if— (i) the principal use of the facility is to provide child care services, (ii) no more than 25 percent of the children receiving child care services at the facility are children (as defined in section 152(f)) of the individual or such individual’s spouse, and (iii) the facility meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including the licensing of the facility as a child care facility. Subparagraph (B)(i) shall not apply to a facility which is the principal residence (within the meaning of section 121) of the operator of the facility. (2) Child care services The term child care services means child care and early childhood education. . (b) Clerical amendment The table of sections for such subpart A is amended by inserting after the item relating to section 25D the following new item: Sec. 25E. Right start child care and education credit. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. 5. Increase in exclusion for employer-provided dependent care assistance (a) In general Subparagraph (A) of section 129(a)(2) of the Internal Revenue Code of 1986 (relating to dependent care assistance programs) is amended by striking $5,000 ($2,500 and inserting $7,500 ($3,750 . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2017.