The "Respect Parents' Childcare Choices Act" reauthorizes the Child Care and Development Block Grant Act of 1990 (CCDBGA) for fiscal years 2026 through 2031, allocating $14 billion annually for child care services. This legislation aims to enhance parental choice in child care and streamline access to various care options. It also introduces significant changes to how child care assistance is delivered and regulated.

A core provision mandates that states offer child care certificates to parents of eligible children, which will be the sole mechanism for providing direct services under the program. These certificates can be used for payments to providers, deposits, or even as disbursements to married parents who act as relative caregivers for their own children. Importantly, the bill clarifies that these certificates are not considered grants or contracts, and can be used for services provided by religious child care providers, including for religious purposes, if chosen by the parent.

The bill significantly expands support for relative caregivers, such as grandparents, adult siblings, aunts, and uncles, by exempting them from certain state licensing and health and safety requirements that apply to other providers. States are required to notify parents about the option to use certificates for relative care and to regularly review and remove burdensome regulations on these caregivers. Furthermore, the bill mandates that payment rates for relative caregivers be at least 75 percent of the rate for family child care providers.

Eligibility criteria are updated, including a new $1,000,000 family asset limit and provisions to continue assistance for at least six months if an unmarried parent marries and their income rises. The percentage of funds states must use for direct services via certificates is increased from 70% to 90%. To ensure program integrity, a $50 million pilot program is established to prevent fraud, verify eligibility, and recover improper payments, specifically focusing on verifying relationships for relative caregivers.

The legislation strengthens protections for religious child care providers, changing all references from "sectarian" to "religious" and ensuring states do not impose disproportionate burdens or interfere with their religious character. It explicitly allows religious providers to retain religious names, symbols, and make employment decisions based on religious tenets, affirming that existing religious exemptions are not waived. Finally, the bill repeals the Child and Dependent Care Tax Credit (Section 21 of the Internal Revenue Code of 1986), effective for taxable years beginning after the act's enactment.