H.R. 8023 creates a new federal tax credit to encourage employers to increase wages for child care workers. Employers who raise hourly wages for their child care staff year-over-year can claim a credit equal to 5 percent of the wage increase, or 7 percent if the child care facility is located in a rural area. The credit applies to child care facilities that serve at least six children, receive payment for their services, and comply with state and local regulations. The bill takes effect for tax years beginning after it becomes law, with no specific funding amount or sunset date specified in the legislation. This credit is part of the general business tax credit system and allows employers the option to not participate if they choose.
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