No CRS summary available for this bill.
This section enhances the Child and Dependent Care Tax Credit (CDCTC) for taxable years beginning after December 31, 2024, by (1) increasing the maximum applicable percentage to 50% (from 35%), reduced by 1 percentage point for each $2,000 (or fraction thereof) of adjusted gross income (AGI) exceeding $125,000 to a floor of the phaseout percentage, which is 20% reduced by 1 percentage point for each $2,000 (or fraction thereof) of AGI exceeding $400,000 (not below zero); (2) raising the maximum expenses eligible for the credit to $8,000 for one qualifying individual and $16,000 for two or more (from $3,000 and $6,000); (3) allowing married individuals filing separately to claim the credit by treating each spouse as filing jointly for applicable percentage and expense limit purposes, with the aggregate credit for both capped at the joint return amount; (4) providing for inflation adjustment of the $125,000 AGI threshold and expense limits for years after 2025, using chained CPI with 2024 as the base year and rounding to the next lowest $100; and (5) making the credit refundable (previously nonrefundable) for taxpayers (or a spouse on joint return) maintaining a principal U.S. abode for more than half the year.