Enhancement of child and dependent care tax credit

(a) In general Paragraph (2) of section 21(a) is amended to read as follows: (2) Applicable percentage defined For purposes of paragraph (1), the term applicable percentage means 50 percent— (A) reduced (but not below 35 percent) by 1 percentage point for each $2,000 or fraction thereof by which the taxpayer's adjusted gross income for the taxable year exceeds $15,000, and (B) further reduced (but not below 20 percent) by 1 percentage point for each $2,000 ($4,000 in the case of a joint return) or fraction thereof by which the taxpayer's adjusted gross income for the taxable year exceeds $75,000 ($150,000 in the case of a joint return).. (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2025.