Lawmakers have introduced House Bill 274 to expand Delaware’s Child and Dependent Care Expense Tax Credit, increasing the state match from 50% to 100% of the federal credit. The legislation, sponsored by Rep. Melanie Ross Levin and Sen. Elizabeth “Tizzy” Lockman, aims to provide greater financial relief to working families and caregivers facing rising care costs. The credit helps offset expenses for child care, elder care, and household services needed to work or seek employment. Survey data shows many Delaware families are struggling, with some going into debt, skipping meals, or even considering leaving the state due to high care costs. HB 274 has been assigned to the House Revenue & Finance Committee.
Additional Information from Legislative Hall:
In an effort to better support working parents and caregivers facing rising care costs, lawmakers introduced legislation Thursday to expand Delaware’s Child and Dependent Care Expense Tax Credit.
Sponsored by Rep. Melanie Ross Levin and Sen. Elizabeth “Tizzy” Lockman, House Bill 274 would increase Delaware’s Child and Dependent Care Expense Tax Credit from 50 percent to 100 percent of the federal credit, doubling the relief available to eligible families.
“Caring for a child or dependent is a full-time job—but it doesn’t pay the bills,” said Rep. Ross Levin.
“For too many Delaware families, the cost of care rivals or exceeds their mortgage payment and is often more than in-state college tuition, without access to loans or scholarships. This bill recognizes that reality and provides meaningful relief.”
The Child and Dependent Care Expense Tax Credit is designed to help working people offset the costs associated with caring for young children, aging parents, spouses, or dependents with disabilities. To qualify for the credit, taxpayers must have paid for care so they could work or look for work.
Eligible expenses include child care, elder care, day camps, and household services such as babysitters or in-home caregivers. Under federal law, taxpayers may claim a percentage of qualified expenses, up to $3,000 for one qualifying individual or $6,000 for two or more, depending on income. The maximum federal credit allows 35 percent of eligible expenses for households earning between $0 and $15,000, gradually declining to 20 percent for those earning above $43,000.
Delaware currently offers a non refundable credit equal to 50 percent of the federal Child
and Dependent Care Tax Credit (CDCTC). For a resident to qualify, they must first qualify for the federal credit, and then Delaware allows them to reduce their state tax liability by half of that amount.
Under HB 274, Delaware would provide eligible residents with a full 100% match of the federal credit.
“By fully matching the federal child and dependent care tax credit, this legislation puts significant relief into the hands of working families,” said Senator Elizabeth “Tizzy” Lockman.
“Child and dependent care are essential for many parents who remain in the workforce. A 100% state match recognizes that reality, eases financial strain on families, and strengthens our economy by supporting the individuals who earn and provide for those who depend on them.”
New survey data collected by the First State Pre-K Coalition highlights the growing strain child care costs are placing on Delaware families:
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One in two families reported going into debt to pay for child care
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One in five reported skipping meals or sacrificing other basic needs
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One in four said they are considering leaving Delaware due to child care costs
