws which shall be necessary and proper for carrying into execution the foregoing powers (Article I, Section 8, Clause 18).
However, the specific design and implementation of the tax credits and exclusions must be carefully considered to ensure they do not violate any other constitutional principles, such as equal protection under the law.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).