Millions of Americans pay for childcare or stay at home to provide care instead of working. Millions more provide unpaid care to an adult, while some families are doing both – called the “sandwich generation”.
Workers spend time out of the workforce providing this care, thus costing their families money. The two presidential candidates have proposed different ways of reducing part of this burden on families through their child care plans. Let’s take a high-level look at both.
- Parents could deduct the average cost of child care in their state, based on their child's age. The deduction would be available for up to four children or elderly dependents.
- Anyone earning less than $250,000 would be eligible ($500,000 for married couples)
- Lower-income families that don’t pay any tax could still get tax benefit through Earned Income Tax Credit
- Stay-at-home parents would be eligible for the tax deduction also.
- Dependent Care Savings Accounts would be created where families could put money in before taxes and it would grow tax free. Accounts could be used for child care and school tuition as well as for elderly dependent care including in-home nursing.
- For lower income parents, government would match half of the first $1,000 deposited per year.
- Six weeks of paid maternity leave if the employer does not offer it already.
- Childcare expenses would be capped at 10% of a family’s income.
- 20% tax credit on up to $6,000 in caregiving costs for elderly family members. This equates to up to $1,200.
- Workers would receive credit toward Social Security benefits when they take time out of the workforce as a caregiver.
- 12 weeks of paid maternity leave.
- Universal pre-K for 4 year olds.