If you’re a working parent (or if you know one) then you already know—summer is one big juggling act.
Yes, there can be joy in the mix with sunshine, sprinklers, and popsicles. But there are also child care gaps, tricky logistics, and the ever-mounting costs of it all. And in the middle of all that juggling, it can be really tough to also keep up with what’s happening in Congress. You might hear something about a “One Big Beautiful Bill” on the news or overhear some political back-and-forth, but what does any of that actually mean for you and your juggling routine? Let’s break it down.
First, we know families need options and they need a little relief. Parents don’t just want support—they need it. And with two in three small children living in families where the parents are working, child care is a must. The 2025 tax reconciliation law will help by permanently improving three tax policies that help working parents afford child care and engages employers eager to help: the Child and Dependent Care Tax Credit (CDCTC), the Employer-Provided Child Care Credit (45F), and Dependent Care Assistance Plans (DCAPs).
These child care-related tax breaks work together to ease the burden on parents and help employers attract and retain talent. Initially designed to help parents offset the cost of care, they have remained largely untouched for decades, even as costs soared and family needs shifted. The improvements in the recent bill represent billions in federal investment in child care and represent one of the most significant permanent investments in care since the pandemic.
Second, these credits have a long track record of support from both Republicans and Democrats on Capitol Hill. Members of Congress have been working on legislation to improve these tax credits for years, building support for a half-dozen bipartisan bills introduced since 2023. The new law includes many of the provisions outlined in these bills, including those in the Child Care Availability and Affordability Act, a bipartisan bill spearheaded by Sen. Katie Britt (R-Alabama) and Sen. Tim Kaine (D-Virginia) which had support from 20 senators from both sides of the aisle.
Third, these policies enjoy widespread public support. In a national poll earlier this year, 86 percent of Americans said they supported expanding the CDCTC. That included 83 percent of Republicans and Independents and 91 percent of Democrats. Support for the other two tax provisions was similarly high, with 86 percent of Republicans and 83 percent of Democrats supporting an expanded DCAP; and 81 percent of both Republicans and Democrats supporting an expanded 45F.
Here’s why it matters. The CDCTC is the only federal tax credit aimed specifically at offsetting child care costs. Nearly six million families file for the CDCTC, and, under the new law, an estimated four million of them may receive an increased benefit. The total credit could now range from $1,500 to $3,000 for lower-income families and $600 to $1,200 for higher-income households. For many families, that’s about a $900 increase compared to previous years.
Child care is often a family’s largest expense after housing. For parents balancing diapers, rent, and groceries, an extra thousand dollars at tax time will make a real difference.
The Employer-Provided Child Care Credit (45F) is an incentive for employers to help cover a portion of the cost of child care for their workers. Employers of all sizes have been eager to be a partner in addressing child care challenges, but in recent years, few businesses took advantage of this credit; it was outdated, underfunded, and unworkable for smaller companies. The new and improved 45F makes the credit more generous, removes barriers for small businesses, and simplifies the process that allows companies to collaborate and contract with local child care providers. With talent shortages mounting and child care ranking alongside health care as a top workplace benefit, it’s exciting to see what these changes could mean.
Dependent Care Assistance Plans—employer-sponsored flexible spending accounts for child care—have a cap on how much pre-tax income families can set aside. Congress increased this cap for the first time since 1986, giving parents more tools to plan for and afford care throughout the year.
These provisions are a smart and necessary investment in working families. But families with very low or no taxable income—those living in poverty or living paycheck to paycheck—also urgently need other forms of support. That’s why it’s mission-critical to strengthen direct child care and early learning programs like Head Start and the Child Care and Development Block Grant, which were specifically designed to support low-income families. It’s incumbent upon Congress to ensure they are protecting, prioritizing, and growing investment in these programs.
The bottom line: As a nation, we must support an “all of the above” strategy that gives families a wide range of options to meet their child care needs. This includes strengthening and prioritizing investments in trusted federal programs; enhancing tax provisions that help working families with child care expenses while encouraging employers who want to help provide access to care; bolstering efforts to expand the supply of child care while attracting a well-qualified child care workforce; and ensuring more children have access to quality care and early learning opportunities that will help them succeed.
And we need to make these changes now. Families with young children can’t simply hit pause on their child care needs and hope Congress can deal with it a few years down the road—kids don’t work like that! These updates to the only tax credits specific to child care reflect a growing consensus, among both voters and elected officials, that child care is an imperative.
As Sen. Britt said, the work must continue: “I am not setting down the mantle. I’m going to continue to carry it, but I think the fact that we’ve been able to effect change in this area—where it has not been done and nobody has knocked that wall down yet—I think that this is monumental.”
Let’s continue to build on that momentum. Our families, our children, and our economy, deserve nothing less.
Sarah Rittling is the Executive Director of First Five Years Fund, the national advocacy group working to protect, prioritize, and build bipartisan support for early learning and child care programs at the federal level.
The views expressed in this article are the writer’s own.
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