H.R.413 - Combating High Inflation Limiting Daycare Act of 2025; CHILD Act of 2025 (119th Congress)
Summary
H.R. 413, also known as the Combating High Inflation Limiting Daycare Act of 2025 or the CHILD Act of 2025, proposes amendments to the Internal Revenue Code of 1986. The bill aims to adjust dependent care assistance programs to account for inflation. Specifically, it seeks to increase the maximum contribution to these programs and index them to the cost of living.
Expected Effects
The primary effect of this bill would be to increase the amount of pre-tax dollars that families can set aside for dependent care expenses. Indexing these amounts to inflation would help to preserve the real value of the benefit over time. This could make childcare more affordable for working families.
Potential Benefits
- Increased financial assistance for families with dependent care needs.
- Adjustment for inflation protects the value of the benefit over time.
- Simplification of the tax code by removing outdated provisions.
- May encourage greater workforce participation among parents.
- Could reduce financial stress on families, improving overall well-being.
Most Benefited Areas:
Potential Disadvantages
- Potential for increased complexity in tax calculations due to inflation adjustments.
- The benefits disproportionately favor higher-income individuals who can afford to contribute more to dependent care accounts.
- May increase the administrative burden on employers offering these programs.
- Could lead to a decrease in federal tax revenue.
- The rounding to the nearest $50 may not fully account for precise inflation adjustments.
Constitutional Alignment
This bill appears to align with the Constitution's general welfare clause (Preamble). Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8). The bill uses the tax code to incentivize and support dependent care, which can be argued as promoting the general welfare by supporting working families.
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).