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Committee approves higher dependent‑care tax credit formula; supporters say it would help working families
Summary
HB 753 passed the committee with minor drafting fixes to increase the percentage of employment-related dependent‑care expenses that taxpayers can claim; advocates said the bill would aid middle-income families who do not qualify for subsidies and bear high childcare costs.
The committee advanced House Bill 753, which raises the percentage of employment‑related dependent‑care expenses taxpayers may claim under the household and dependent care services tax credit.
Supporters including the Executive Office on Aging, Catholic Charities Hawaii and AARP said the credit would ease the burden on working caregivers and families. Nicole Wu of Hawaii Children's Action Network explained the policy history: the dollar cap on qualifying expenses was increased in a prior legislative session but the percentage cap remained low for higher‑income taxpayers; HB 753 aims to raise the percentage and reduce the remaining burden for middle‑income families.
Tax Foundation representatives provided technical comments about administrability and complexity of the proposed formula and welcomed new guardrails in the bill that disallow credits for individuals with prior abuse findings. The committee adopted technical amendments for clarity, a defected repeal date, and sent the bill forward.
What happens next: HB 753 will proceed to the finance committees for fiscal impact analysis; the Department of Taxation agreed to provide updated cost estimates upon request.
