Hamilton child and dependent care tax credit voted down by House Republicans

INDIANAPOLIS – State Representative Carey Hamilton (D-Indianapolis) today introduced a proposal that would create a child and dependent care tax credit to support working families across the state.

The amendment to Senate Bill 408 was defeated by a vote of 31-61, along party lines.  

“Today, in Indiana, we have a crisis of hard working families struggling to get by, and we have a workforce shortage that is hurting our state's economy,” said Hamilton. “My proposal would address both of those challenges.

“A recent study showed that the lack of access to child care costs our state $1.1 billion lost in economic activity every year. These costs hurt working families and they hurt our workforce.

“It's time for us to help working families thrive,” continued Hamilton. “It's time to reduce the burden of child and dependent care costs on our workforce. It's time to pass a child and dependent care tax credit.”

A federal child and dependent care tax credit already exists, but this amendment would create a statewide version for both single and married parents. The proposed statewide credit would work from the following scale:

• If the family makes $40,000 or less, they get 100 percent of the federal credit applied to their Indiana return.
• If the family makes between $40,000 and $60,000, they get 75 percent of the federal credit applied to their Indiana return.
• If the family makes between $60,000 and $80,000, they get 50 percent of the federal credit applied to their Indiana return.
• If the family makes between $80,000 and $100,000, they get 25 percent of the federal credit applied to their Indiana return.

A child and dependent care tax credit would help approximately 80,000 working families across the state. The Indiana Chamber of Commerce, AARP Indiana, Citizens Action Coalition and the Indiana Institute for Working Families support this proposal. More than half of states offer a child and dependent care tax credit to give working families some relief. Our neighbors in Kentucky and Ohio both offer credits.

This is the second time that Hamilton has introduced a child and dependent care tax credit proposal. In 2019, she offered House Bill 1288, which never got a hearing in committee.