Two U.S. senators are trying to ease the financial burden of childcare on families with legislation that would revamp the Child and Dependent Care Tax Credit. The tax break seems more than a bit out of date

Under current tax law, many parents can get a tax credit for a portion of their child care costs. The problem is the portion is capped at $3,000. As MomsRising points out today, who pays $3,000 a year for good child care?

“The truth is that in most communities, the cost of child care breaks the family budget. In New York, for example, the average annual price of care in a center for two young children is more than single parents earn on average in a year. Now how is that supposed to add up for families?” Donna writes in a MomsRising blog post “Hey Congress, Tell us where we can find child care for $3,000 a year?”

It doesn’t matter if you are poor, middle class or in a higher income bracket, if you are a working parent you know child care costs a lot more than $3,000. In fact, care of an infant runs as high as $14,951 a year, according to the report “Parents and the High Price of Child Care: 2008 Update.” And Washington state ranks third on the list of least affordable states, with the annual cost of center care for an infant averaging $12,000.

To help parents, the bill would increase the child care expenses cap to $5,000 for one child and $10,000 for two or more children and expand provisions for employer-provided dependent care benefits, according to an analysis by the National Women’s Law Center.

You can read the center’s analysis for more details of the bill. But a few things struck me, such as how rapidly the credit is phased down. Under the bill, families earning an adjusted gross income over $43,000 can claim a maximum credit of 20 percent of expenses, no more than $1,200, the center reports.

Plus, current expense limits and income scales are not adjusted for inflation, the Center said.

I am still working on the bill’s prospects, but one of the two co-sponsors, Sen. Olympia Snowe, R-Maine, sits on the powerful Senate Finance Committee, which means she can hopefully get it moving along the legislative pipeline. (The other leading co-sponsor is Sen. Blanche Lincoln, D-Arkansas.)

You can read Sen. Snowe’s press release on her legislation here.