US SB1421

Increases the maximum creditable child and dependent care expenses from $3,000 to $8,000 for one qualifying individual and from $6,000 to $16,000 for two or more qualifying individuals

Raises the applicable credit percentage from 35% to 50% for taxpayers with adjusted gross income up to $125,000, with the percentage gradually reducing for higher incomes

Makes the credit fully refundable for taxpayers who have a principal place of abode in the United States for more than half the taxable year, allowing those with little or no tax liability to receive the full credit amount

Adds annual inflation adjustments for the income thresholds and dollar limits beginning in calendar year 2026, rounded to the nearest $100

Applies to taxable years beginning after December 31, 2024