An Updated Measure of Poverty (Re)Drawing the Line (2023) / Chapter Skim
Currently Skimming:
4 Challenging Categories: Childcare
4 Challenging Categories: Childcare
Pages 59-66
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From page 59... ...
Additionally, in recent years, the Child and Dependent Care Tax Credit -- a nonrefundable tax credit that reduces federal income tax liability based on child- and dependent-care expenses incurred by taxpayers who work or are looking for work -- provided about $4 billion in annual support for low- and middle-income families (Congressional Research Service, 2021)
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From page 60... ...
Some parents meet that need by purchasing childcare in the market, some use fully or partially subsidized care, some rely on unpaid care provided by friends or family members, some provide care themselves, and of course many use a mix of modes or switch modes over time. Ideally, PPM thresholds in the future would include a childcare need for all households with children in a way that parallels the treatment of food, shelter, utilities, and (in the panel's proposal)
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From page 61... ...
Defining a childcare need and assigning the appropriate dollar amount to meet that need is complex, as it is for medical care need, and research on the former is at an early stage. For this reason, additional research is needed to build consensus on the conceptual issues and to develop practical methods for implementation, as has been done for medical care.
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From page 62... ...
Thus, the calculation of resources should include the value of childcare subsidies and childcare tax credits received by households. Here, too, the panel recommends an incremental approach, starting with households that use paid childcare before ultimately including all households with children.
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From page 63... ...
4.3.3. Long-Term Changes to Address Unpaid Childcare Moving beyond market childcare, the calculation of household resources would ideally include -- in addition to childcare subsidies and tax credits -- the value of unpaid childcare, just as the threshold would ideally include the need for childcare for all households with children, regardless of whether they use paid care.
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From page 64... ...
, further research is needed to probe the conceptual issues and to explore potential approaches to including childcare in the resource calculations for households with children that do not use paid care or that use a mix of paid and unpaid care. One possible approach to be explored by the Census Bureau for valuing unpaid childcare, for example by parents, family, or friends, would be to assume that the value of the care is equal to the need level established in the threshold.
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From page 65... ...
On the resource side, the household would receive credit for the imputed value of any childcare subsidy or tax credit reported, as well as the value of any unpaid care received from friends or family or that the household itself provides, valued at the CCDF reimbursement rate for in-home childcare for a child of the given age in that geographic area. Clearly, moving toward such an ideal measure of childcare will require considerable future research.
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