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The text of the bill below is as of Feb 8, 2024 (Introduced).
IN THE SENATE OF THE UNITED STATES
February 8 (legislative day, February 7), 2024
Mrs. Shaheen (for herself, Mr. King , Ms. Klobuchar , and Mrs. Gillibrand ) introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to increase the credit for employers establishing workplace child care facilities, to increase the child care credit to encourage greater use of quality child care services, to provide incentives for students to earn child care-related degrees and to work in child care facilities, and to increase the exclusion for employer-provided dependent care assistance.
This Act may be cited as the Right Start Child Care and Education Act of 2024 .
Increase in employer-provided child care credit
Increase in creditable percentage of child care expenditures
Paragraph (1) of section 45F(a) of the Internal Revenue Code of 1986 is amended by striking 25 percent and inserting 50 percent .
Increase in creditable percentage of resource and referral expenditures
Paragraph (2) of section 45F(a) of the Internal Revenue Code of 1986 is amended by striking 10 percent and inserting 20 percent .
Increase in maximum credit
Subsection (b) of section 45F of the Internal Revenue Code of 1986 is amended by striking $150,000 and inserting $500,000 .
Special rule for small businesses
Section 45F(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
In the case of a taxpayer described in subparagraph (B)—
subsection (a)(1) shall be applied by substituting 60 percent for 50 percent , and
subsection (b) shall be applied by substituting $600,000 for $500,000 .
A taxpayer described in this subparagraph is a taxpayer that meets the gross receipts test of section 448(c), determined—
by substituting 5-taxable-year for 3-taxable-year in paragraph (1) thereof, and
by substituting 5-year for 3-year each place such term appears in paragraph (3)(A) thereof.
Treatment of jointly owned or operated childcare facility
Section 45F(c)(1) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
Jointly owned or operated childcare facility
For purposes of subparagraph (A)(i)(I), a facility shall not fail to be treated as a qualified childcare facility of the taxpayer merely because such facility is jointly owned or operated by the taxpayer and other persons.
The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
3-year credit for individuals holding child care-related degrees who work in licensed child care facilities
Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36B the following new section:
Right start child care and education credit
In the case of an individual who is an eligible child care provider for the taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year the amount of—
$4,000, in the case of an eligible child care provider with a degree described in subsection (c)(1)(A)(i), and
$2,500, in any other case.
The credit allowable by subsection (a) for any taxable year to an individual shall be allowed for such year only if the individual elects the application of this section for such year.
An election to have this section apply may not be made by an individual for any taxable year if such an election by such individual is in effect for any 3 prior taxable years.
Eligible child care provider
For purposes of this section—
The term means, for any taxable year, any individual if—
as of the close of such taxable year, such individual holds—
a bachelor’s degree, or
an associate's degree,
in early childhood education, child care, or a related degree, and such degree was awarded by an eligible educational institution (as defined in section 25A(f)(2)), and (B)
during such taxable year, such individual performs at least 1,200 hours of child care services at a facility if—
the principal use of the facility is to provide child care services,
no more than 25 percent of the children receiving child care services at the facility are children (as defined in section 152(f)) of the individual or such individual’s spouse, and
the facility meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including the licensing of the facility as a child care facility.
Subparagraph (B)(i) shall not apply to a facility which is the principal residence (within the meaning of section 121) of the operator of the facility. (2)
Child care services
The term means child care and early childhood education.
Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting , 36C after 36B .
Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting , 36C after 36B .
The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36B the following new item:
Sec. 36C. Right start child care and education credit.
The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
Increase in exclusion for employer-provided dependent care assistance
Section 129(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking $5,000 ($2,500 and inserting the applicable limitation amount (half such amount .
Section 129(a)(2) of the Internal Revenue Code of 1986 is amended by striking subparagraph (D) and by inserting after subparagraph (C) the following new subparagraph:
Applicable limitation amount
For purposes of this paragraph, the term means the amount that is the sum of—
$2,000 for each individual described in subparagraph (A) or (B) of section 21(b)(1) with respect to the taxpayer.
The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
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