| 47 | | - | SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§235- Employers providing child care tax credit. (a) There shall be allowed to each qualifying taxpayer subject to the taxes imposed by this chapter, an income tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified costs incurred by the entity for the taxable year. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of the credit shall be determined pursuant to section 704(b) of the Internal Revenue Code. (b) The amount of the credit determined under this section for the taxable year shall be equal to: (1) Seventy-five per cent of the qualified costs of operation incurred in the taxable year by a taxpayer who is an employer that provides child care services for the taxpayer's employees on the premises of the employer, less any amounts paid by the employee to the employer as compensation for the child care services; provided that any tax credit amounts claimed but not used in the taxable year may be carried forward for five years; provided further that the total amount of tax credit claimed in each taxable year shall not exceed fifty per cent of the taxpayer's net income tax liability for the taxable year computed without regard to any other credits; (2) Seventy-five per cent of costs incurred in the taxable year by a taxpayer who is an employer that sponsors or pays for child care services provided at a location other than at the premises of the employer for the taxpayer's employees; provided that any tax credit amounts claimed but not used in the taxable year may be carried forward for five years; provided further that the total amount of tax credit claimed in each taxable year shall not exceed fifty per cent of the taxpayer's net income tax liability for the taxable year computed without regard to any other credits; and (3) One hundred per cent of the costs of qualified child care property purchased and acquired by a taxpayer who is an employer to provide child care facilities on the premises of the employer for their employees; provided that the tax credit shall be prorated equally over a period of ten years beginning in the taxable year that the qualified child care property is placed in service; provided further that no prorated tax credit under this paragraph that exceeds the taxpayer's net income tax liability for the taxable year may be claimed against the taxpayer's income tax liability in subsequent years. (c) Every taxpayer claiming a tax credit under this section shall submit a written, sworn statement to the department of taxation identifying: (1) The names of all employees utilizing child care services at the premises of the employer; (2) The name of any child care provider rendering employer-provided child care services to the taxpayer's employees; and (3) Any information as may be required by the department of human services to ensure that credits are granted only to the taxpayers who provide or sponsor approved child care services pursuant to this section; provided that the information shall be set forth in rules adopted by the department of human services. (d) The sale, merger, acquisition, or bankruptcy of any taxpayer shall not create new eligibility for the credit in any succeeding taxpayer. (e) Every claim, including amended claims, for the tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit. (f) For the purposes of this section: "Employer-provided" refers to services offered on the premises of the employer. "Employer-sponsored" refers to a contractual arrangement with a child care provider that is paid for by the employer. "Premises of the employer" refers to any location in the State that is used by an employer as a place of business at which the employer provides child care; provided that if the place of business is impracticable or otherwise unsuitable for on-site provision of child care services, the child care services may be provided at another location that is within a reasonable distance of the employer's place of business. "Qualified child care property" means any property purchased or acquired by the taxpayer and placed in service during a taxable year for the provision of child care to the taxpayer's employees. "Qualified cost of operation" means reasonable, direct operational costs incurred by a taxpayer as a result of operating an employer-provided child care facility for an employee or employer-sponsored child care services at a child care facility licensed and approved by the department of human services. "Qualifying taxpayer" means an employer who provides child care services on the premises of the employer or subsidizes the cost of child care for the employer's employee." SECTION 2. New statutory material is underscored. SECTION 3. This Act shall take effect on July 1, 2050. |
|---|
| 47 | + | SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§235- Employers providing child care tax credit. (a) There shall be allowed to each qualifying taxpayer subject to the taxes imposed by this chapter, an income tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified costs incurred by the entity for the taxable year. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of the credit shall be determined pursuant to section 704(b) of the Internal Revenue Code. (b) The amount of the credit determined under this section for the taxable year shall be equal to: (1) Seventy-five per cent of the qualified costs of operation incurred in the taxable year by a taxpayer who is an employer that provides child care services for the taxpayer's employees on the premises of the employer, less any amounts paid by the employee to the employer as compensation for the child care services; provided that any tax credit amounts claimed but not used in the taxable year may be carried forward for five years; provided further that the total amount of tax credit claimed in each taxable year shall not exceed fifty per cent of the taxpayer's net income tax liability for the taxable year computed without regard to any other credits; (2) Seventy-five per cent of costs incurred in the taxable year by a taxpayer who is an employer that sponsors or pays for child care services provided at a location other than at the premises of the employer for the taxpayer's employees; provided that any tax credit amounts claimed but not used in the taxable year may be carried forward for five years; provided further that the total amount of tax credit claimed in each taxable year shall not exceed fifty per cent of the taxpayer's net income tax liability for the taxable year computed without regard to any other credits; and (3) One hundred per cent of the costs of qualified child care property purchased and acquired by a taxpayer who is an employer to provide child care facilities on the premises of the employer for their employees; provided that the tax credit shall be prorated equally over a period of ten years beginning in the taxable year that the qualified child care property is placed in service. (c) Every taxpayer claiming a tax credit under this section shall submit a written, sworn statement to the department of taxation identifying: (1) The names of all employees utilizing child care services at the premises of the employer; (2) The name of any child care provider rendering employer-provided child care services to the taxpayer's employees; and (3) Any information as may be required by the department of human services to ensure that credits are granted only to the taxpayers who provide or sponsor approved child care services pursuant to this section. (d) Any credit claimed in any taxable year but not used in that taxable year may be carried forward for three years from the close of the taxable year. The sale, merger, acquisition, or bankruptcy of any taxpayer shall not create new eligibility for the credit in any succeeding taxpayer. (e) Every claim, including amended claims, for the tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit. (f) For the purposes of this section: "Employer-provided" refers to services offered on the premises of the employer. "Employer-sponsored" refers to a contractual arrangement with a child care provider that is paid for by the employer. "Premises of the employer" refers to any location in the State that is used by an employer as a place of business at which the employer provides child care; provided that if the place of business is impracticable or otherwise unsuitable for on-site provision of child care services, the child care services may be provided at another location that is within a reasonable distance of the employer's place of business. "Qualified child care property" means any property purchased or acquired by the taxpayer and placed in service during a taxable year for the provision of child care to the taxpayer's employees. "Qualified cost of operation" means reasonable, direct operational costs incurred by a taxpayer as a result of operating an employer-provided child care facility for an employee or employer-sponsored child care services at a child care facility licensed and approved by the department of human services. "Qualifying taxpayer" means an employer who provides child care services on the premises of the employer or subsidizes the cost of child care for the employer's employee." SECTION 2. New statutory material is underscored. SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2023. INTRODUCED BY: _____________________________ |
|---|