The "Promoting Affordable Childcare for Everyone Act" (PACE Act) seeks to significantly improve financial assistance for families with dependent care expenses. A primary provision of the bill is to make the Child and Dependent Care Tax Credit (CDCTC) fully refundable , allowing low-income families to benefit even if they owe no federal income tax. This change involves redesignating the credit and moving it to a section for refundable credits, effective for taxable years beginning after December 31, 2025. Furthermore, the bill enhances the CDCTC by increasing the maximum credit rate from 35% (minimum 20%) to 50% (minimum 35%) of eligible expenses. It also introduces an inflation adjustment for the credit's dollar amounts, ensuring its value keeps pace with rising costs. These enhancements are also effective for taxable years beginning after December 31, 2025. Finally, the legislation addresses employer-provided benefits by increasing the maximum amount excludable from gross income for dependent care assistance from $5,000 to $7,500. This exclusion will also be subject to an inflation adjustment starting in 2026, providing greater tax relief for employees utilizing these benefits. All changes aim to make dependent care more affordable for working families.