DOVER – In an effort to better support working parents and caregivers facing skyrocketing care costs, lawmakers on Thursday introduced legislation to expand Delaware’s Child and Dependent Care Expense Tax Credit.
Sponsored by Rep. Melanie Ross Levin and Sen. Elizabeth “Tizzy” Lockman, House Bill 274 would increase Delaware’s Child and Dependent Care Expense Tax Credit from 50 percent to 100 percent of the federal credit, doubling the relief available to eligible families.
“Caring for a child or dependent is a full-time job—but it doesn’t pay the bills,” said Rep. Ross Levin. “For too many Delaware families, the cost of care rivals or exceeds their mortgage payment and is often more than in-state college tuition, without access to loans or scholarships. This bill recognizes that reality and provides meaningful relief.”
The average cost of child care in Delaware is approximately $12,000 per child per year. Yet state child care assistance is limited to families earning $65,000 or less, leaving many middle-income families without support. For families earning just above that threshold, child care for two children can consume up to 35 percent of household income.
New survey data collected this fall by the First State Pre-K Coalition highlights the growing strain child care costs are placing on Delaware families:
- One in two families reported going into debt to pay for child care
- One in five reported skipping meals or sacrificing other basic needs
- One in four said they are considering leaving Delaware due to child care costs
- One in three turned down a job or promotion, reduced work hours, or left the workforce to meet child care demands
The Child and Dependent Care Expense Tax Credit helps working people offset costs associated with caring for young children, aging parents, spouses, or dependents with disabilities. To qualify, taxpayers must have paid for care so they could work or look for work.
Under current law, Delaware offers a nonrefundable credit equal to 50 percent of the federal Child and Dependent Care Tax Credit, meaning families receive only half of the benefit allowed at the federal level. House Bill 274 would provide a full 100 percent state match, allowing families to keep more of their earnings to cover essential care costs.
“When families can afford care, they can stay in the workforce and support their families,” said Ross Levin. “That strengthens household stability and our broader economy.”
“Child and dependent care are essential for working parents and caregivers,” said Sen. Lockman. “A full state match acknowledges that reality, eases financial strain, and helps ensure Delaware remains a place where working families can afford to live and thrive.”
HB 274 has been assigned to the House Revenue & Finance Committee.
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