This bill significantly enhances the existing Child and Dependent Care Tax Credit by increasing the maximum amount of expenses eligible for the credit. For one qualifying individual, the limit rises to $8,000 , and for two or more, it increases to $16,000 . The bill also adjusts the applicable percentage, starting at 50% and phasing down for taxpayers with adjusted gross incomes exceeding $125,000 , with a minimum credit percentage of 20% for incomes up to $400,000 . A key provision makes the credit fully refundable for taxpayers who reside in the United States for more than half the year, ensuring that even those with no tax liability can benefit. Furthermore, the bill introduces an inflation adjustment mechanism, indexing the $125,000 income threshold and the maximum creditable expense amounts to account for cost-of-living increases starting after 2025. These amendments, which also include specific rules for married couples filing separately, will apply to taxable years beginning after December 31, 2024.