The PACE Act would modernize the Child and Dependent Care Tax Credit... to make the credit refundable and allow for annual updates... Child and Dependent Care Tax Credit (CDCTC): Makes the credit refundable... Enhances the value of the credit... Indexes the credit to inflation...
Make the Child and Dependent Care Tax Credit refundable, increase its value, and index it to inflation.
Occurrences
Evidence
IRS Publication 503 says the child and dependent care credit can be up to 35% of employment-related expenses, with a $3,000 annual expense limit for one qualifying person or $6,000 for two or more. The percentage phases down as adjusted gross income rises.
Assessments
This promise was only partially delivered. Schneider voted for House passage of the American Rescue Plan Act on February 27, 2021, which temporarily made the Child and Dependent Care Tax Credit refundable for tax year 2021 and increased its value. But those refundable and larger-credit rules were explicitly limited to taxable years beginning after December 31, 2020 and before January 1, 2022. Current law still does not make the credit refundable, and the statute does not index the core credit amounts to inflation. IRS guidance for current returns still reflects the ordinary capped structure, and the current statute retains fixed dollar limits rather than an inflation adjustment. Because Schneider helped advance a temporary version of part of the promise during his term, but the full promised outcome was not enacted and does not exist in current law, the best judgment is partial rather than delivered.