What Is the Value of the Child and Dependent Care Credit?

Gabrielle Pepin

No 17538, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The Child and Dependent Care Credit (CDCC) subsidizes child care costs for working families. In response to the Covid-19 pandemic, the American Rescue Plan Act of 2021 increased the CDCC's generosity during 2021 only. I find that while the CDCC is of relatively little value in its current form, increases in eligibility rates and conditional benefits under the pandemic expansion increased the credit's value dramatically. Conditional on CDCC eligibility, higher-income households experienced the largest increases in benefit levels under the expanded CDCC, but lower-income households benefited disproportionately when measuring benefits as a share of income or child care spending.

Keywords: Child and Dependent Care Credit; child care; American Rescue Plan Act of 2021; eligibility; benefits (search for similar items in EconPapers)
JEL-codes: H24 J13 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2024-12
New Economics Papers: this item is included in nep-lab
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp17538.pdf (application/pdf)

Related works:
Working Paper: What Is the Value of the Child and Dependent Care Credit? (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp17538

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().