State Child and Dependent Care Tax Provisions Help Families Afford Out-of- Pocket Child Care Expenses In 2022, the average annual cost of child care for one child in the United States was $10,853, though prices vary widely between states. [...] Additionally, the Child Care and Development Block Grant (CCDBG)—the main federal program that provides funding to states to help families afford child care, improve the safety and quality of child care, and support the child care workforce—is so underfunded that only 16 percent of eligible children receive care. [...] While direct child care investments are needed to make child care affordable and accessible for all families, states can help families offset their child care costs by enacting child and dependent care tax provisions. [...] STATE TAX PROVISION1 MAXIMUM VALUE Arkansas Child Care Credit $420 Arkansas Early Childhood Program Credit2 $420 California Child and Dependent Care Expenses Credit $1,050 Colorado Child Care Expense Tax Credit3 $1,050 Colorado Low-Income Child Care Expenses Credit $1,000 Delaware Child Care Credit4 $1,050 District of Columbia Credit for Child and Dependent Care Expenses $672 District of Columbia. [...] Seize the Opportunity to Make Care Less Taxing The severe underinvestment in the child care industry has made it difficult for families to afford child care and for child care workers to make ends meet across the country—but states can leverage the tax code to help.
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