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Committee adopts on-site childcare credit amendment, narrows scope and funding

Ways and Means Committee · February 19, 2026

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Summary

Senate Bill 654, which would provide a tax credit for employers operating or contracting for on-site or nearby childcare (with provisions aimed at school-hour scheduling), was amended to include a quarter-mile proximity test and an aggregate cap lowered to $2.5 million before passing the committee 3–2.

The Ways and Means Committee adopted a committee amendment to Senate Bill 654 and voted the bill out of committee by a 3–2 margin.

Senator Sullivan, the bill sponsor, said the measure aims to incentivize employers to provide on-site or nearby childcare that aligns with school hours so parents can work daytime shifts without losing time with their children. The amendment accepted by the committee replaces some drafting errors, clarifies that the credit applies to employers "operating or contracting for on-site or nearby childcare services," and adds a geographic limit of one quarter mile to prevent impractically distant qualifying arrangements. The committee also set a per-employer cap of $100,000 and initially proposed an aggregate cap; the chair and members agreed to reduce the earlier $5 million figure to $2.5 million under the committee amendment.

Committee members debated whether the measure unfairly privileges daytime workers over night-shift workers and whether the childcare workforce shortage would limit private employers' ability to open centers. Senator Murphy and others expressed concern that the bill's eligibility rules could treat parents differently based on work hours. "I don't like the idea of treating parents differently based on whether what their hours are working," a senator said during the debate. Senator Sullivan and supporters responded that the bill is intentionally targeted at daytime hours to help parents who must drop children off before school and pick them up after the school day.

Committee members also discussed implementation limits, including how many employers would apply and whether to pilot the program at a smaller scale. The committee adopted red-line corrections and the committee amendment, then voted the bill out of committee 3'to'2.

What happens next: With the committee amendment adopted and the bill voted out, SB 654 will proceed for further consideration with the clarified proximity, cap, and operational language included in the committee amendment.