March 07, 2021

Child care access and affordability are formidable challenges for many Iowan families

Several pieces of legislation will bring needed relief for these families are on the debate calendar in the House chamber for the week of Feb. 8.

HF 230 Child and Dependent Care Tax Credit

This bill raises the income level for phase out of the Child and Dependent Care Tax Credit. There are both federal and state child care tax credits. Iowa’s Child and Dependent Care Tax Credit is based off of the federal credit and phases down as income increases. Currently, the state credit fully phases out for those with income over $45,000. Iowa also offers an Early Childhood Development Tax Credit for school/development expenses on activities outside the home. HF 230 extends the phase out of the Child and Dependent Care Tax Credit and the Early Childhood Tax Credit from $45,000 to $90,000. Effectively, this makes the state tax credit 30 percent of the federal credit for any taxpayer with a net income of $90,000 instead of the current law of $45,000

HF 292 Child Care Assistance Program

This legislation sets the floor of reimbursement rates for child care providers. The bill also directs the Department of Human Services (DHS) to adjust the Quality Rating System (QRS) to keep the incentive for providers to participate. Participation in the QRS is voluntary; providers receive achievement bonuses that increase as they move through the levels between 1 and 5 stars based on meeting certain standards. It’s likely that enough federal funds will cover the increase in spending on the program in fiscal years 2022 and 2023.

HF 302 CCA Phase Out Program

This bill attempts to reduce the frustrating “cliff effect” that sometimes happens when the offer of a higher paying job would eliminate all Child Care Assistance (CCA). CCA is an income-based program that provides a subsidy to the child care provider to help cover the costs of child care for eligible families who 1) work or go to school for a combined 28 hours a week, and 2) make less than 145 percent of the federal poverty level ($31,494 for a family of 3). HF 302 would create a new state-funded graduated eligibility phase-out program. If a family was previously eligible for CCA and their income is at least 225 percent but less than 250 percent of the federal poverty program (higher for special needs care) they would qualify for this new program. The eligibility phase-out program would be implemented no later than July 1, 2022.

Another piece of legislation on the House debate calendar this week addresses the cost of prescription insulin.

HF263 caps the cost of insulin to $100 for a 31-day supply. The bill would apply to at least one type of rapid-acting, short-acting, intermediate-acting and long-acting prescription insulin drugs. Most insurance plans and third-party payors would be required to adhere to the $100 cap but not Medicaid, Medicare or the Farm Bureau plans not covered by the Affordable Care Act (ACA).