SB 509 - This act establishes provisions relating to tax credits for child care.CHILD CARE CONTRIBUTION TAX CREDIT
This act establishes the "Child Care Contribution Tax Credit Act".
For all tax years beginning on or after January 1, 2024, this act authorizes a tax credit in an amount up to 75% of the taxpayer's contribution to a child care provider. A child care provider shall issue the taxpayer a contribution verification within sixty days of receiving a contribution, and shall remit such verification to the Department of Economic Development. A failure to issue a contribution verification to a taxpayer shall entitle the taxpayer to a refund of the donation.
Donations made under the act shall be used directly by a child care provider to promote child care for children 12 years of age and younger, shall not be made to a child care provider in which the taxpayer has a direct financial interest, and shall not be made in exchange for care of a child or children of the taxpayer. A child care provider that uses a contribution for an ineligible purpose shall repay to the Department the value of the tax credit used for such ineligible purpose.
Tax credits authorized by the act shall not be refundable or transferable, but may be carried back one tax year or forward for up to five tax years. Notwithstanding this provision, taxpayers that are exempt for federal tax purposes shall be eligible for a refund of any tax credits received under this act, as described in the act.
The maximum amount of tax credits that shall be authorized in a calendar year shall not exceed $20 million. If the maximum amount of tax credits is authorized in a calendar year, the maximum amount of tax credits that may be authorized in subsequent years shall be increased by 15%, provided that all such increases in the allowable amount of tax credits shall be reserved for contributions made to child care providers located in a child care desert, as such term is defined in the act.
This provision shall sunset on December 31, 2029, unless reauthorized by the General Assembly. (Section 135.1310)
EMPLOYER PROVIDED CHILD CARE ASSISTANCE TAX CREDIT
This act establishes the "Employer Provided Child Care Assistance Tax Credit Act".
For all tax years beginning on or after January 1, 2023, this act authorizes a tax credit in an amount equal to 30% of qualified child care expenditures, as defined in the act, paid or incurred by an employer providing child care for its employees. The amount of the tax credit authorized under this act shall not exceed $200,000 per taxpayer per tax year. A facility shall not be considered a child care facility for the purposes of the act unless enrollment in the facility is open to employees of the taxpayer, and at least 30% of the enrollees of the facility are dependents of employees of the taxpayer if the facility is the principal business of the taxpayer.
Tax credits authorized by the act shall not be refundable or transferable, but may be carried back one tax year or forward for up to five tax years. Notwithstanding this provision, taxpayers that are exempt for federal tax purposes shall be eligible for a refund of any tax credits received under this act, as described in the act.
The maximum amount of tax credits that shall be authorized in a calendar year shall not exceed $20 million. If the maximum amount of tax credits is authorized in a calendar year, the maximum amount of tax credits that may be authorized in subsequent years shall be increased by 15%, provided that all such increases in the allowable amount of tax credits shall be reserved for qualified child care expenditures for child care facilities located in a child care desert, as such term is defined in the act.
Tax credits authorized by this act shall be subject to recapture, as described in the act.
This provision shall sunset on December 31, 2029, unless reauthorized by the General Assembly. (Section 135.1325)
CHILD CARE PROVIDERS TAX CREDIT
This act establishes the "Child Care Providers Tax Credit Act".
For all tax years beginning on or after January 1, 2024, this act authorizes child care providers with three or more employees to claim a tax credit in an amount equal to the child care provider's eligible employer withholding tax, as defined in the act, and may also claim a tax credit in an amount up to 30% of the child care provider's capital expenditures, as defined in the act, provided that such capital expenditures are not less than $1,000. The amount of the tax credit authorized under this act shall not exceed $200,000 per child care provider per tax year.
A child care provider shall submit to the Department of Elementary and Secondary Education an application for the tax credit on a form to be provided by the Department. The child care provider shall provide proof of any capital expenditures for which the provider is claiming a tax credit.
Tax credits authorized by the act shall not be refundable or transferable, but may be carried back one tax year or forward for up to five tax years. Notwithstanding this provision, taxpayers that are exempt for federal tax purposes shall be eligible for a refund of any tax credits received under this act, as described in the act.
The maximum amount of tax credits that shall be authorized in a calendar year shall not exceed $20 million. If the maximum amount of tax credits is authorized in a calendar year, the maximum amount of tax credits that may be authorized in subsequent years shall be increased by 15%, provided that all such increases in the allowable amount of tax credits shall be reserved for child care providers located in a child care desert, as such term is defined in the act.
This provision shall sunset on December 31, 2029, unless reauthorized by the General Assembly. (Section 135.1350)
This act is substantially similar to provisions in HCS/SS/SB 143 (2023), SCS/SB 184 (2023), SS#3/HCS/HB 268 (2023), HCS/HB 350 (2023), SCS/HCS/HB 668 (2023), and HCS/HB 870 (2023).
JOSH NORBERG