The State’s child-care credit plays an essential role in supporting working parents and caregivers, helping make early childhood care and dependent care more affordable, and by extension, helping California’s workforce remain stable. In the OBBB, the refundable part of the Child Tax Credit remains limited: while the maximum increased, the bill did not restore the large refundable expansions seen under the pandemic-era credits. For some low-income families who previously struggled to receive help from non-refundable credits (because they owe little or no income tax), the gain may be modest, depending on other tax circumstances. The expanded child-care credits do not directly reduce childcare service costs; instead, they reduce a family’s tax liability or allow pretax savings (via FSAs) or employer assistance. So, childcare remains expensive, and tax credits only go so far. And because the credit is non-refundable and phases out at modest income levels, many low- and moderate-income families, especially those with little or no state income tax liability, may receive limited or no benefit.
Many Residents are leaving San Diego because they cannot afford to live here anymore, and they are not having children because they simply cannot afford daycare for them.
I will commit to working across the aisle and focus on a more actionable plan for replacing the One Big Beautiful Bill Act (OBBBA) child-care provisions with something better, one that centers equity, affordability, provider stability, and long-term workforce outcomes. I will start with the factual baseline (what OBBBA changed), then give concrete policy replacements, funding/offset options, and a legislative/advocacy playbook that all Americans can benefit from. Given the rising costs of childcare in California and the critical importance of affordable caregiving to working families, consideration should be given to making the childcare credit refundable and/or increasing the income thresholds for eligibility. Doing so would better support low- and middle-income households, help reduce economic hardship for families with young children or dependents, and promote workforce participation.
