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Employer Child Care Tax Credits are Ineffective at All Levels

Affordable, high-quality child care is fundamental for working families—but it is out of reach for far too many. In considering tax strategies to help families meet the high costs of care, policymakers have recently shown renewed interest in expanding tax credits that incentivize businesses to invest in child care for their employees. However, research demonstrates that, at both the federal and state level, such tax credits are underutilized. In fact, over time, numerous states that have enacted employer tax credits have abandoned them. Rather than pursing these failed policies, policymakers should instead invest in strategies proven to meet the child care needs of working families.