Government & Politics

Congressman Yoder pushes for bill to expand child care tax benefits

U.S. Rep. Kevin Yoder said legislation he is sponsoring would make the child and dependent-care tax credit refundable as American families face the “increasingly expensive cost of child care.”
U.S. Rep. Kevin Yoder said legislation he is sponsoring would make the child and dependent-care tax credit refundable as American families face the “increasingly expensive cost of child care.”

U.S. Rep. Kevin Yoder is advocating for a new bill he says will help families pay for child care.

The Promoting Affordable Childcare for Everyone Act would increase the child and dependent-care tax credit, and make it refundable for low-income families. The bill also would increase the amount of pre-tax money that could be put into dependent-care flexible spending accounts, according to Yoder’s office.

The Overland Park Republican, who represents Kansas’ 3rd District in the U.S. House, said in an interview with The Star that the legislation comes as American families face the “increasingly expensive cost of child care.”

“In our own community we have thousands of struggling families trying to make ends meet and this is the type of relief that can really make a difference in their lives,” Yoder said.

According to estimates released by Yoder’s staff, the bill would help a family of four making less than $15,000 a year become eligible for a maximum annual child and dependent-care tax credit refund of $3,000.

But Elaine Maag, a senior research associate at the Tax Policy Center, questioned how much the changes would help low-income families, adding that “most low-income families tend to pay less for child care than high-income families.”

After reviewing the estimate released by Yoder’s staff on how the bill would affect the lower income family of four, Maag said, “Most families won’t have child care costs that even approach that when they’re very low income.”

“Today, with a non-refundable credit, about 6 percent of the total benefits go to low-income families,” Maag said. “And if you make the credit refundable that number jumps, but it’s still only about 15 percent of total benefits. Most benefits will still go to higher-income families.”

Yoder said he thought the bill is “broad enough” and “will help all families.”

“(It’s) fair to everyone from low-income to middle class,” Yoder said.

For a family of four making $55,000 a year, the maximum annual child and dependent-care tax credit would be $2,100, according to the analysis from Yoder’s staff.

“Part of this is allowing a single mother or a family at the poverty line to be able to, everybody, to go back to work and begin earning dollars because they can now afford child care,” Yoder said of the bill.

Rep. Stephanie Murphy, a Florida Democrat, is also sponsoring the legislation. The House legislation is the same as a Senate bill, also called the PACE Act, that was introduced earlier this year.

Amy Matsui, who works on child care tax issues at the National Women’s Law Center, said the bill “is a really important step forward.”

“The high cost of child care is making families crazy,” Matsui said. “It’s making it hard to work.”

Scott Greenberg, a senior analyst with the Tax Foundation, said part of the current tax reform effort is geared toward eliminating credits, deductions and exclusions.

“It’s interesting that this bill seems to be going in the opposite direction of that, trying to expand one credit and one exclusion in the tax code when many other lawmakers are working on eliminating these,” he said.

Yoder said that as lawmakers pursue a simpler tax code, he doesn’t want working families to be left behind.

“This is tax relief squarely where we need it the most,” Yoder said.

Hunter Woodall: 785-354-1388, @HunterMw

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