Tax credit aims to raise child care worker wages—quietly.
H.R. 8023 — To amend the Internal Revenue Code of 1986 to provide a credit for increasing wages paid to child care providers. · Filed by Linda Sánchez (D-CA) · 2 cosponsors · Introduced Mar 19, 2026 · Referred to committee
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What it does
This bill creates a federal tax credit for employers who increase wages paid to child care workers. Employers can claim a credit equal to 5% (or 7% in rural areas) of the wage increase they give to child care staff, up to the amount of the increase itself. The credit only applies if an employer's average hourly wage for child care workers actually goes up year-over-year.
Why we flagged it
The bill's sole functional purpose is to create a tax credit mechanism that incentivizes employers to raise wages for child care workers. It is a targeted labor-market intervention, not a broad tax relief or deregulatory measure.
What the text implies
- The credit is capped at the year-over-year wage increase, meaning employers cannot claim credit on baseline wages—only on new raises. This limits total cost but also means the incentive weakens if wage growth stalls.
- No minimum wage floor is specified; employers could claim credit for raising wages from $10/hr to $10.50/hr, which may not meaningfully improve worker living standards despite the tax benefit.
The full analysis lists 5 implications of this text.
Who stands to gain
child care employers and facility operators; employers with child care workers on payroll