Child Care Act of 1986

Title I: Short Title; Findings - Child Care Act of 1986 - Sets forth congressional findings regarding the child care policies of the country.

Title II: Dependent Care Tax Credit and Voucher System - Part 1: Changes in Dependent Care Tax Credit - Amends the Internal Revenue Code to disallow dependent care tax credits when a taxpayer's adjusted gross income exceeds $50,000. Provides for a yearly cost-of-living adjustment to both base and ceiling amounts.

Disallows such credit where any of the employment-related expenses are paid with any vouchers.

Part 2: Voucher System for Child Care - Directs the Secretary of Health and Human Services to make grants to each State having an approved plan for child care vouchers for certain low income individuals. Authorizes appropriations for FY 1987 through 1990. Directs the Secretary to establish criteria, standards, and a timetable for the State plan. Requires the Secretary to reimburse a State for 75 percent of its costs under such plan. Provides for proportional allotments based upon the amount received under title XX (Grants to States for Social Services) of the Social Security Act.

Permits a State to use block grant funds for the voucher plan.

States that the redemption of a voucher for child care services by a child care provider constitutes receipt of Federal funds for purposes of provisions of the Civil Rights Act of 1964 relating to racial discrimination. Prohibits sex discrimination by any child care program. Exempts child care providers serving seven or fewer children.

Permits the Secretary to withhold payment from a noncomplying State.

Excludes the amount of any voucher from determinations of income or resources for purposes of any Federal or State law.

Requires each State to report biennially to the Secretary on the implementation of the plan including the amounts used on vouchers from block grant funds.

Requires the Secretary to report to the Congress an analysis of the State reports.