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Sponsor seeks state tax credit to spur employer-provided child care
Summary
Representative White told the committee House Bill 167 would create a state tax credit modeled on the federal IRC Section 45F credit to encourage businesses to provide on-site or contracted child care; the sponsor proposed higher state incentives, carryover rules, and inclusion of nonprofits.
Representative Beth White told the House Ways and Means Committee House Bill 167 would create a state tax credit to encourage employers to provide on-site or near-site child care or to contract with local providers.
"House Bill 167 is an implementation of one strategy to help incentivize more businesses to get engaged in this process of solving" the child care and workforce crisis, Representative White said. She described the proposal as a state version of the federal credit under Internal Revenue Code Section 45F and said it would offer a stronger, more flexible incentive for employers.
White provided cost and usage figures during her testimony: she said center-based child care average annual costs range from about $8,600 to $11,500 per child and that infant care can run "almost $14,000." She summarized federal 45F limitations: the federal credit covers 25% of certain costs and up to 10% of resource-and-referral expenses for a maximum federal credit of $150,000 (which requires $600,000 in eligible spending to reach the cap). The sponsor said the state proposal would increase incentives, allow nonprofits to claim the credit even if they lack federal tax liability, permit larger deductible expenses up to $500,000 in some forms, and allow unused credits to be carried over for five years.
Committee members asked about program caps, whether states that have enacted similar credits measured pre/post impacts, and whether the proposal should be limited to a pilot program. Representative White said Ohio would join 16 states with comparable employer-focused policies and said she would provide comparative data and results from other states and the National Conference of State Legislatures to committee staff.
Members also raised questions about how many additional child care slots would be needed, how credits would interact with small and nonprofit employers, and whether a state budget cap or application process would be appropriate. White said those design elements could be discussed, and she signaled willingness to consider caps or pilot approaches to limit state liability.
No committee vote or fiscal analysis was presented during the hearing; Representative White offered to provide requested comparisons and data to the committee.
