U.S. Sen. Martin Heinrich joined legislation led by U.S. Sens. Bob Casey (D-Penn.), Ron Wyden (D-Ore.), chair of the Senate Finance Committee, and Patty Murray (D-Wash.), chair of the Senate Appropriations Committee, to ease the burden of child care costs on working families by making permanent tax cuts that they successfully fought for in the American Rescue Plan.
The temporary expansion of a child care tax credit, the Child and Dependent Care Tax Credit, quadrupled the average family’s credit from $593 to $2,158. Those reforms also made low-income families eligible for the credit for the first time by making it refundable. The Child and Dependent Care Tax Credit Enhancement Act would make that expansion permanent.
“We need to level the playing field for our kids — especially in their earliest years — with smart investments that set them up with a strong foundation for long-term academic and career success,” Heinrich said. “The temporary expanded Child Tax Credit that we passed in the American Rescue Plan made a substantial difference in helping parents and families afford the costs of raising a child and giving all of our kids the opportunity to succeed.
“I’m proud that New Mexico has set a national example by expanding our state level Child Tax Credit and Working Families Tax Credit. If we want to provide all of our kids with opportunities to succeed, we absolutely need to make our expanded federal investment in the success of our children and their families permanent.”
The Child and Dependent Care Tax Credit Enhancement Act would increase the maximum credit amount to $4,000 per child; automatically adjust it to keep pace with inflation; save money by phasing-out the credit for families making more than $400,000; and ensure low-income families can benefit from the tax credit by making it refundable, allowing families to receive up to $8,000 each.