Budget & Taxes (Children)

This bill creates a federal program providing child care assistance to working families with children under age 6 through direct child care certificates that parents can use to pay for high-quality child care services. States must develop plans with payment rates covering provider costs and wages, sliding fee scales based on family income (with no copayment for families earning under 85% of state median income), and policies prioritizing vulnerable children including those with disabilities, experiencing homelessness, or from low-income families. The program requires providers to meet quality standards, prohibit suspensions/expulsions, and implement quality improvement activities while ensuring accessibility for underserved populations. It is funded through significant federal appropriations for fiscal years 2026-2031.

This bill would permanently expand the Child Tax Credit to provide $4,200 per year for each child under age 6 and $3,000 per year for each child ages 6-17. It also creates a new $2,800 credit for pregnant mothers with unborn children at 20 weeks gestation or more, requiring physician certification of gestational age. Both credits phase out for higher-income taxpayers, with the Child Tax Credit phasing out at $400,000 for joint filers and $200,000 for other taxpayers. The bill would affect low and middle-income families with children, particularly those with young children or who are pregnant, with changes applying to taxable years beginning after December 31, 2025.

HR 6634 would establish a refundable tax credit providing $667 per month for each child aged 2-4 who receives early childhood education and lives with the taxpayer. The credit would be reduced for households earning above 300% of the poverty line, with monthly advance payments made directly to eligible families rather than as a yearly tax refund. To qualify, children must be enrolled in an early childhood education program (including licensed private prekindergarten), receive care from the taxpayer, and meet specific residency requirements. The bill includes provisions to prevent fraud, coordinate with other government programs, and adjust payments for inflation starting in 2026, with the credit applying to taxable years beginning after December 31, 2025.