Trump-O-Meter

Create targeted child care tax credits

"The Trump plan will rewrite the tax code to allow working parents to deduct from their income taxes child care expenses for up to four children and elderly dependents."


Updates

Oumou Balde, 4, left, plays with her teacher, Jacqualine Sanchez, right, and some pretend food in a pre-kindergarten class at the Sheltering Arms Learning Center in New York in a program to educate children about nutrition and health. (Associated Press)
Oumou Balde, 4, left, plays with her teacher, Jacqualine Sanchez, right, and some pretend food in a pre-kindergarten class at the Sheltering Arms Learning Center in New York in a program to educate children about nutrition and health. (Associated Press)

Trump’s child care promise takes new approach in tax framework

As part of a plan to help families afford child care expenses, President Donald Trump campaigned on expanding assistance for parents paying for the care of others in their household.

"For many families in our country, child care is now the single largest expense — even more than housing," Trump said at a September 2016 campaign speech in Aston, Pa. "Yet, very little meaningful policy work has been done in this area ...There is no financial security."

One portion of Trump's Child Care Plan proposed allowing working parents to deduct from their taxes child care expenses for up to four children and elderly dependents. The deduction would not extend beyond the "average cost of care" for the parent's state of residence and would not apply to a person making more than $250,000 per year. The plan also suggested offering child care spending rebates through the Earned Income Tax Credit, which is a benefit for low- to moderate-income earners.

The framework for the Trump administration's proposed tax legislation, released on Sept. 27, takes a different approach.

Instead of basing deductions and tax credits on child care costs, the framework proposes increasing the Child Tax Credit from the current amount of $1,000 and raising the current income threshold for which the credit phases out. The plan does not specify how much the credit would increase or which incomes level would qualify.

The framework also creates a new $500 credit for non-child dependents such as the elderly or disabled.

Those expanded credits could certainly help taxpayers afford their child care costs, but no part of the framework bases deductions or credits on child care expenses, as Trump had initially proposed. Furthermore, the framework does not include any changes to the Earned Income Tax Credit.

Trump's initial plan to help parents offset the cost of child care based on expenses incurred hasn't made its way into the current tax policy plan. But the framework at least expands the Child Tax Credit and includes a new credit aimed at helping people afford caring for dependents. Since at least some action has been taken on this promise, for now we'll rate it In the Works.

Sources:

U.S. Treasury Department, 2017 tax code framework, Sept. 27, 2017

Donald Trump presidential campaign, "Proposals Contained In Mr. Trump Child Care Plan," accessed Oct. 4, 2017

Factba.se, "Speech: Donald Trump in Aston, Pa. - September 13, 2016," accessed Oct. 4, 2017

Turbotax, "7 Requirements for the Child Tax Credit," updated for tax year 2016

Email interview with Patrick Newton, press secretary for the Committee for a Responsible Federal Budget, Oct. 2, 2017