Enhances the Child and Dependent Care Tax Credit by increasing limits and making it fully refundable for certain taxpayers.
The Child and Dependent Care Tax Credit Enhancement Act of 2025 amends the Internal Revenue Code to boost the Child and Dependent Care Tax Credit. It raises the income threshold for the credit's phaseout from $125,000 to $400,000 and adjusts the credit amount based on income. The bill increases the dollar limit on the amount creditable from $3,000 to $8,000 for one dependent and from $6,000 to $16,000 for two or more dependents. It also makes the credit fully refundable for taxpayers with a principal place of abode in the U.S. for more than half the year.
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