Republicans want to expand child and dependent care tax credit

As President Donald Trump ramps up policies focused on affordability, some lawmakers are pushing to expand tax credits for families.

The Republican Research Committee this week released its second budget framework, known as “Reconciliation 2.0,” outlining priorities such as homeownership, health care, energy prices and financial support for families. Another reconciliation bill has support from House Speaker Mike Johnson and House Budget Chair Jody Arrington (R-Texas), among others.

One proposal from the framework would expand access to the Child and Dependent Care Tax Credit (CDCTC), which partially offsets up to $6,000 of the cost of caring for two or more “eligible individuals” (usually children under 13) for joint tax-paying parents if both parents are working.

The CDCTC is often confused with the Child Tax Credit (CTC) of up to $2,200 per child under age 17 for the 2025 tax year. One important difference is that the CTC does not require parents to file taxes jointly to generate income.

The proposal was introduced in a midterm election year when Republicans are struggling to protect their House majority. At a time when many Americans are struggling to pay for housing, food, utilities, and health care, both parties are promoting messaging around affordability.

Here are some important things to know about the child and dependent care tax credit and how it could change under the Republican Study Committee framework.

Only a small number of families are able to claim the Child and Dependent Care Tax Credit each year.

Approximately 6.5 million filers have filed forms claiming the Child and Dependent Care Tax Credit for the 2022 tax year, according to the IRS’s latest estimates. By comparison, nearly 37 million returns claimed child tax credits or credits for other dependents.

According to a 2025 Tax Policy Center analysis, approximately 13% of families with children currently receive tax credits for child and dependent care. By comparison, almost 90% of households with children receive the child tax credit.

Trump’s “big, beautiful bill” expanded both tax credits, but “there’s still a lot of interest in further reform,” said Garrett Watson, director of policy analysis at the Tax Foundation, a nonprofit think tank.

The Republican framework aims to expand eligibility for tax credits for child and dependent care by eliminating work requirements for parents who file taxes jointly.

According to the outline, if enacted, the “marriage penalty” to support stay-at-home mothers and young families would be abolished. But experts say it’s unclear whether Reconciliation 2.0 will become a reality in 2026, given competing legislative priorities.

Marriage penalties generally result in a higher tax burden for married couples filing jointly than when filing as single individuals.

“This is not such a marriage penalty,” said Margot Crandall Hollick, a senior researcher at the Urban-Brookings Tax Policy Center. “This is the elimination of work requirements for couples with middle incomes and above.”

Currently, child and dependent care tax credits are non-refundable. That is, the benefit is limited by the amount of unpaid tax on your return. Crandall-Hollick said non-refundable credits generally don’t benefit low-income households because they typically pay little or no income taxes.

She said there was bipartisan interest in making the credit refundable, but that change was not included in the final version of President Trump’s “big, beautiful bill.”