Representative Gerry Connolly

Rep. Connolly at the Main Street Child Development Center

Dear Neighbor,

The American Rescue Plan is putting shots in arms, money in pockets, children in schools, and people in jobs across the country. But we need to ensure that we are doing everything we can to build back better and create a more equal future as we emerge from this pandemic.

One that ensures children aren’t starting at a disadvantage, that families and parents do not endure financial hardship, and that teachers and childcare workers are fairly compensated.

Parents and caregivers cannot go back to work, grow our economy, and build better lives for their families unless they know their children, parents, and loved ones are safe and cared for.

Investing in caregiving will help get Americans back to work, create good-paying jobs, raise wages, boost lifetime earnings, support small businesses, and grow our economy for all Americans.

The state of our childcare system was already dire even before the pandemic. Median wages for childcare workers are below the poverty line and half of families have limited or no access to childcare. By the end of 2020, a quarter of childcare centers had closed, and we are at risk of permanently losing 4.5 million childcare slots for children across the country.

Recently, I had the opportunity to host a roundtable with Main Street Child Development Center, Fairfax Mayor David Meyer, Councilmember Janice Miller, and many stakeholders within the childcare services industry across my district. Main Street Child Development Center is an example of a facility located here in our district, that was able to stay in business and maintain ALL of their employees due to the federal government’s intervention that provided them with CARES Act funding. But more needs to be done.

COVID-19 has greatly affected childcare providers and educators, a workforce that is disproportionately made up of women of color. This economic disparity will only further drive a wedge between racial wealth gaps. The investments we make now will create a better early education and childcare system. That’s what the American Rescue Plan has already started to do.

American Rescue Plan:

Provided $39 billion to help states stabilize the childcare system and enabled childcare providers to reopen safely, keep workers on payroll, and lower costs for hardworking families.
Increased the Child Tax Credit (CTC) from $2,000 per child to $3,000 per child for 6-years old and above and $3,600 per child for children under 6.
- The expanded CTC in the American Rescue Plan benefited nearly 66 million children and was the single largest contributor to the plan’s historic reductions in child poverty.
Dependent Care Tax Credit
- Families will get back as a tax credit as much as half of their yearly spending on childcare for children under age 13, so that they can receive a total of up to $4,000 for one child or $8,000 for two or more children.
- The percentage phases down for taxpayers earning between $125,000 and $400,000 in gross income. Previously, the phase-out started at only $15,000.
Dependent Care FSA Limits
- For 2021 only, the dependent care contribution limit for qualifying dependent care expenses is increased from $5,000 to $10,500 for individuals or married couples filing jointly.

Who Qualifies for the Child Tax Credit Advance Monthly Payments?

Families will qualify for a full credit if their income is below $75,000 for single filers, $112,000 for people filing as head of household, or $150,000 for people who are married and filing jointly.
To be eligible, children must:
- Have a Social Security number,
- Live with you for at least half of the year,
- Be under age 18 as of December 31, 2021, and
- Be claimed on your tax return.
Children are eligible if they are your children, adopted children, stepchildren, half-siblings, foster children, grandchildren, nieces or nephews, or certain other relatives. The adult filing taxes must have a Social Security Number or an Individual Taxpayer Identification Number.

This expanded tax credit would significantly ease the burden of childcare costs for many Virginia families – many of whom pay, on average, more than $14,000 annually for infant care and nearly $11,000 for toddler care. It is the biggest anti-poverty initiative since President Johnson’s War on Poverty in the 1960s. This is how we build back better and create a more equal United States of America for us all.

Please continue to take care of yourselves and each other. As always, my office stands ready to help if you or a loved one need assistance. Please don't hesitate to call us at (703) 256-3071, or visit my website here.

Sincerely,

Gerald E. Connolly
Member of Congress