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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 256 By: Thompson
AS INTRODUCED
An Act relating to income tax; defining terms;
providing credit for certain employer child care
expenditures; providing refundable cred it for
qualified child care worker; providing credit limit;
prohibiting refundability for certain credit;
allowing credit to be carried forward for certain
period; providing annual limit for certain tax years;
prescribing procedures to enforce annual limit ;
providing for codification; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2357.27A of Title 68, unless
there is created a duplication in numbering, reads as follows:
A. As used in this section:
1. “Child” means an individual who is five (5) years of age or
younger;
2. “Child care expense” means the cost or tuition paid for
child care services from a licensed child care facility;
3. “Employee” means a person to wh om wages or other
compensation is paid by an employer;
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4. “Employer” means any sole proprietor or lawfully recognized
business entity engaged in lawful business activity;
5. “Licensed child care facility” means a person or entity
lawfully authorized to provide child care services in this state and
is enrolled in Oklahoma ’s Quality Rating and Improvement System
(QRIS); and
6. “Qualified child care worker” means a person employed for at
least eight (8) consecutive months during the calendar year
corresponding to the tax year for which the credit authorized by
this section is claimed and who:
a. performs classroom services for a licensed child care
facility,
b. is enrolled in Oklah oma’s Professional Development
Ladder (PDL), and
c. has earned a minimum of twelve (12) credit hours.
B. For tax years 2026 through 2030, there shall be allowed as a
credit against the tax imposed pursuant to Section 2355 of Title 68
of the Oklahoma Statu tes, an amount equal to:
1. Thirty percent (30%) of the amount expended by an employer
for an employee’s child care expenses;
2. Thirty percent (30%) of the amount expended by an employer
for the cost of operating or contracting to operate a child care
facility primarily used by dependents of the employees of the
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employer or group of employers, minus any payments made by the
employees to the employer for those child care services; or
3. Thirty percent (30%) of the amount expended by an employer
to contract with a child care facility to ensure a reservation for
its employees.
C. For tax years 2026 through 2030, there shall be allowed a
credit against the tax imposed pursuant to Section 2355 of Title 68
of the Oklahoma Statutes in the amount of One Thousan d Dollars
($1,000.00) for a qualified child care worker. The credit
authorized pursuant to this subsection shall be refundable.
D. The total credit amount claimed by an employer pursuant to
the provisions of subsection B of this section shall not exceed
Thirty Thousand Dollars ($30,000.00) for any tax year.
E. The credit authoriz ed pursuant to the provisions of
subsection B of this section shall not be used to reduce the income
tax liability of the taxpayer to less than zero (0).
F. If the amount of the credit allowed pursuant to subsection B
of this section exceeds the income tax liability, the amount of
credit not used in any tax year may be carried forward, in order, to
each of the five (5) subsequent tax years.
G. For tax year 2028 and subsequent ta x years, the total amount
of credits authorized pursuant to subsection B of th is section shall
be adjusted annually to limit the annual amount of credits to Five
Million Dollars ($5,000,000.00). The Oklahoma Tax Commission shall
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annually calculate and pub lish a percentage by which the credits
authorized by this section shall be reduced so the total amount of
credits used to offset tax does not exceed the annual limit. The
formula to be used for the percentage adjustment shall be Five
Million Dollars ($5,0 00,000.00) divided by the amount of credit
claimed in the second preceding tax year. In the event the total
tax credits authorized by this section exceed the annual limit in
any tax year, the Tax Commission shall permit any excess but shall
factor such excess into the percentage adjustment formula for
subsequent tax years.
H. For tax year 2028 and subsequent tax years, the total amount
of credits authorized pursuant to subsection B of this section shall
be adjusted annually to limit the annual amount of c redits to
Fourteen Million Dollars ($14,000,000.00). The Tax Commission shall
annually calculate and publish a percentage by which the credits
authorized by this section shall be reduced so the total amount of
credits used to offset tax does not exceed th e annual limit. The
formula to be used for the percentage adjustment shall be Fourteen
Million Dollars ($14,000,000.00) divided by the amount of credit
claimed in the second preceding tax year. In the event the total
tax credits authorized by this sectio n exceed the annual limit in
any tax year, the Tax Commission shall permit any excess but shall
factor such excess into the percentage adjustment formula for
subsequent tax years.
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SECTION 2. This act shall become effective November 1, 2025 .
60-1-383 QD 12/30/2024 6:06:55 PM