The LITTLE Act of 2025 would create a tax credit for childcare providers and change the tax credit for household and dependent care expenses. Eligible childcare providers could claim a credit equal to 30% of qualifying startup expenses, up to $10,000 total across all tax years. Providers must follow applicable state or local rules and serve at least two children for a significant part of the year. The bill would also replace the current dependent care credit with a refundable credit. It would cover eligible care expenses that allow a taxpayer to work, with expense limits of $7,500 for one qualifying person or $15,000 for two or more. The credit rate would range from 50% to 35%, based on income.
A taxpayer paying eligible care expenses to work could qualify if the care is for a child under 13, a dependent unable to care for themselves, or a spouse unable to care for themselves. Income, earned income, filing status, and other rules would affect eligibility and the credit amount. Childcare providers who meet the bill’s requirements could qualify for the startup credit. The bill would apply its provider credit to expenses paid or incurred after enactment and its care credit changes to tax years beginning after enactment.
The bill describes tax credits for eligible childcare startup costs and household or dependent care expenses. No publicly available information on the bill’s total federal cost.
No publicly available information.
No publicly available information.