I 

118TH CONGRESS 

2D SESSION H. R. 10041 

To amend the Internal Revenue Code of 1986 to establish the childcare 

provider startup credit, to increase the amount of and make refundable 

the expenses for household and dependent care credit, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 25, 2024 

Mr. GOTTHEIMER introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to establish 

the childcare provider startup credit, to increase the 

amount of and make refundable the expenses for household and dependent care credit, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Lowering Infant and 

5 Toddler Tuition for Learning and Education Act of 2024’’ 

6 or the ‘‘LITTLE Act of 2024’’. 


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1 SEC. 2. CHILDCARE PROVIDER STARTUP CREDIT. 

2 (a) IN GENERAL.—Subpart D of part IV of sub3 chapter A of chapter 1 of the Internal Revenue Code of 

4 1986 is amended by adding at the end the following new 

5 section: 

6 ‘‘SEC. 45BB. CHILDCARE PROVIDER STARTUP CREDIT. 

7 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a 

8 qualified taxpayer, there shall be allowed as a credit 

9 against the tax imposed by this subtitle an amount equal 

10 to 30 percent of the qualified childcare startup expenses 

11 of the taxpayer for the taxable year. 

12 ‘‘(b) QUALIFIED TAXPAYER.—For purposes of this 

13 section, the term ‘qualified taxpayer’ means, with respect 

14 to a taxable year, a taxpayer that— 

15 ‘‘(1) provides childcare services in compliance 

16 with any applicable State or local requirements for 

17 such services, 

18 ‘‘(2) provided such services to 2 or more chil19 dren for a significant portion of the taxable year. 

20 ‘‘(c) QUALIFIED CHILDCARE STARTUP EXPENSES.— 

21 For purposes of this section, the term ‘qualified childcare 

22 startup expenses’ means, with respect to a taxable year, 

23 a start-up expenditure (as defined in section 195(c)(1)) 

24 paid or incurred during the 2-year period ending on the 

25 last day of such taxable year to establish and operate a 

26 childcare service. 


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1 ‘‘(d) LIMITATION.—The aggregate amount of credits 

2 determined under subsection (a) for any taxpayer in all 

3 taxable years may not exceed $10,000. 

4 ‘‘(e) APPLICATION WITH OTHER CREDITS.— 

5 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF

6 GENERAL BUSINESS CREDIT.— 

7 ‘‘(f) DENIAL OF DOUBLE BENEFIT.—No credit shall 

8 be allowed under subsection (a) for any expense for which 

9 a deduction or credit is allowed under any other provision 

10 of this chapter.’’. 

11 (b) CREDIT ALLOWED S PART OF GENERAL BUSI12 NESS CREDIT.—Section 38(b) is amended by striking 

13 ‘‘plus’’ at the end of paragraph (40), by striking the period 

14 at the end of paragraph (41) and inserting ‘‘, plus’’, and 

15 by adding at the end the following new paragraph: 

16 ‘‘(42) the childcare provider startup credit de17 termined under section 45BB(a).’’. 

18 (c) CLERICAL AMENDMENT.—The table of sections 

19 for subpart B of part IV of subchapter A of chapter 1 

20 of the Internal Revenue Code of 1986 is amended by in21 serting after the item relating to section 36B the following 

22 new item: 

‘‘Sec. 45BB. Childcare provider startup credit.’’. 

23 (d) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to expenses paid or incurred after 

25 the date of the enactment of this Act. 


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1 SEC. 3. HOUSEHOLD AND DEPENDENT CARE CREDIT IN2 CREASED AND MADE REFUNDABLE. 

3 (a) IN GENERAL.—Subpart C of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amending by inserting after section 36B the fol6 lowing new section: 

7 ‘‘SEC. 36C. EXPENSES FOR HOUSEHOLD AND DEPENDENT 

8 CARE SERVICES NECESSARY FOR GAINFUL 

9 EMPLOYMENT. 

10 ‘‘(a) ALLOWANCE OF CREDIT.— 

11 ‘‘(1) IN GENERAL.—In the case of an individual 

12 for which there are 1 or more qualifying individuals 

13 with respect to such individual, there shall be al14 lowed as a credit against the tax imposed by this 

15 chapter for the taxable year an amount equal to the 

16 applicable percentage of the employment-related ex17 penses paid by such individual during the taxable 

18 year. 

19 ‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For 

20 purposes of paragraph (1), the term ‘applicable per21 centage’ means 50 percent reduced (but not below 

22 35 percent) by 1 percentage point for each $2,000 

23 (or fraction thereof) by which the taxpayer’s ad24 justed gross income for the taxable year exceeds 

25 $15,000. 


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1 ‘‘(b) DEFINITIONS OF QUALIFYING INDIVIDUAL AND

2 EMPLOYMENT-RELATED EXPENSES.—For purposes of 

3 this section— 

4 ‘‘(1) QUALIFYING INDIVIDUAL.—The term 

5 ‘qualifying individual’ means— 

6 ‘‘(A) a dependent of the taxpayer (as de7 fined in section 152(a)(1)) who has not attained 

8 age 13, 

9 ‘‘(B) a dependent of the taxpayer (as de10 fined in section 152, determined without regard 

11 to subsections (b)(1), (b)(2), and (d)(1)(B)) 

12 who is physically or mentally incapable of car13 ing for himself or herself and who has the same 

14 principal place of abode as the taxpayer for 

15 more than one-half of such taxable year, or 

16 ‘‘(C) the spouse of the taxpayer, if the 

17 spouse is physically or mentally incapable of 

18 caring for himself or herself and who has the 

19 same principal place of abode as the taxpayer 

20 for more than one-half of such taxable year. 

21 ‘‘(2) EMPLOYMENT-RELATED EXPENSES.— 

22 ‘‘(A) IN GENERAL.—The term ‘employ23 ment-related expenses’ means amounts paid for 

24 the following expenses, but only if such ex25 penses are incurred to enable the taxpayer to be 


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1 gainfully employed for any period for which 

2 there are 1 or more qualifying individuals with 

3 respect to the taxpayer: 

4 ‘‘(i) expenses for household services, 

5 and 

6 ‘‘(ii) expenses for the care of a quali7 fying individual. 

8 Such term shall not include any amount paid 

9 for services outside the taxpayer’s household at 

10 a camp where the qualifying individual stays 

11 overnight. 

12 ‘‘(B) EXCEPTION.—Employment-related 

13 expenses described in subparagraph (A) which 

14 are incurred for services outside the taxpayer’s 

15 household shall be taken into account only if in16 curred for the care of— 

17 ‘‘(i) a qualifying individual described 

18 in paragraph (1)(A), or 

19 ‘‘(ii) a qualifying individual (not de20 scribed in paragraph (1)(A)) who regularly 

21 spends at least 8 hours each day in the 

22 taxpayer’s household. 

23 ‘‘(C) DEPENDENT CARE CENTERS.—Em24 ployment-related expenses described in subpara25 graph (A) which are incurred for services proVerDate Sep 11 2014 22:21 Oct 28, 2024 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H10041.IH H10041

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1 vided outside the taxpayer’s household by a de2 pendent care center (as defined in subpara3 graph (D)) shall be taken into account only if— 

4 ‘‘(i) such center complies with all ap5 plicable laws and regulations of a State or 

6 unit of local government, and 

7 ‘‘(ii) the requirements of subpara8 graph (B) are met. 

9 ‘‘(D) DEPENDENT CARE CENTER DE10 FINED.—For purposes of this paragraph, the 

11 term ‘dependent care center’ means any facility 

12 which— 

13 ‘‘(i) provides care for more than six 

14 individuals (other than individuals who re15 side at the facility), and 

16 ‘‘(ii) receives a fee, payment, or grant 

17 for providing services for any of the indi18 viduals (regardless of whether such facility 

19 is operated for profit). 

20 ‘‘(c) DOLLAR LIMIT ON AMOUNT CREDITABLE.—The 

21 amount of the employment-related expenses incurred dur22 ing any taxable year which may be taken into account 

23 under subsection (a) shall not exceed— 


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1 ‘‘(1) $7,500 if there is 1 qualifying individual 

2 with respect to the taxpayer for such taxable year, 

3 or 

4 ‘‘(2) $15,000 if there are 2 or more qualifying 

5 individuals with respect to the taxpayer for such tax6 able year. 

7 The amount determined under paragraph (1) or (2) 

8 (whichever is applicable) shall be reduced by the aggregate 

9 amount excludable from gross income under section 129 

10 for the taxable year. 

11 ‘‘(d) EARNED INCOME LIMITATION.— 

12 ‘‘(1) IN GENERAL.—Except as otherwise pro13 vided in this subsection, the amount of the employ14 ment-related expenses incurred during any taxable 

15 year which may be taken into account under sub16 section (a) shall not exceed— 

17 ‘‘(A) in the case of an individual who is 

18 not married at the close of such year, such indi19 vidual’s earned income for such year, or 

20 ‘‘(B) in the case of an individual who is 

21 married at the close of such year, the lesser of 

22 such individual’s earned income or the earned 

23 income of his spouse for such year. 

24 ‘‘(2) SPECIAL RULE FOR SPOUSE WHO IS A

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1 SELF.—In the case of a spouse who is a student or 

2 a qualifying individual described in subsection 

3 (b)(1)(C), for purposes of paragraph (1), such 

4 spouse shall be deemed for each month during which 

5 such spouse is a full-time student at an educational 

6 institution, or is such a qualifying individual, to be 

7 gainfully employed and to have earned income of not 

8 less than— 

9 ‘‘(A) $250 if subsection (c)(1) applies for 

10 the taxable year, or 

11 ‘‘(B) $500 if subsection (c)(2) applies for 

12 the taxable year. 

13 ‘‘(e) INFLATION ADJUSTMENT.— 

14 ‘‘(1) IN GENERAL.—In the case of any taxable 

15 year beginning after 2024, the dollar amounts in 

16 this section shall be increased by an amount equal 

17 to— 

18 ‘‘(A) such dollar amount, multiplied by 

19 ‘‘(B) the cost-of-living adjustment deter20 mined under section 1(f)(3) for the calendar 

21 year in which the taxable year begins, deter22 mined by substituting ‘calendar year 2023’ for 

23 ‘calendar year 2016’ in subparagraph (A)(ii). 


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1 ‘‘(2) ROUNDING.—If any increase under para2 graph (1) is not a multiple of $10, such increase 

3 shall be rounded to the nearest multiple of $10. 

4 ‘‘(f) SPECIAL RULES.—For purposes of this sec5 tion— 

6 ‘‘(1) PLACE OF ABODE.—An individual shall 

7 not be treated as having the same principal place of 

8 abode of the taxpayer if at any time during the tax9 able year of the taxpayer the relationship between 

10 the individual and the taxpayer is in violation of 

11 local law. 

12 ‘‘(2) MARRIED COUPLES MUST FILE JOINT RE13 TURN.—If the taxpayer is married at the close of 

14 the taxable year, the credit shall be allowed under 

15 subsection (a) only if the taxpayer and his spouse 

16 file a joint return for the taxable year. 

17 ‘‘(3) MARITAL STATUS.—An individual legally 

18 separated from his spouse under a decree of divorce 

19 or of separate maintenance shall not be considered 

20 as married. 

21 ‘‘(4) CERTAIN MARRIED INDIVIDUALS LIVING

22 APART.—If— 

23 ‘‘(A) an individual who is married and who 

24 files a separate return— 


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1 ‘‘(i) maintains as his home a house2 hold which constitutes for more than one3 half of the taxable year the principal place 

4 of abode of a qualifying individual, and 

5 ‘‘(ii) furnishes over half of the cost of 

6 maintaining such household during the 

7 taxable year, and 

8 ‘‘(B) during the last 6 months of such tax9 able year such individual’s spouse is not a mem10 ber of such household, 

11 such individual shall not be considered as married. 

12 ‘‘(5) SPECIAL DEPENDENCY TEST IN CASE OF

13 DIVORCED PARENTS, ETC.—If— 

14 ‘‘(A) section 152(e) applies to any child 

15 with respect to any calendar year, and 

16 ‘‘(B) such child is under the age of 13 or 

17 is physically or mentally incapable of caring for 

18 himself, 

19 in the case of any taxable year beginning in such 

20 calendar year, such child shall be treated as a quali21 fying individual described in subparagraph (A) or 

22 (B) of subsection (b)(1) (whichever is appropriate) 

23 with respect to the custodial parent (as defined in 

24 section 152(e)(4)(A)), and shall not be treated as a 


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1 qualifying individual with respect to the noncustodial 

2 parent. 

3 ‘‘(6) PAYMENTS TO RELATED INDIVIDUALS.— 

4 No credit shall be allowed under subsection (a) for 

5 any amount paid by the taxpayer to an individual— 

6 ‘‘(A) with respect to whom, for the taxable 

7 year, a deduction under section 151(c) (relating 

8 to deduction for personal exemptions for de9 pendents) is allowable either to the taxpayer or 

10 his spouse, or 

11 ‘‘(B) who is a child of the taxpayer (within 

12 the meaning of section 152(f)(1)) who has not 

13 attained the age of 19 at the close of the tax14 able year. 

15 For purposes of this paragraph, the term ‘taxable 

16 year’ means the taxable year of the taxpayer in 

17 which the service is performed. 

18 ‘‘(7) STUDENT.—The term ‘student’ means an 

19 individual who during each of 5 calendar months 

20 during the taxable year is a full-time student at an 

21 educational organization. 

22 ‘‘(8) EDUCATIONAL ORGANIZATION.—The term 

23 ‘educational organization’ means an educational or24 ganization described in section 170(b)(1)(A)(ii). 


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1 ‘‘(9) IDENTIFYING INFORMATION REQUIRED

2 WITH RESPECT TO SERVICE PROVIDER.—No credit 

3 shall be allowed under subsection (a) for any amount 

4 paid to any person unless— 

5 ‘‘(A) the name, address, and taxpayer 

6 identification number of such person are in7 cluded on the return claiming the credit, or 

8 ‘‘(B) if such person is an organization de9 scribed in section 501(c)(3) and exempt from 

10 tax under section 501(a), the name and address 

11 of such person are included on the return 

12 claiming the credit. 

13 In the case of a failure to provide the information 

14 required under the preceding sentence, the preceding 

15 sentence shall not apply if it is shown that the tax16 payer exercised due diligence in attempting to pro17 vide the information so required. 

18 ‘‘(10) IDENTIFYING INFORMATION REQUIRED

19 WITH RESPECT TO QUALIFYING INDIVIDUALS.—No 

20 credit shall be allowed under this section with re21 spect to any qualifying individual unless the TIN of 

22 such individual is included on the return claiming 

23 the credit. 


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1 ‘‘(g) REGULATIONS.—The Secretary shall issue such 

2 regulations or other guidance as may be necessary or ap3 propriate to carry out the purposes of this section.’’. 

4 (b) CONFORMING AMENDMENTS.— 

5 (1) Section 1324(b) of title 31 is amended by 

6 inserting ‘‘36C,’’ after ‘‘36B,’’. 

7 (2) Section 21 of such Code is repealed. 

8 (3) Section 45F(C)(1)(A)(iv) of such Code, as 

9 added by this Act, is amended by striking ‘‘section 

10 21(b)(1)(A)’’ and inserting ‘‘section 36C(b)(1)(A)’’. 

11 (4) The table of sections for subpart A of part 

12 IV of subchapter A of chapter 1 of such Code is 

13 amended by striking the item relating to section 21. 

14 (5) Section 6211(b)(4)(A) of such Code is 

15 amended by striking ‘‘21 by reason of subsection (g) 

16 thereof,’’. 

17 (6) Section 6213(g)(2) of such Code is amend18 ed— 

19 (A) in subparagraph (H), by striking ‘‘sec20 tion 21’’ and inserting ‘‘section 36C’’, and 

21 (B) in subparagraph (L)— 

22 (i) by striking ‘‘21,’’, and 

23 (ii) by inserting ‘‘36C,’’ after ‘‘32,’’. 


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1 (7) The following sections of such Code are 

2 each amended by striking ‘‘section 21(e)’’ and in3 serting ‘‘section 36C(e)’’. 

4 (A) Section 23(f)(1). 

5 (B) Section 35(g)(6). 

6 (C) Section 129(a)(2)(C), as amended by 

7 this Act. 

8 (8) Section 129 of such Code is further amend9 ed— 

10 (A) in subsection (b)(2), by striking ‘‘sec11 tion 21(d)(2)’’ and inserting ‘‘section 

12 36C(d)(2)’’, and 

13 (B) in subsection (e)(1), by striking ‘‘sec14 tion 21(b)(2)’’ and inserting ‘‘section 

15 36C(b)(2)’’. 

16 (9) Section 213(e) of such Code is amended by 

17 striking ‘‘section 21’’ and inserting ‘‘section 36C’’. 

18 (c) CLERICAL AMENDMENT.—The table of sections 

19 for subpart C of part IV of subchapter A of chapter 1 

20 of such Code is amended by inserting after the item relat21 ing to section 36B the following new item: 

‘‘Sec. 36C. Expenses for household and dependent care services necessary for 

gainful employment.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this section. 

Æ 


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