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Committee advances bill to double Delaware's state match for child-care tax credit
Summary
The House Revenue and Finance Committee released House Substitute 1 for HB 274, which would raise Delaware's match of the federal child and dependent care tax credit from 50% to 100%, expanding state tax relief for qualifying working families. The bill will move to appropriations for fiscal review.
A House Revenue and Finance Committee advanced House Substitute 1 for House Bill 274, a proposal that would increase Delaware’s state match of the federal child and dependent care tax credit from 50% to 100%, effectively doubling the state portion of the benefit for qualifying taxpayers.
The sponsor said the substitute adds a clear effective date aligned with the tax year to simplify administration and noted the bill is not refundable now because of fiscal constraints. “You can’t work if you can’t afford care,” the sponsor said, arguing the change would return more money to working families and support workforce participation.
Rebecca Goldsmith, Deputy Secretary of Finance, told the committee the current structure follows the federal credit’s eligibility and phaseout rules and that the state is spending roughly $6.4 million on the existing credit. Goldsmith said recent federal changes for tax year 2026 are likely to increase state costs by an estimated $2.7 million to $3.0 million and that the sponsor’s full state match would add on the order of another $6.4 million in state costs. Goldsmith cautioned that individual household benefits depend on taxpayers’ federal liability and interactions with subsidies.
Public commenters and stakeholders urged the committee to support the measure. Sydney Grossnickle of the Delaware Farm Bureau said rural and agricultural families face irregular hours and limited local care options, and that doubling the state match would help farm households remain in the workforce.
The committee voted to release House Substitute 1 for HB 274. The motion to release was made by Representative Johnson and seconded by Vice Chair Carson; the chair called the roll and the motion carried. Committee members noted the bill is not part of the governor’s recommendation and will require appropriations review for funding.
Next steps: HB 274 will be referred to the Appropriations Committee for fiscal review and potential funding options.
