Expanding Child Care Access Act of 2025

The Expanding Child Care Access Act of 2025 proposes a new, temporary tax credit designed to help individuals launch and maintain licensed childcare businesses within their own homes. To qualify, a provider would need to care for at least two children who are not their own, receive payment for their services, and maintain proper state licensing or registration. Because the credit is refundable, eligible taxpayers could receive the full amount even if it exceeds the total taxes they owe for the year.

Under this proposal, taxpayers could claim up to $5,000 for a variety of startup and operational expenses. These include licensing fees, liability insurance, professional training, and supplies like diapers and toys. The credit would also cover larger investments such as playground equipment, safety fencing, and home renovations required to meet state safety standards. The bill aims to lower the financial barriers for new providers, though the credit could only be claimed once and would expire after seven years.

If enacted, the Internal Revenue Service would be responsible for providing specific guidance on how to report these expenses and claim the credit. This legislation is currently in the initial stages of the legislative process and has been referred to the House Committee on Ways and Means for further consideration.