Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311977 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17538
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
Child and Dependent Care Credit
child care
American Rescue Plan Act of 2021
eligibility
benefits
JEL: 
H24
J13
Document Type: 
Working Paper

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