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Increased Tax Credits for Child and Dependent Care

This act aims to provide greater financial relief for families incurring child and dependent care expenses. It introduces higher tax credits and increases the tax-exempt amount for employer-provided dependent care assistance, potentially reducing financial burdens for many households.
Key points
Increases the Child and Dependent Care Tax Credit to 50% of expenses, with a minimum floor of 35%.
Makes the Child and Dependent Care Tax Credit fully refundable, meaning low-income individuals can receive the credit even if it exceeds their tax liability.
Raises the tax exclusion for employer-provided dependent care assistance from $5,000 to $7,500 annually.
Introduces annual inflation adjustments for credit amounts and exclusions to maintain their value over time.
These changes apply to taxable years beginning after December 31, 2023.
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Expired
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Additional Information
Print number: 118_HR_7360
Sponsor: Rep. Tenney, Claudia [R-NY-24]
Process start date: 2024-02-14
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Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

PACE Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_HR_7360.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2024-02-14.

What are the main provisions?

Key points include:

  • Increases the Child and Dependent Care Tax Credit to 50% of expenses, with a minimum floor of 35%.
  • Makes the Child and Dependent Care Tax Credit fully refundable, meaning low-income individuals can receive the credit even if it exceeds their tax liability.
  • Raises the tax exclusion for employer-provided dependent care assistance from $5,000 to $7,500 annually.
  • Introduces annual inflation adjustments for credit amounts and exclusions to maintain their value over time.
  • These changes apply to taxable years beginning after December 31, 2023.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Tenney, Claudia [R-NY-24].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-25.

CATEGORIES

Taxes Family