I 
119TH CONGRESS 
1ST SESSION H. R. 1067 
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 
FEBRUARY 6, 2025 
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 house-
hold and dependent care credit, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Lowering Infant and 
Toddler Tuition for Learning and Education Act of 2025’’ 
or the ‘‘LITTLE Act of 2025’’. 
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SEC. 2. CHILDCARE PROVIDER STARTUP CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45BB. CHILDCARE PROVIDER STARTUP CREDIT. 
‘‘(a) ALLOWANCE
OF CREDIT.—In the case of a 
qualified taxpayer, there shall be allowed as a credit 
against the tax imposed by this subtitle an amount equal 
to 30 percent of the qualified childcare startup expenses 
of the taxpayer for the taxable year. 
‘‘(b) QUALIFIED TAXPAYER.—For purposes of this 
section, the term ‘qualified taxpayer’ means, with respect 
to a taxable year, a taxpayer that— 
‘‘(1) provides childcare services in compliance 
with any applicable State or local requirements for 
such services, and 
‘‘(2) provided such services to 2 or more chil-
dren for a significant portion of the taxable year. 
‘‘(c) QUALIFIED CHILDCARE STARTUP EXPENSES.— 
For purposes of this section, the term ‘qualified childcare 
startup expenses’ means, with respect to a taxable year, 
a start-up expenditure (as defined in section 195(c)(1)) 
paid or incurred during the 2-year period ending on the 
last day of such taxable year to establish and operate a 
childcare service. 
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‘‘(d) LIMITATION.—The aggregate amount of credits 
determined under subsection (a) for any taxpayer in all 
taxable years may not exceed $10,000. 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—No credit shall 
be allowed under subsection (a) for any expense for which 
a deduction or credit is allowed under any other provision 
of this chapter.’’. 
(b) CREDIT ALLOWED S PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) is amended by striking 
‘‘plus’’ at the end of paragraph (40), by striking the period 
at the end of paragraph (41) and inserting ‘‘, plus’’, and 
by adding at the end the following new paragraph: 
‘‘(42) the childcare provider startup credit de-
termined under section 45BB(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by in-
serting after the item relating to section 36B the following 
new item: 
‘‘Sec. 45BB. Childcare provider startup credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenses paid or incurred after 
the date of the enactment of this Act. 
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SEC. 3. HOUSEHOLD AND DEPENDENT CARE CREDIT IN-
CREASED AND MADE REFUNDABLE. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amending by inserting after section 36B the fol-
lowing new section: 
‘‘SEC. 36C. EXPENSES FOR HOUSEHOLD AND DEPENDENT 
CARE SERVICES NECESSARY FOR GAINFUL 
EMPLOYMENT. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
for which there are 1 or more qualifying individuals 
with respect to such individual, there shall be al-
lowed as a credit against the tax imposed by this 
chapter for the taxable year an amount equal to the 
applicable percentage of the employment-related ex-
penses paid by such individual during the taxable 
year. 
‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For 
purposes of paragraph (1), the term ‘applicable per-
centage’ means 50 percent reduced (but not below 
35 percent) by 1 percentage point for each $2,000 
(or fraction thereof) by which the taxpayer’s ad-
justed gross income for the taxable year exceeds 
$15,000. 
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‘‘(b) DEFINITIONS OF QUALIFYING INDIVIDUAL AND 
EMPLOYMENT-RELATED EXPENSES.—For purposes of 
this section— 
‘‘(1) 
QUALIFYING
INDIVIDUAL.—The 
term 
‘qualifying individual’ means— 
‘‘(A) a dependent of the taxpayer (as de-
fined in section 152(a)(1)) who has not attained 
age 13, 
‘‘(B) a dependent of the taxpayer (as de-
fined in section 152, determined without regard 
to subsections (b)(1), (b)(2), and (d)(1)(B)) 
who is physically or mentally incapable of car-
ing for himself or herself and who has the same 
principal place of abode as the taxpayer for 
more than one-half of such taxable year, or 
‘‘(C) the spouse of the taxpayer, if the 
spouse is physically or mentally incapable of 
caring for himself or herself and who has the 
same principal place of abode as the taxpayer 
for more than one-half of such taxable year. 
‘‘(2) EMPLOYMENT-RELATED EXPENSES.— 
‘‘(A) IN
GENERAL.—The term ‘employ-
ment-related expenses’ means amounts paid for 
the following expenses, but only if such ex-
penses are incurred to enable the taxpayer to be 
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vided outside the taxpayer’s household by a de-
pendent care center (as defined in subpara-
graph (D)) shall be taken into account only if— 
‘‘(i) such center complies with all ap-
plicable laws and regulations of a State or 
unit of local government, and 
‘‘(ii) the requirements of subpara-
graph (B) are met. 
‘‘(D) DEPENDENT
CARE
CENTER
DE-
FINED.—For purposes of this paragraph, the 
term ‘dependent care center’ means any facility 
which— 
‘‘(i) provides care for more than six 
individuals (other than individuals who re-
side at the facility), and 
‘‘(ii) receives a fee, payment, or grant 
for providing services for any of the indi-
viduals (regardless of whether such facility 
is operated for profit). 
‘‘(c) DOLLAR LIMIT ON AMOUNT CREDITABLE.—The 
amount of the employment-related expenses incurred dur-
ing any taxable year which may be taken into account 
under subsection (a) shall not exceed— 
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‘‘(1) $7,500 if there is 1 qualifying individual 
with respect to the taxpayer for such taxable year, 
or 
‘‘(2) $15,000 if there are 2 or more qualifying 
individuals with respect to the taxpayer for such tax-
able year. 
The amount determined under paragraph (1) or (2) 
(whichever is applicable) shall be reduced by the aggregate 
amount excludable from gross income under section 129 
for the taxable year. 
‘‘(d) EARNED INCOME LIMITATION.— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the amount of the employ-
ment-related expenses incurred during any taxable 
year which may be taken into account under sub-
section (a) shall not exceed— 
‘‘(A) in the case of an individual who is 
not married at the close of such year, such indi-
vidual’s earned income for such year, or 
‘‘(B) in the case of an individual who is 
married at the close of such year, the lesser of 
such individual’s earned income or the earned 
income of his spouse for such year. 
‘‘(2) SPECIAL
RULE
FOR
SPOUSE
WHO
IS
A 
STUDENT
OR
INCAPABLE
OF
CARING
FOR
HIM-
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SELF.—In the case of a spouse who is a student or 
a qualifying individual described in subsection 
(b)(1)(C), for purposes of paragraph (1), such 
spouse shall be deemed for each month during which 
such spouse is a full-time student at an educational 
institution, or is such a qualifying individual, to be 
gainfully employed and to have earned income of not 
less than— 
‘‘(A) $250 if subsection (c)(1) applies for 
the taxable year, or 
‘‘(B) $500 if subsection (c)(2) applies for 
the taxable year. 
‘‘(e) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after 2024, the dollar amounts in 
this section shall be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2023’ for 
‘calendar year 2016’ in subparagraph (A)(ii). 
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‘‘(2) ROUNDING.—If any increase under para-
graph (1) is not a multiple of $10, such increase 
shall be rounded to the nearest multiple of $10. 
‘‘(f) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) PLACE
OF
ABODE.—An individual shall 
not be treated as having the same principal place of 
abode of the taxpayer if at any time during the tax-
able year of the taxpayer the relationship between 
the individual and the taxpayer is in violation of 
local law. 
‘‘(2) MARRIED COUPLES MUST FILE JOINT RE-
TURN.—If the taxpayer is married at the close of 
the taxable year, the credit shall be allowed under 
subsection (a) only if the taxpayer and his spouse 
file a joint return for the taxable year. 
‘‘(3) MARITAL STATUS.—An individual legally 
separated from his spouse under a decree of divorce 
or of separate maintenance shall not be considered 
as married. 
‘‘(4) CERTAIN
MARRIED
INDIVIDUALS
LIVING 
APART.—If— 
‘‘(A) an individual who is married and who 
files a separate return— 
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‘‘(i) maintains as his home a house-
hold which constitutes for more than one- 
half of the taxable year the principal place 
of abode of a qualifying individual, and 
‘‘(ii) furnishes over half of the cost of 
maintaining such household during the 
taxable year, and 
‘‘(B) during the last 6 months of such tax-
able year such individual’s spouse is not a mem-
ber of such household, 
such individual shall not be considered as married. 
‘‘(5) SPECIAL DEPENDENCY TEST IN CASE OF 
DIVORCED PARENTS, ETC.—If— 
‘‘(A) section 152(e) applies to any child 
with respect to any calendar year, and 
‘‘(B) such child is under the age of 13 or 
is physically or mentally incapable of caring for 
himself, 
in the case of any taxable year beginning in such 
calendar year, such child shall be treated as a quali-
fying individual described in subparagraph (A) or 
(B) of subsection (b)(1) (whichever is appropriate) 
with respect to the custodial parent (as defined in 
section 152(e)(4)(A)), and shall not be treated as a 
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qualifying individual with respect to the noncustodial 
parent. 
‘‘(6) PAYMENTS TO RELATED INDIVIDUALS.— 
No credit shall be allowed under subsection (a) for 
any amount paid by the taxpayer to an individual— 
‘‘(A) with respect to whom, for the taxable 
year, a deduction under section 151(c) (relating 
to deduction for personal exemptions for de-
pendents) is allowable either to the taxpayer or 
his spouse, or 
‘‘(B) who is a child of the taxpayer (within 
the meaning of section 152(f)(1)) who has not 
attained the age of 19 at the close of the tax-
able year. 
For purposes of this paragraph, the term ‘taxable 
year’ means the taxable year of the taxpayer in 
which the service is performed. 
‘‘(7) STUDENT.—The term ‘student’ means an 
individual who during each of 5 calendar months 
during the taxable year is a full-time student at an 
educational organization. 
‘‘(8) EDUCATIONAL ORGANIZATION.—The term 
‘educational organization’ means an educational or-
ganization described in section 170(b)(1)(A)(ii). 
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‘‘(g) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out the purposes of this section.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1324(b) of title 31, United States 
Code, is amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 
(2) Subpart A of part IV of subchapter A of 
chapter 1 of such Code is amended by repealing sec-
tion 21 and by striking the item relating to such sec-
tion in the table of sections for such subpart. 
(3) Section 45F(C)(1)(A)(iv) of such Code, as 
added by this Act, is amended by striking ‘‘section 
21(b)(1)(A)’’ and inserting ‘‘section 36C(b)(1)(A)’’. 
(4) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 of such Code is 
amended by striking the item relating to section 21. 
(5) Section 6211(b)(4)(A) of such Code is 
amended by striking ‘‘21 by reason of subsection (g) 
thereof,’’. 
(6) Section 6213(g)(2) of such Code is amend-
ed— 
(A) in subparagraph (H), by striking ‘‘sec-
tion 21’’ and inserting ‘‘section 36C’’, and 
(B) in subparagraph (L)— 
(i) by striking ‘‘21,’’, and 
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(ii) by inserting ‘‘36C,’’ after ‘‘32,’’. 
(7) The following sections of such Code are 
each amended by striking ‘‘section 21(e)’’ and in-
serting ‘‘section 36C(e)’’. 
(A) Section 23(f)(1). 
(B) Section 35(g)(6). 
(C) Section 129(a)(2)(C), as amended by 
this Act. 
(8) Section 129 of such Code is further amend-
ed— 
(A) in subsection (b)(2), by striking ‘‘sec-
tion 
21(d)(2)’’ 
and 
inserting 
‘‘section 
36C(d)(2)’’, and 
(B) in subsection (e)(1), by striking ‘‘sec-
tion 
21(b)(2)’’ 
and 
inserting 
‘‘section 
36C(b)(2)’’. 
(9) Section 213(e) of such Code is amended by 
striking ‘‘section 21’’ and inserting ‘‘section 36C’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart C of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
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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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this section. 
Æ 
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