Human Services News

National Women's Law Center

Families in 23 states this tax season were eligible for some increased tax assistance in meeting the high costs of child and dependent care, thanks to improvements in these states' child and dependent care tax provisions over the past four years.

This was among the findings in a quadrennial, state-by-state report card released today by the National Women's Law Center.

Nevertheless, there is still vast room for improvement, the report card reveals, with most state tax provisions receiving grades of C+ to F. The report card ranks 31 tax provisions in 27 states based on the tax assistance they provide to working families that must pay for costly child and dependent care to be gainfully employed.

The report card is a companion piece to Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions, an NWLC report that outlines ways in which state policymakers and advocates can develop the best tax policies for families with child and dependent care expenses.

"While many states have improved the tax assistance that they provide to families struggling to pay for child and dependent care since NWLC's last report card, most are still failing to make top marks," said Nancy Duff Campbell, Co-President of the National Women's Law Center, and lead author of the report.

"States can and should do more to help families who must pay for child and dependent care in order to work with the high costs of care.

We hope this report and report card stimulate more improvements."

The report card puts New York's child and dependent care credit and Oregon's Working Family Child Care Credit at the top of the class with grades of A-.

New York, which also got the top grade of A- four years ago, offers a credit worth up to $2,310---more than the federal child and dependent care credit.

New York's credit also is fully refundable for residents, which enables low-income families with limited state tax liability to take full advantage of its benefits.

Oregon's well-designed Working Family Child Care Credit improved from a B four years ago to an A-, in large part because it is now refundable.

Now, Louisiana families may claim a refundable credit for their child care expenses of up to $1,050, as well as a credit for dependent care expenses of up to $2,100.

Fourteen states received failing grades because they assess personal income taxes but offer no employment-related child or dependent care tax provisions.