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Business groups urge simplification of childcare tax credit to expand employer uptake
Summary
Business and early-learning groups told the committee that a $6,000-per-employee minimum and lengthy paperwork have kept employers from using a childcare tax credit; they proposed lowering thresholds, creating regional hubs to collect paperwork, and better outreach.
Representatives of the state's business community and early-learning advocates described barriers to employer use of the state childcare tax credit and offered practical fixes intended to increase private-sector participation.
Scott Waller and Biz Harris said employers are interested but find the program administratively burdensome. Harris, who leads the Early Learning Alliance, said the department of revenue guidance runs several pages and that the $6,000 minimum per employee is prohibitive for many midsize and small employers.
"The $6,000 minimum that you have to spend per employee is really just too high for a lot of people to take advantage of," Harris said, adding that the paperwork and required certifications (employer, employee, provider) create an administrative barrier for employers and providers who lack HR or accounting staff.
Speakers proposed several solutions: reduce the minimum contribution or add a lower tier, create a centralized clearinghouse or regional hub to verify eligible providers and collect documentation, and streamline requirements so smaller employers and community partners can participate. They said the state should provide clear, concise toolkits and consider regional or sector-based outreach to publicize the credit and help employers claim it.
Committee members from manufacturing-heavy districts noted that off-site or employer-supported centers can help businesses with nonstandard shift schedules and urged continued public-private cooperation to expand childcare supply.
