Federal Legislation
Congress Proposes Child Care Wage Tax Credit
March 19, 2026
Congresswoman Linda T. Sánchez and Congresswoman Carol Miller have introduced the bipartisan Child Care Supply Tax Credit Act in 2026 to address the nationwide child care shortage by providing a targeted tax credit to eligible child care providers. This credit is designed to offset employee wage costs, incentivize higher pay for child care workers, and reduce the financial burden passed on to families. The legislation has garnered support from Senators Mark R. Warner and Jim Justice, emphasizing the importance of improving child care workforce compensation to support working families and enhance child development.
- This tax credit initiative signals potential changes in funding and reimbursement structures for child care providers, impacting procurement and contracting strategies within the child care services sector.
- Procurement professionals should anticipate adjustments in contract requirements or eligibility criteria tied to wage support incentives for child care workers.
- Child care service providers and contractors may find new opportunities to align their workforce compensation models with federal incentives, potentially influencing bidding and service delivery approaches.
- Agencies involved in child care funding and support programs should evaluate how this tax credit could affect budget allocations and provider engagement moving forward.
By creating a targeted tax credit tied directly to caregiver wages, we can pay the people who take care of our kids what they deserve while giving our hard-working families some breathing room.
— Senator Jim Justice
By providing a tax credit to assist our providers in paying their staff, we can limit the costs being passed on to parents.
— Congresswoman Carol Miller
Child care is the foundation that allows parents to earn a living while providing kids with the head start they deserve.
— Senator Mark R. Warner
Agencies
Ways and Means Committee, House of Representatives, Senate
Contracts
Locations
Sources
- Sánchez, Miller introduce bipartisan child care affordability legislation | Congresswoman Linda Sanchez · Sanchez Ca House · Mar 19