HB 1258 - This act provides various tax credits for child care, including a credit for employer-provided child care services, an individual income tax credit, and a credit for child care services provided by a non-employed spouse.

The act authorizes a state income tax credit equal to 10% of certain expenditures made in making child care service available to employees of the taxpayer. To qualify for the credit, the taxpayer must provide subsidized child care services based on need, not discriminate based on race, creed, religion or national origin, and use a licensed child care facility. Any excess unused credit may be carried forward to future tax years.

A state individual income tax credit is authorized equal to the amount claimed as a credit for child and dependent care expenses on the individual's federal income tax return for that taxable year.

The act also authorizes a state income tax credit equal to $400 for taxpayers with a spouse who is not employed or receiving any public assistance and who provides the majority of supervision, instruction and care to a qualified dependent child under the age of six years. The act creates the Tobacco Settlement Trust Fund to receive all moneys received as a result of any award or settlement between the state and the tobacco industry. Moneys in the Trust Fund are to be used only for funding the tax credit for child care service payments.

An income tax credit is also authorized for resident taxpayers who make qualified child care service payments to anyone after January 1, 1999, but before December 31, 2001, and to any licensed child care facility, or person or facility which otherwise meets the requirement for licensure under Chapter 210, RSMo, after December 31, 2001. The credit is limited to $1,000 for children under the age of three years for full-time child care and $500 for part-time child care. The credit is limited to $500 for children under the age of five years for full-time child care and $250 for part-time child care. If the amount of the child care services credit exceeds the tax liability, the difference will be refunded to the taxpayer. Filing a false claim for a credit is a Class A misdemeanor. This section expires on December 31, 2023.

The act has an effective date of January 1, 1999, and applies to all taxable years beginning after December 31, 1998.
RUSS HEMBREE