H.R.1067 - Lowering Infant and Toddler Tuition for Learning and Education Act of 2025; LITTLE Act of 2025 (119th Congress)
Summary
H.R.1067, also known as the LITTLE Act of 2025, aims to reduce childcare costs by amending the Internal Revenue Code. The bill introduces a childcare provider startup credit and increases the amount and refundability of the expenses for household and dependent care credit. These measures are intended to support both childcare providers and families with young children.
Expected Effects
The bill's passage would likely lead to an increase in the number of childcare providers due to the startup credit. Additionally, families could see a reduction in their childcare expenses through the enhanced dependent care credit. This could free up income for other household needs and potentially encourage greater workforce participation.
Potential Benefits
- Reduced Childcare Costs: Increased dependent care credit directly lowers the financial burden on families.
- More Childcare Options: The startup credit incentivizes the creation of new childcare facilities.
- Increased Workforce Participation: Affordable childcare enables more parents to enter or remain in the workforce.
- Support for Childcare Providers: The startup credit provides financial assistance to new childcare businesses.
- Economic Stimulus: Increased spending due to reduced childcare costs can stimulate local economies.
Potential Disadvantages
- Potential for Increased Tax Burden: The credits may necessitate adjustments in other areas of the budget or increased taxes.
- Complexity of Tax Code: Adding new credits can further complicate the tax filing process for individuals and businesses.
- Risk of Fraud: The refundable nature of the credit could create opportunities for fraudulent claims.
- Limited Impact: The $10,000 limit on the startup credit might not be sufficient to significantly impact childcare availability in all areas.
- Inflationary Pressure: Increased demand for childcare services without a corresponding increase in supply could drive up prices.
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble). Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The establishment of tax credits and amendments to the tax code fall under this enumerated power.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).