States can provide relief to low-wage families with expenses for child care or the care of other family members. A state tax credit can help ensure that children and other family members receive quality care, while reducing the financial burden for low-wage families.
What Can Policymakers Do?
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Expand outreach to eligible families.
To ensure that all eligible families claim this credit, and bring federal revenues in-state, policymakers can employ low-cost outreach measures in concert with those used for the Earned income Tax Credit, individually or through state partnerships. New Jersey partners with the utility company to distribute tax credit information through utility bills, in both English and Spanish. [i] A CADC outreach toolkit is available.
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Establish State Child and Dependent Care Credit. State policymakers can help reduce tax burden and offset the costs of child care for poor working families by establishing a state dependent care credit. The value of these polices range from a $285 deduction in Maryland to the $2,300 tax credit available in New York. As with other tax credits, the impact is greater when states make them refundable. [ ii]
| States with a CADC Tax Credit |
States with a Refundable Credit |
Delaware District of Columbia Georgia Idaho Kansas Kentucky Maryland Massachusetts Montana North Carolina Ohio Oklahoma Rhode Island South Carolina Virginia
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Arkansas California Colorado Hawaii Iowa Louisana Maine Minnesota Nebraska New Mexico New York Oregon Vermont
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From the National Women's Law Center
[ii]