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Committee advances revised employer childcare tax credit: 50% credit, $3,000 cap per child and $1M program cap
Summary
Senate Bill 2867's committee substitute creates a 50% income tax credit for employers who provide dependent care during work hours or a $2,000 per‑child stipend to a licensed provider, limits the credit to $3,000 per child annually and places a $1,000,000 cap on the program; the committee adopted the substitute by voice vote.
Senator Boyd explained a committee substitute to Senate Bill 2867 that reworks an earlier employer childcare tax credit the legislature passed roughly three years ago.
"It allows a 50% income tax credit, [to] an employer providing dependent care for employees during the employee's work hours and to any employer who provides child care stipend of at least $2,000 per child for direct payment made to a licensed child care entity," Senator Boyd said, describing the substitute. He added the credit would not exceed $3,000 per child per year and that the committee substitute includes a $1,000,000 cap on the total credit amount while the program is tested.
Senator Braun questioned whether existing federal funds for child care were being used effectively and urged a broader review of fund coordination. "Lack of affordable child care keeps people from participating in the workforce," Senator Braun said, arguing the state should examine whether multiple programs are being run without sufficient coordination.
Senator Boyd and other members said they worked with the business community to simplify the credit and increase employer participation. The substitute requires that stipends be paid to licensed providers registered with the Department of Health, which the sponsor said preserves quality in program participation.
The committee adopted the committee substitute by voice vote and reported the bill out for further consideration.
