II 

118TH CONGRESS 

2D SESSION S. 3787 

To amend the Internal Revenue Code of 1986 to increase the credit for 

employers establishing workplace child care facilities, to increase the 

child care credit to encourage greater use of quality child care services, 

to provide incentives for students to earn child care-related degrees 

and to work in child care facilities, and to increase the exclusion for 

employer-provided dependent care assistance. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 8 (legislative day, FEBRUARY 7), 2024 

Mrs. SHAHEEN (for herself, Mr. KING, Ms. KLOBUCHAR, and Mrs. GILLIBRAND) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to increase 

the credit for employers establishing workplace child care 

facilities, to increase the child care credit to encourage 

greater use of quality child care services, to provide 

incentives for students to earn child care-related degrees 

and to work in child care facilities, and to increase 

the exclusion for employer-provided dependent care assistance. 

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


kjohnson on DSK7ZCZBW3PROD with $$_JOB
2 

•S 3787 IS

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Right Start Child Care 

3 and Education Act of 2024’’. 

4 SEC. 2. INCREASE IN EMPLOYER-PROVIDED CHILD CARE 

5 CREDIT. 

6 (a) INCREASE IN CREDITABLE PERCENTAGE OF

7 CHILD CARE EXPENDITURES.—Paragraph (1) of section 

8 45F(a) of the Internal Revenue Code of 1986 is amended 

9 by striking ‘‘25 percent’’ and inserting ‘‘50 percent’’. 

10 (b) INCREASE IN CREDITABLE PERCENTAGE OF RE11 SOURCE AND REFERRAL EXPENDITURES.—Paragraph (2) 

12 of section 45F(a) of the Internal Revenue Code of 1986 

13 is amended by striking ‘‘10 percent’’ and inserting ‘‘20 

14 percent’’. 

15 (c) INCREASE IN MAXIMUM CREDIT.—Subsection (b) 

16 of section 45F of the Internal Revenue Code of 1986 is 

17 amended by striking ‘‘$150,000’’ and inserting 

18 ‘‘$500,000’’. 

19 (d) SPECIAL RULE FOR SMALL BUSINESSES.—Sec20 tion 45F(e) of the Internal Revenue Code of 1986 is 

21 amended by adding at the end the following new para22 graph: 

23 ‘‘(4) SMALL BUSINESSES.— 

24 ‘‘(A) IN GENERAL.—In the case of a tax25 payer described in subparagraph (B)— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
3 

•S 3787 IS

1 ‘‘(i) subsection (a)(1) shall be applied 

2 by substituting ‘60 percent’ for ‘50 per3 cent’, and 

4 ‘‘(ii) subsection (b) shall be applied by 

5 substituting ‘$600,000’ for ‘$500,000’. 

6 ‘‘(B) TAXPAYER DESCRIBED.—A taxpayer 

7 described in this subparagraph is a taxpayer 

8 that meets the gross receipts test of section 

9 448(c), determined— 

10 ‘‘(i) by substituting ‘5-taxable-year’ 

11 for ‘3-taxable-year’ in paragraph (1) there12 of, and 

13 ‘‘(ii) by substituting ‘5-year’ for ‘3- 

14 year’ each place such term appears in 

15 paragraph (3)(A) thereof.’’. 

16 (e) TREATMENT OF JOINTLY OWNED OR OPERATED

17 CHILDCARE FACILITY.—Section 45F(c)(1) of the Internal 

18 Revenue Code of 1986 is amended by adding at the end 

19 the following new subparagraph: 

20 ‘‘(C) JOINTLY OWNED OR OPERATED

21 CHILDCARE FACILITY.—For purposes of sub22 paragraph (A)(i)(I), a facility shall not fail to 

23 be treated as a qualified childcare facility of the 

24 taxpayer merely because such facility is jointly 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
4 

•S 3787 IS

1 owned or operated by the taxpayer and other 

2 persons.’’. 

3 (f) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2024. 

6 SEC. 3. 3-YEAR CREDIT FOR INDIVIDUALS HOLDING CHILD 

7 CARE-RELATED DEGREES WHO WORK IN LI8 CENSED CHILD CARE FACILITIES. 

9 (a) IN GENERAL.—Subpart C of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 

11 1986 is amended by inserting after section 36B the fol12 lowing new section: 

13 ‘‘SEC. 36C. RIGHT START CHILD CARE AND EDUCATION 

14 CREDIT. 

15 ‘‘(a) IN GENERAL.—In the case of an individual who 

16 is an eligible child care provider for the taxable year, there 

17 shall be allowed as a credit against the tax imposed by 

18 this chapter for the taxable year the amount of— 

19 ‘‘(1) $4,000, in the case of an eligible child care 

20 provider with a degree described in subsection 

21 (c)(1)(A)(i), and 

22 ‘‘(2) $2,500, in any other case. 

23 ‘‘(b) 3-YEAR CREDIT.— 

24 ‘‘(1) IN GENERAL.—The credit allowable by 

25 subsection (a) for any taxable year to an individual 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
5 

•S 3787 IS

1 shall be allowed for such year only if the individual 

2 elects the application of this section for such year. 

3 ‘‘(2) ELECTION.—An election to have this sec4 tion apply may not be made by an individual for any 

5 taxable year if such an election by such individual is 

6 in effect for any 3 prior taxable years. 

7 ‘‘(c) ELIGIBLE CHILD CARE PROVIDER.—For pur8 poses of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘eligible child 

10 care provider’ means, for any taxable year, any indi11 vidual if— 

12 ‘‘(A) as of the close of such taxable year, 

13 such individual holds— 

14 ‘‘(i) a bachelor’s degree, or 

15 ‘‘(ii) an associate’s degree, 

16 in early childhood education, child care, or a re17 lated degree, and such degree was awarded by 

18 an eligible educational institution (as defined in 

19 section 25A(f)(2)), and 

20 ‘‘(B) during such taxable year, such indi21 vidual performs at least 1,200 hours of child 

22 care services at a facility if— 

23 ‘‘(i) the principal use of the facility is 

24 to provide child care services, 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
6 

•S 3787 IS

1 ‘‘(ii) no more than 25 percent of the 

2 children receiving child care services at the 

3 facility are children (as defined in section 

4 152(f)) of the individual or such individ5 ual’s spouse, and 

6 ‘‘(iii) the facility meets the require7 ments of all applicable laws and regula8 tions of the State or local government in 

9 which it is located, including the licensing 

10 of the facility as a child care facility. 

11 Subparagraph (B)(i) shall not apply to a facil12 ity which is the principal residence (within the 

13 meaning of section 121) of the operator of the 

14 facility. 

15 ‘‘(2) CHILD CARE SERVICES.—The term ‘child 

16 care services’ means child care and early childhood 

17 education.’’. 

18 (b) CONFORMING AMENDMENTS.— 

19 (1) Section 6211(b)(4)(A) of the Internal Rev20 enue Code of 1986 is amended by inserting ‘‘, 36C’’ 

21 after ‘‘36B’’. 

22 (2) Paragraph (2) of section 1324(b) of title 

23 31, United States Code, is amended by inserting ‘‘, 

24 36C’’ after ‘‘36B’’. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
7 

•S 3787 IS

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

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

3 of the Internal Revenue Code of 1986 is amended by in4 serting after the item relating to section 36B the following 

5 new item: 

‘‘Sec. 36C. Right start child care and education credit.’’. 

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

7 this section shall apply to taxable years beginning after 

8 December 31, 2024. 

9 SEC. 4. INCREASE IN EXCLUSION FOR EMPLOYER-PRO10 VIDED DEPENDENT CARE ASSISTANCE. 

11 (a) IN GENERAL.—Section 129(a)(2)(A) of the Inter12 nal Revenue Code of 1986 is amended by striking ‘‘$5,000 

13 ($2,500’’ and inserting ‘‘the applicable limitation amount 

14 (half such amount’’. 

15 (b) CONFORMING AMENDMENT.—Section 129(a)(2) 

16 of the Internal Revenue Code of 1986 is amended by strik17 ing subparagraph (D) and by inserting after subparagraph 

18 (C) the following new subparagraph: 

19 ‘‘(D) APPLICABLE LIMITATION AMOUNT.— 

20 For purposes of this paragraph, the term ‘ap21 plicable limitation amount’ means the amount 

22 that is the sum of— 

23 ‘‘(i) $10,000, and 

24 ‘‘(ii) $2,000 for each individual de25 scribed in subparagraph (A) or (B) of secVerDate Sep 11 2014 00:48 Feb 13, 2024 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3787.IS S3787

kjohnson on DSK7ZCZBW3PROD with $$_JOB
8 

•S 3787 IS

1 tion 21(b)(1) with respect to the tax2 payer.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2024. 

Æ 


kjohnson on DSK7ZCZBW3PROD with $$_JOB