{
  "id": "RL30081",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL30081",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 102099,
      "date": "1999-03-15",
      "retrieved": "2016-05-24T20:46:09.119941",
      "title": "Child Care Subsidies: Federal Grants and Tax Benefits for Working Families",
      "summary": "Most parents with minor children are employed, and for many child care is a significant but\nnecessary expenditure. For poor families it can consume one-sixth of their income, while for middle\nincome families it can sharply reduce the returns from working. Some parents do not use child care,\narranging work schedules around the school day or leaving children home alone, while others rely\non unpaid care by relatives. These arrangements sometimes reflect parental choice, but other times\nthey indicate that paid child care is not affordable.\n  Congress has authorized both federal grants and tax benefits to help working families with child\ncare expenses. However, these provisions were not explicitly designed to complement one another. \nThe principal grants are made to states from the  Child Care and Development Fund\n(CCDF) , a\nprogram that helps provide child care assistance to welfare and low-income working families\nthrough certificates (vouchers) or direct purchase. The principal tax benefit is the  child and\ndependent care tax credit (DCTC) , which allows working families to claim a federal\nincome tax\ncredit for child care expenses. In addition, for families with participating employers, the\n dependent\ncare assistance program (DCAP)  allows working families to exclude from their gross\nincome\nemployer assistance for child care. Together, these provisions represent a federal budget\ncommitment of more than $6 billion annually.\n  These child care subsidies are aimed at different populations, with the grant program primarily\nintended for low-income families and the tax provisions primarily benefitting middle and higher\nincome families. There are gaps in coverage within states for lower middle income families, and\ninstances in which slight differences in income can result in large differences in benefits. Moreover,\nbecause CCDF eligibility and cost-sharing rules vary from state to state, similar families may be\ntreated very differently in one state versus another. \n  These patterns may suggest that the federal government lacks a cohesive policy of child care\nsubsidies for working families. However, the CCDF and tax provisions were developed\nindependently of one another and have been justified on different grounds: the grant program\nreflects public welfare arguments that welfare and low-income families need child care assistance\nto enter the workforce and remain employed, while the tax provisions reflect traditional tax\nprinciples regarding recognition of work-related expenses. Though an objective of the CCDF is to\nmake  some  form of care affordable to low-income families to enable them to work,\nneither it nor the\ntax provisions are intended to make child care affordable for  all  families.\n  Recently, the Administration and Members of Congress have proposed legislation to expand\nboth the CCDF and the DCTC. These proposals may offer an opportunity to consider the extent to\nwhich the subsidy gaps and inconsistencies should be eliminated. Congress might also wish to\nexamine whether child care should be generally affordable and the relationship of subsidies to the\nsupply and type of child care that families can actually obtain.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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          "url": "http://www.crs.gov/Reports/pdf/RL30081",
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      "topics": []
    }
  ],
  "topics": [
    "Domestic Social Policy"
  ]
}