Removing Family Discrimination Increases CDCTC Benefits

Although the “One Big Beautiful Bill” (OBBB) substantially increased the Child and Dependent Care Tax Credit (CDCTC), IFS has identified two major ways in which the CDCTC continues to discriminate against many families in need. First, benefits are capped at the second child, leaving no additional benefits to larger families. Second, it excludes single-income married families. In 2019, 65% of US families fell into one or both of these categories, leaving them with insufficient support or none at all. Eliminating single-earner and third child discrimination from the CDCTC would both significantly expand the average benefit for families and minimize the share of families missing out on the benefit.

by Sophie Anderson