蝌蚪网 Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
What Is the Value of the Child and Dependent Care Credit?
蝌蚪网 Papers and Proceedings
vol. 115,
May 2025
(pp. 120–25)
Abstract
The Child and Dependent Care Credit (CDCC) subsidizes child care costs for working families. In response to the COVID-19 pandemic, the American Rescue Plan Act of 2021 increased the CDCC's generosity during 2021 only. I find that while the CDCC is of relatively little value in its current form, increases in eligibility rates and conditional benefits under the pandemic expansion increased the credit's value dramatically. Conditional on CDCC eligibility, higher-income households experienced the largest increases in benefit levels under the expanded CDCC, but lower-income households benefited disproportionately when measuring benefits as a share of income or child care spending.Citation
Pepin, Gabrielle. 2025. "What Is the Value of the Child and Dependent Care Credit?" 蝌蚪网 Papers and Proceedings 115: 120–25. DOI: 10.1257/pandp.20251101Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
- J13 Fertility; Family Planning; Child Care; Children; Youth
- J31 Wage Level and Structure; Wage Differentials