We must support Iowa’s working families. The child and dependent care tax credit is an effective ways to help them succeed.
Iowa has a big demand for affordable child care, with one of the highest rates in the nation of households with all parents employed. Seventy-seven percent of Iowa households with kids depend on child care so that parents can work.
The state’s child and dependent care tax credit helps families with children under 13 with a portion of their child care expenses. The Iowa credit is available on top of the federal child care credit. Both are based on income, allowing working families to stretch their hard-earned dollars a little farther.
Unfortunately, income guidelines for the Iowa credit have not been adjusted since 2006. With inflation over the years, the tax credit has become less effective. Fewer Iowans qualify for it, and those who do, get much less help. At a time of stagnant wages but increasing costs, families really feel the pinch.
New legislation in the Iowa Senate would raise income levels to account for cost-of-living increases. SF 365 would put the top qualifying income level near Iowa’s median household income. Indexing those income levels would ensure the credit remains an effective option for working families well into the future.
— Sen. Rich Taylor represents Henry and Lee counties and portions of Washington and Jefferson counties. He can be reached via email at firstname.lastname@example.org, or by calling 319-931-1568.