North Dakota Senate Bill SB2237

North Dakota 2023-2024 Regular Session

• Introduced: 1/12/23
• Refer: 1/12/23
• Report DNP: 2/8/23
• Refer: 2/9/23
• Report Pass: 2/16/23
• Engrossed: 2/20/23
• Refer: 2/21/23
• Report DNP: 3/14/23

Caption

A child care income tax credit; and to provide an effective date.

Impact

The implementation of SB2237 is expected to have a positive economic impact on families by providing much-needed financial assistance for child care. This is significant as it contributes to a supportive environment for working parents and helps promote early childhood education. Given the high costs associated with child care, the tax credit may incentivize parents to seek quality care and education for their children, possibly leading to an increase in overall workforce participation among parents.

Summary

Senate Bill 2237 introduces a new child care income tax credit aimed at easing the financial burden on families with child care expenses in North Dakota. The bill stipulates that taxpayers whose federal adjusted gross income does not exceed $120,000 collectively for married couples are eligible for a credit against their tax liability related to child care costs. The credit is calculated as the greater of 40% of the federal credit for child care expenses or 10% of the child tax credit, although it cannot exceed the taxpayer's tax liability for that year.

Contention

Although the bill appears beneficial for families, there might be contention surrounding the income cap and the extent of the tax credit. Concerns may arise regarding whether the threshold of $120,000 is adequate to cover the needs of all working families, particularly in urban areas where living costs are higher. Furthermore, discussions could pivot around the effectiveness of tax credits in actualizing intended outcomes, such as improving access to child care services and whether the fiscal implications on the state's budget are manageable.