A bill to amend the Internal Revenue Code of 1986 to provide a credit for increasing wages paid to child care providers.

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3534 Introduced in Senate (IS)]

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119th CONGRESS
  1st Session
                                S. 3534

  To amend the Internal Revenue Code of 1986 to provide a credit for 
             increasing wages paid to child care providers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 17, 2025

Mr. Warner (for himself and Mr. Justice) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide a credit for 
             increasing wages paid to child care providers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CHILD CARE SUPPLY CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45BB. CHILD CARE SUPPLY CREDIT.

    ``(a) In General.--For purposes of section 38, the amount of the 
child care supply credit determined under this section with respect to 
any employer for any taxable year is an amount equal to the applicable 
percentage of the qualified child care wages paid or incurred by the 
employer.
    ``(b) Applicable Percentage.--For purposes of this section--
            ``(1) In general.--Except as provided in paragraph (2), the 
        applicable percentage is 5 percent.
            ``(2) Rural areas.--
                    ``(A) In general.--In the case of qualified child 
                care wages paid or incurred with respect to employment 
                at an eligible childcare facility which is located in a 
                rural area, the applicable percentage is 7 percent.
                    ``(B) Rural area defined.--For purposes of this 
                paragraph, the term `rural area' means any area other 
                than an urban area (as defined in section 101(a)(35) of 
                title 23, United States Code).
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified child care wages.--
                    ``(A) In general.--The term `qualified child care 
                wages' means wages paid to qualified child care 
                workers.
                    ``(B) Wages.--The term `wages' has the meaning 
                given such term by subsection (b) of section 3306 
                (determined without regard to any dollar limitation 
                contained in such section). Such term shall not include 
                any amount taken into account for purposes of 
                determining any other credit allowed under this 
                subpart.
            ``(2) Qualified child care worker.--
                    ``(A) In general.--The term `qualified child care 
                worker' means any employee who--
                            ``(i) is employed at an eligible child care 
                        facility, and
                            ``(ii) provides child care services.
            ``(3) Eligible child care facility.--The term `eligible 
        child care facility' means any facility which--
                    ``(A) provides child care services for at least 6 
                individuals,
                    ``(B) receives a fee, payment, or grant for 
                providing such services, and
                    ``(C) complies with all applicable laws and 
                regulations of a State or unit of local government.
            ``(4) Child care services.--The term `child care services' 
        means the providing of care, education, protection, 
        supervision, or guidance to children.
    ``(d) Election To Have Credit Not Apply.--
            ``(1) In general.--A taxpayer may elect to have this 
        section not apply for any taxable year.
            ``(2) Other rules.--Rules similar to the rules of 
        paragraphs (2) and (3) of section 51(j) shall apply for 
        purposes of this subsection.''.
    (b) Credit Treated as Part of General Business Credit.--Section 
38(b) of the Internal Revenue Code of 1986 is amended by striking 
``plus'' at the end of paragraph (40), by striking the period at the 
end of paragraph (41) and inserting ``, plus'', and by adding at the 
end the following new paragraph:
            ``(42) the child care supply credit determined under 
        section 45BB(a).''.
    (c) Elective Payment.--Section 6417(b) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new paragraph:
            ``(13) The child care supply credit determined under 
        section 45BB(a).''.
    (d) Denial of Double Benefit.--Section 280C(a) of the Internal 
Revenue Code of 1986 is amended by inserting ``45BB(a),'' after 
``45S(a),''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 45BB. Child care supply credit.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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