Sen. Kirsten Gillibrand, a New York Democrat, is proposing to more than double the Dependent and Child Care Tax Credit, allow middle-class families to deduct the cost of child care as a business expense on their taxes and make improvements to the Child Care and Development Block Grant Act. She said the legislation would make child care more affordable and accessible for working parents.
A 2012 report by Child Care Aware ranked New York the second least-affordable state in the nation for full-time day care for an infant. A two-parent family in New York spent 16.5 percent of their annual income on average for infant care. A single mother in New York paid more than 57 percent of her income for child care.
Families with young children on average spend about $6,700 a year on child care, nearly as much as what the average family spends on groceries, according to Gillibrand. In the Hudson Valley, there are more than 120,000 families with children under 6. For a year of child care in a day care center, families spend up to $14,605 for an infant, up to $13,617 for a toddler between 1.5-2 years, up to $12,517 for a toddler 3-5 years and up to $12,198 for a child age 6-12, according to estimates.
Gillibrand said the proposals are part of her American Opportunity Agenda to ensure more working women have a fair shot at earning financial security by modernizing America’s outdated workplace policies.
“If you can’t afford child care, as many middle class families can’t, and you don’t have a family option, the choice you’re left with is to leave your job and stay at home to care for your children,” Gillibrand said in a statement. “That means less income for working families, more women leaving the workforce, and a weaker middle class.
These are the specifics on her proposals:
—More than double the Dependent and Child Care Tax Credit: Under current law, the child and dependent care tax credit is worth a maximum of 35 percent of expenses, up to $1,050 per child or $2,100 for two children. It applies to any child under 13 and to disabled dependents of any age. The legislation would increase the maximum credit to $3,000 per child by raising the percentage of the tax credit to 50 percent and doubling eligible expenses. It would be fully refundable, which would allow low-income families with no tax liability to receive the full benefit. It would increase the tax deduction for businesses that provide child care services for employees.
—Create a new child care tax deduction: Allow middle class families to deduct the cost of child care from their taxes as a business expense. Families could deduct as much as $14,000 a year for child care expenses ($7,000 for one child). Under current law, a family with two children earning $100,000 a year could receive a maximum credit of $1,200. A family spending $14,000 a year on child care expenses could deduct the full amount under Gillibrand’s proposal, reducing their taxable income by $3,500.
—Require states to devote more of their Child Care and Development Block Grant funding to quality initiatives, including training, professional development and professional advancement of the workforce. They would have to meet certain health and safety requirements related to prevention and control of infectious diseases, first aid, child abuse prevention, building safety, emergency response planning and other areas. States would have to focus on infant and toddler quality initiatives and how best to meet the needs of children with disabilities. Child care providers in the program would have to undergo mandatory background checks.
(Journal News file photo of Kirsten Gillibrand.)