WASHINGTON, D.C. – U.S. Senator Katie Britt (R-AL) led a bipartisan group of lawmakers in advancing historic updates to federal child care tax credits, included in the Senate’s recently passed reconciliation bill. The measure, which passed by a narrow 51-50 vote, marks the first major revision to key child care tax credits in over two decades.
The legislation modernizes and expands the Child and Dependent Care Tax Credit (CDCTC), Dependent Care Assistance Program (DCAP), and the Employer-Provided Child Care Tax Credit (45F). While CDCTC and 45F had not been permanently updated since 2001, DCAP had not been revised since 1986. Advocates say these changes are long overdue as the cost of child care has risen by 263% over that time period.
Senator Britt stated the updated credits are aimed at making child care more affordable for families and improving workforce participation. “This is about more than just addressing our child care crisis—it is a direct investment in hardworking families and local small businesses striving to achieve their American Dream,” Britt said.
The changes draw heavily from the Child Care Availability and Affordability Act, a bipartisan proposal originally introduced by Senator Britt and Senator Tim Kaine (D-VA). The bill gained wide support in the Senate, drawing cosponsors from both parties, including Senators Joni Ernst (R-IA), Jeanne Shaheen (D-NH), Susan Collins (R-ME), Amy Klobuchar (D-MN), and others.
Business leaders and advocacy groups welcomed the measure. The First Five Years Fund and U.S. Chamber of Commerce, alongside 64 other organizations, had called on the Senate Finance Committee to prioritize updates to child care tax credits. Sarah Rittling, Executive Director of the First Five Years Fund, noted the bill as a step forward in addressing affordability issues for working families.
In Alabama, Manufacture Alabama CEO Jon Barganier highlighted the measure’s alignment with state-level efforts, noting the impact access to child care has on workforce participation and economic growth.
Polling conducted with the First Five Years Fund indicated broad public support for the tax credit expansions, with 86% of voters in favor of increasing the CDCTC and 79% of Republicans supporting expanded federal help for child care costs.
The updates come amid what many describe as a deepening national child care crisis. Families across the U.S. face rising costs and limited availability, with over half reportedly living in child care deserts. Meanwhile, providers struggle to retain staff due to low wages and tight margins. Analysts estimate the child care shortage costs the U.S. economy approximately $122 billion annually in lost productivity and wages.
Senator Britt’s focus on supporting families extends beyond this initiative. She has championed several bipartisan measures aimed at maternal and child health, including the Rural Obstetrics Readiness Act, More Opportunities for Moms to Succeed (MOMS) Act, and the NIH IMPROVE Act. She has also introduced legislation addressing youth mental health and the role of social media.
The reconciliation bill’s passage marks a significant bipartisan win for family-focused policy, with lawmakers on both sides expressing optimism about its long-term benefits for American families and the economy.
