creating tax credits for businesses that have on-site child care services and for businesses that provide health care coverage for certain employees.
What changed between versions
Qualifying expenditures for the child care credit are now defined by reference to federal law (26 U.S.C. section 45F) rather than being left to DHHS rulemaking.
The term 'eligible employee' in the parent hours credit is renamed to 'parent hours employee,' and the cost basis is clarified as the 'employer's cost' of health care benefits.
The geographic requirement for the child care facility is expanded to include facilities within 1/4 mile of the business's main building, shared building, or office/industrial park.
A new $2,500,000 annual aggregate cap is placed on all on-site child care services tax credits issued in any state fiscal year. Excess applications carry over to subsequent years with priority.
A $40,000 appropriation is made to DRA for FY2028 for internal improvements and system upgrades to the revenue information management system.
The recapture provision now requires the business to pay 'any tax not paid due to credits received' rather than 'all credits received,' and adds a deadline of the tax year following closure.
A new application process requires taxpayers to apply on forms provided by the commissioner, with applications processed in order received and approved or denied within 60 days, including notice of denial reasons.
The waiver for recapture is narrowed from broad discretion (business sales, estate transfers, or other circumstances) to closures due to no fault of the business or circumstances beyond its control, with specific factors to consider and a requirement for written request before filing the tax return.
A new provision allows DHHS and DRA to share information about facility closures without waiving other confidentiality rules.
The shared facility provision is narrowed to specifically 'group child day care centers' and allows businesses to jointly claim the credit, rather than any business sharing a child care facility.
A new anti-double-dipping rule prevents costs already claimed as qualifying expenditures for the child care credit from also being used for the parent hours credit.
A new applicability section specifies that Section 1 applies to taxable periods beginning on or after December 31, 2027, providing a clearer start date than the July 1, 2027 effective date alone.
