WASHINGTON, D.C. – Recently, Senator Jim Justice (R-WV) and Senator Mark Warner (D-VA) introduced S.3534, the Child Care Supply Tax Credit Act of 2025, to address the nationwide childcare shortage and increase childcare supply for families across the country:
“Childcare providers simply can’t afford to pay their workers enough without passing those high costs on to parents. Families in West Virginia and across the country are spending thousands of dollars just to secure reliable childcare – it must be addressed. By creating a targeted tax credit tied directly to caregiver wages, we can pay the people who take care of our kids what they deserve while giving our hard-working families some breathing room,” said Senator Jim Justice.
“From health care premiums to groceries to utility bills, life is only getting more and more expensive for American families, and for many, the math simply doesn’t work without affordable child care. Child care is the foundation that allows parents to earn a living while providing kids with the head start they deserve. I’m proud to introduce this bipartisan legislation to address the workforce challenges contributing to our nation’s child care crisis,” said Senator Mark Warner.
BACKGROUND:
- Childcare providers operate on razor-thin margins; therefore, they typically can’t pay their workers well. But families can only afford to pay so much for childcare, meaning providers can’t raise their prices to offer competitive wages. Poor pay leads to high turnover, difficulty attracting qualified staff, centers operating below licensed capacity, and even facilities permanently closing—only adding to the childcare shortage. In West Virginia alone, families need an additional 20,000 childcare spots.
- The Child Care Supply Tax Credit Act of 2025 creates a new tax credit for eligible childcare providers to help offset the cost of employee wages, allowing providers to increase worker wages, retain talent, and increase childcare supply.
- The general business tax credit is equal to five percent of their childcare worker base wage—meaning all wages paid to employees that provide direct care to children. In rural regions—practically all of West Virginia—centers would be eligible to receive a tax credit worth seven percent.
- The bill allows the credit to be paid directly to nonprofit providers, like churches, and in-home daycares.
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