LITTLE Act of 2025

The LITTLE Act of 2025 creates a tax credit for childcare providers and expands tax relief for families with childcare costs. It provides a 30% credit (capped at $10,000 lifetime) for childcare businesses to cover startup expenses like facility setup, if they serve at least two children and comply with state regulations. For families, it increases the dependent care credit to 50% of eligible childcare expenses (adjusted for income) up to $7,500 for one child or $15,000 for two or more children, and makes the credit refundable. These changes apply to taxable years beginning after enactment, directly affecting childcare businesses and families with young children or dependents requiring care.