Oregon Bill HB 2962 establishes child care tax credit for qualifying taxpayers

House Bill 2962, introduced in the Oregon State Legislature on January 17, 2025, aims to provide financial relief to families struggling with child care costs. This proposed legislation seeks to establish a tax credit for qualified taxpayers, specifically targeting those with low to moderate incomes who face challenges in affording child care for their children.

The bill defines "qualified taxpayers" as Oregon residents or nonresidents earning at least $6,000 from Oregon sources, with a federal adjusted gross income not exceeding 250% of the federal poverty level. It also outlines eligibility for child care expenses, which include costs associated with caring for children under 13 or those with disabilities. Notably, the bill ensures that taxpayers are not disqualified from claiming the credit if their spouse has a disability that limits their ability to provide child care or seek employment.

One of the key provisions of HB 2962 is the establishment of a tax credit based on a percentage of the taxpayer's child care expenses, with the percentage varying according to the taxpayer's income level. For instance, families with incomes at or below 200% of the federal poverty level could receive a credit of up to 40% of their child care expenses, providing significant financial support to those in need.

The introduction of this bill has sparked discussions among lawmakers and community advocates. Supporters argue that the measure addresses a pressing issue for many families, particularly as child care costs continue to rise. They emphasize that the tax credit could alleviate financial burdens, allowing parents to pursue employment or education without the stress of unaffordable child care.

However, some opposition has emerged, primarily concerning the bill's fiscal implications. Critics express concerns about the potential impact on state revenue and whether the proposed tax credits could lead to budget shortfalls in other essential services. As the bill moves through the legislative process, these debates are expected to intensify, with stakeholders advocating for both the needs of families and the financial health of the state.

The significance of HB 2962 extends beyond its immediate financial implications. By addressing child care affordability, the bill could have broader social impacts, potentially increasing workforce participation among parents and contributing to economic stability for families across Oregon. As discussions continue, the outcome of this legislation will be closely watched, with many hoping it will pave the way for a more supportive environment for working families in the state.