H.R. 2900 · Where this bill is now
In committee
Introduced in the House, sent to the Committee on Ways and Means, Apr 10, 2025
What this bill does
In plain words · AI-written from the official summaryExpands tax credits for childcare expenses
This bill makes it easier and cheaper for people to afford childcare. It increases the tax credit for childcare costs from a maximum of 35% to 50%, raises the minimum credit from 20% to 35%, and makes the credit refundable, meaning people could get money back even if they owe no taxes. It also increases the amount of employer-provided childcare benefits that are tax-free from $5,000 to $7,500 per year.
How it affects you
If you pay for childcare so you can work or search for a job, you'd be eligible for a bigger tax credit or refund. Parents and guardians with lower incomes would see the biggest benefit, since the minimum credit increases. If your employer offers a childcare benefits program, you'd be able to exclude more of that benefit from your taxes.
Read the official summary (Introduced in House, Apr 10, 2025)
Promoting Affordable Childcare for Everyone Act or the PACE Act
This bill increases and makes refundable the tax credit for qualified child and dependent care expenses. The bill also increases the exclusion from gross income for employer-provided child and dependent care benefits.
Under current law, a nonrefundable tax credit is allowed for up to 35% (maximum tax credit percentage) of qualified child and dependent care expenses incurred by an individual to work or look for work, up to a maximum amount. The percentage of such expenses allowed as a tax credit may be reduced, but not below 20% (minimum tax credit percentage), based on an individual’s adjusted gross income.
The bill generally increases the tax credit for qualified child and dependent care expenses by
• increasing the maximum tax credit percentage to 50%,
• increasing the minimum tax credit percentage to 35%, and
• adjusting the maximum credit amounts annually for inflation.
The bill also makes the tax credit for qualified child and dependent care expenses refundable.
Finally, the bill increases and adjusts for inflation the amount that may be excluded from gross income for employer-sponsored child and dependent care benefits (e.g., dependent care flexible spending arrangements) to $7,500 (from $5,000).
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
1st SessionH. R. 2900
A BILL
PACE Act
Sponsor: Rep. Claudia Tenney (R-NY-24) · Introduced Apr 10, 2025 · Taxation · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Apr 10, 2025: “Referred to the House Committee on Ways and Means.”