Income taxes: credits: cleaning and sanitizing supplies: COVID-19.
The bill modifies existing tax codes and introduces new sections to the Revenue and Taxation Code, which will allow businesses conducting operations in California to receive a tax credit for qualified child care expenditures and sanitization efforts necessitated by the COVID-19 health crisis. Specifically, businesses can claim credits for various related costs over a predefined period, and the Franchise Tax Board is tasked with monitoring and reporting on the efficacy of these credits, ensuring that they meet their intended goals of supporting families and easing business expenses.
Assembly Bill 2496, introduced by Assembly Member Choi, aims to provide tax credits to businesses for expenses incurred in the provision of child care and for the purchase of cleaning and sanitizing supplies during the coronavirus pandemic. The legislation introduces tax credits against personal and corporate income taxes for specific costs associated with employer-provided child care, aligning with federal provisions where the credits can be expected to ease the financial burden on businesses while supporting working families.
The reception of AB 2496 has been largely favorable, especially among businesses and advocates of working families. Proponents argue that the tax credits will incentivize greater services related to child care, helping families remain in the workforce. However, there are some concerns regarding the specific eligibility requirements and the use of state resources for tax expenditures, with calls for careful monitoring to ensure the credits target those who need them most while still supporting economic recovery.
Some contention revolves around the bill's sunset clause, wherein provisions are only effective until December 1, 2021. Critics argue that this timeframe may not sufficiently cover the ongoing needs of businesses struggling with the long-term impacts of the pandemic. Additionally, while the aim is to alleviate some of the challenges posed by COVID-19, questions remain on whether this will significantly bolster child care access or result in substantial benefits for businesses with varying capabilities in adapting to these changes.