Obama proposes economic help for middle class

The child-care tax credit now starts at 35 percent of child-care costs for the poorest families and drops to 20 percent of costs for families earning $43,000 or more. The proposal calls for a credit of 35 percent of child-care costs for all families earning as much as $85,000, with the share declining above that income level. The White House estimates that this would reduce taxes by $900 for a typical family with $80,000 in income.

Analysis: This expansion would help many families closer to the $85,000 threshold but would not help the many families lower on the income ladder who pay no federal income taxes, because the credit is nonrefundable. The White House is seeking to help lower-income families by expanding federally subsidized child-care programs by more than 200,000 slots.