Republicans want to expand the child and dependent care tax credit
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As President Donald Trump embraces more policies focused on affordability, some lawmakers have pushed for an expansion of tax credits for families.
Republican Study Committee this week published a framework for a second budget bill known as “Reconciliation 2.0,” which sets priorities such as homeownership, health care, energy prices and financial support for families. Another compromise bill has support From House Speaker Mike Johnson and House Budget Committee Chairman Jodey ArringtonR-Texas. et al.
A proposal from the framework would expand access to: child and dependent care tax creditor CDCTC partially covers the cost of care for up to $6,000 for two or more “qualifying individuals” – usually children under 13 — When both tax-filing parents work jointly.
CDCTC is often confused with the child tax credit, or CTC, of up to $2,200 per child under age 17.2025 tax year. One key difference is that the CTC does not require both parents to file taxes jointly to earn income.
The proposal comes during a midterm election year when Republicans are struggling to defend a razor-thin majority in the House of Representatives. As many Americans struggle with the costs of housing, food, utilities and health care, both parties are pushing messages about affordability.
Here are some key things you need to know about the child and dependent care tax credit and how it could change under the Republican Study Committee.
Who benefits from CDCTC?
Only a small percentage of families qualify for the child and dependent care tax credit each year.
Roughly 6.5 million returns He filed a form to claim the child and dependent care tax credit for the 2022 tax year, according to the latest IRS estimates. By comparison, about 37 million returnees took advantage of the child tax credit or loan for other dependents.
Currently about 13 percent of families with children You get the child and dependent care tax credit, according to a 2025 Tax Policy Center analysis. This is compared to almost 90 percent of families with children Who gets the child tax credit?
While Trump’s “big beautiful bill” would expand both tax credits, “there’s still a lot of interest in future reforms,” according to Garrett Watson, director of policy analysis at the Tax Foundation, a nonprofit think tank.
How might CDCTC change?
The Republican framework aims to expand eligibility for the child and dependent care tax credit by eliminating the work requirement for both parents who file taxes jointly.
According to the draft, if it becomes law, the “marriage penalty” implemented to support stay-at-home parents and young families will end. But experts say it is unclear whether Reconciliation 2.0 will happen in 2026 due to competing legislative priorities.
“This is not a marriage penalty as such,” said Margot Crandall-Hollick, principal research fellow at the Urban-Brookings Tax Policy Center. “It is the elimination of the obligation for middle and high income married couples to work.”
Currently, the child and dependent care tax credit is non-refundable; This means that relief is limited to the return’s total tax amount owed. Crandall-Hollick said nonrecourse loans are generally less beneficial for low-income families because they typically owe little or no income tax.
while there is bipartisan interest That change to make the credit refundable was not included in the final version of Trump’s “big beautiful bill,” he said.
