The Affordable Child Care Act doubles the value of three federal tax benefits designed to help families afford child care expenses. First, it increases the child and dependent care tax credit from $3,000 to $6,000 for one dependent and from $6,000 to $12,000 for two or more dependents. Second, it raises the limit on dependent care assistance programs that employers can offer from $5,000 to $10,000 per year. Third, it doubles the employer-provided child care facility credit from $150,000 to $300,000, which encourages businesses to invest in on-site or subsidized child care. All changes take effect for tax years beginning after December 31, 2024, and directly benefit working families with children, as well as employers who provide child care support.
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