Explanation of Bill

Explanation of Bill

This bill, identified as LCO No. 1659 and Raised Bill No. 282, was introduced to the Committee on Committee on Children in the General Assembly. It aims to establish a tax credit for employers who make payments toward the child care costs of their employees.

Under this bill, employers can claim the tax credit if they make payments to or on behalf of their employees for eligible child care expenses. Eligible child care costs refer to the expenses incurred by employees for child care services provided by child care centers or group child care homes. Qualified employees are individuals who both work and reside in the state.

Starting from income years commencing on or after January 1, 2021, employers can claim a tax credit equal to fifty percent of the eligible child care costs paid during the income year. The credit cannot exceed two thousand five hundred dollars per qualified employee. However, if an employer claims this credit, they cannot claim any other credit for the same child care cost payment under any other provision of the general statutes.

The credit can be claimed for payments made during the period in which the qualified employee worked and resided in the state. If an employee worked and resided in the state for any part of a month, they will be considered to have worked and resided in the state for the entire month.

To claim the credit, employers must provide any documentation required by the Commissioner of Revenue Services in a form and manner specified by the commissioner.

This bill will take effect on July 1, 2020, and will be applicable to income years commencing on or after January 1, 2021.

Statement of Purpose

The purpose of this bill is to provide a tax credit to employers who make payments for the child care costs of their employees residing in the state.

Rep. Robin Comey

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