The Child Care for American Families Act increases tax credits that employers can claim when they provide child care benefits to their workers. Currently, employers can claim a credit of 25 percent of qualifying child care expenses, but this bill raises that to 40 percent for most employers, 50 percent for small businesses with 500 or fewer employees, and 60 percent for businesses operating in low-income or rural areas. The bill also increases the overall credit cap from its current level to $1.2 million per year and allows employers to count up to $2 million in child care expenses annually. The changes take effect for tax years beginning after the bill is enacted, and the Treasury Department must launch an awareness campaign within one year to inform employers about the expanded credit and how to claim it.
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