Child care tax breaks can save families and businesses money — but few use them, congressional report finds

Alvaro Gonzalez | Moment | Getty Images A lack of available child care could cost the U.S. economy up to $329 billion over the next 10 years, a 2025 Bipartisan Policy Center report found. One untapped way for families and the businesses that employ them to save on those costs could be through existing tax incentives, according to a new report from the U.S. Congress Joint Economic Committee — Minority. Just 13% of private sector workers have access to child care benefits through their employers, according to the report. Moreover, existing child care tax incentives are underused or difficult for businesses and their employees to navigate, the report states. Tax incentives to reduce the cost of child care Eligible workers may be able to offset their child care expenses by claiming the child and dependent care tax credit , or CDCTC. The CDCTC lets families who meet certain criteria offset a portion of their child care and dependent care expenses against their federal income tax liability. The credit can partially offset up to $3,000 in care expenses for one qualifying individual and up to $6,000 for two or more qualifying individuals. Yet only about 12% of taxpayers with children claim the credit, according to the report. Some workers who are eligible may have difficulty navigating the credit, and therefore don't claim it, the report said, while others may be ineligible due to not having qualifying expenses, owing no federal taxes or earning too much money. …