Vote Smart's Synopsis:

Vote to pass a bill that increases the child and dependent care tax credit and authorizes payroll tax credits for certain fixed expenses of child care facilities closed due to the COVID-19 coronavirus.

Highlights:

• Authorizes a 50 percent employment credit for qualified fixed expenses of child care facilities subject to closure due to the COVID-19 coronavirus (Division B, Sec. 404).

• Defines “qualified fixed expenses” as the payment or accrual of any covered mortgage obligation, covered rent obligation, or covered utility payment (Division B, Sec. 404).

• Prohibits the qualified fixed expenses by an eligible explorer for any calendar quarter from exceeding $50,000 per facility (Division B, Sec. 404).

• Authorizes an employee retention tax credit for employers of domestic workers (Division B, Sec. 407).

• Authorizes a 30 percent payroll credit for qualified employee dependent care expenses paid by employers (Division, Sec. 405).

• Defines “qualified employee dependent care expenses” as any amount paid to or for the benefit of an employee (Division, Sec. 405).

• Prohibits the qualified employee dependent care expenses from exceeding $2,500 for any calendar quarter (Division B, Sec. 405).

• Requires the Secretary of Health and Human Services (HHS) to conduct an immediate needs assessment of the condition of child care facilities throughout the United States that (Division B, Sec. 418A):

• Determines the extent to which the COVID-19 pandemic has created immediate infrastructure needs which must be addressed for child care facilities to operate in compliance with public health guidelines; 

• Considers the effects of the pandemic on a variety of child care centers, including home-based centers; and

• Considers how the pandemic has impacted specific metrics, such as:

• Capacity;

• Investments in infrastructure changes;

• The types of infrastructure changes centers need to implement and their associated costs; and

• Any changes or anticipated changes in the number and demographic of children attending.

• Authorizes the HHS Secretary to award grants to states for acquiring, renovating, or improving child care facilities, including adapting, reconfiguring, or expanding facilities response to the COVID-19 pandemic (Division B, Sec. 418A).

• Appropriates $10 billion to the Child Care Development Fund for infrastructure grants for the construction, alteration, or renovation of non-federally owned facilities to improve child care safety (Division A, Title II).

• Appropriates $10 billion for the child care stabilization funds for each fiscal year from 2020 through 2024 (Division B, Sec. 408).

• Appropriates $2.55 billion to family care for essential workers for the 2020 fiscal year, of which $850 million must be obligated by states during the 2020 calendar year (Division B, Sec. 409).

• Amends the definition of “applicable percentage” for child and dependent care tax credits to mean 50 percent reduced by 1 percentage point for each $2,000 by which the taxpayer’s adjusted gross income for the taxable year exceeds $120,000 (Division B, Sec. 402).

• Appropriates $850 million to the Department of Health and Human Services Administration for Children and Families for Social Services Block Grants (Division A, Title II).

• Appropriates $5 million for making grants under the Community Volunteer Income Tax Assistance Matching Grants program (Division A, Title II).

• Prohibits a plan or other arrangement that otherwise satisfies all applicable requirements of the Internal Revenue Code from failing to be treated as a cafeteria plan or dependent care flexible spending arrangement merely because such plan or arrangement permits participants to carry over a number of unused benefits or contributions remaining in a dependent care flexible spending arrangement from the plan year ending in 2020 to the plan year ending in 2021 (Division B, Sec. 406).

Full Bill Text

Full Bill Text