Utah 2025 Regular Session

Utah House Bill HB0389 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	02-~~21 10~~:06 1st Sub. (Buff) H.B. 389
	1	+	02-17 09:25 1st Sub. (Buff) H.B. 389
2	2		Jason E. Thompson proposes the following substitute bill:
3	3		1
4	4		Child Care Business Tax Credit
5	5		2025 GENERAL SESSION
6	6		STATE OF UTAH
7	7		Chief Sponsor: Jason E. Thompson
8	8		Senate Sponsor:
9	9		2
10	10
11	11		3
12	12		LONG TITLE
13	13		4
14	14		General Description:
15	15		5
16	16		This bill enacts an income tax credit for employer-provided child care.
17	17		6
18	18		Highlighted Provisions:
19	19		7
20	20		This bill:
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22	22		▸ enacts nonrefundable corporate and individual income tax credits for employer-provided
23	23		9
24	24		child care; and
25	25		10
26	26		▸ makes technical and conforming changes.
27	27		11
28	28		Money Appropriated in this Bill:
29	29		12
30	30		None
31	31		13
32	32		Other Special Clauses:
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34	34		This bill provides a special effective date.
35	35		15
36	36		This bill provides retrospective operation.
37	37		16
38	38		Utah Code Sections Affected:
39	39		17
40	40		AMENDS:
41	41		18
42	42		59-10-1002.2, as last amended by Laws of Utah 2023, Chapters 460, 462
43	43		19
44	44		ENACTS:
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46	46		59-7-627, Utah Code Annotated 1953
47	47		21
48	48		59-10-1048, Utah Code Annotated 1953
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50	50
51	51		23
52	52		Be it enacted by the Legislature of the state of Utah:
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54	54		Section 1. Section 59-7-627 is enacted to read:
55	55		25
56	56		59-7-627 . Nonrefundable tax credits for employer-provided child care.
57	57		26
58	58		(1) As used in this section:
59	59		27
60	60		(a) "Principal residence" means the same as that term is defined in Section 121, Internal
61	61		28
62	62		Revenue Code.
63	63		29
64		-	~~1st Sub. H.~~B~~. 389 1st Sub. (Buff~~) ~~H.B. 389~~ ~~02-21 10~~:06
65		-	(b) ~~"Qualified child care expenditure" means the amount paid or incurred Ĥ→ [~~:]
	64	+	(b) "Qualified child care expenditure" means the amount paid or incurred:
	65	+	1st Sub. H.B. 389 1st Sub. (Buff) H.B. 389 02-17 09:25
66	66		30
67		-	[(i)~~] ←Ĥ~~ for the operating costs of a qualified child care facility of the employer, including
	67	+	(i) for the operating costs of a qualified child care facility of the employer, including
68	68		31
69	69		costs related to training employees, offering scholarship programs, and providing
70	70		32
71		-	increased compensation to employees with higher levels of child care training ~~Ĥ→ [~~; or~~] .~~
	71	+	increased compensation to employees with higher levels of child care training; or
72	72		33
73		-	[(ii) under a contract with a qualified child care facility to provide child care services
74		-	] ←Ĥ
	73	+	(ii) under a contract with a qualified child care facility to provide child care services
75	74		34
76		-	~~Ĥ→ [~~to the employer's employees.~~] ←Ĥ~~
	75	+	to the employer's employees.
77	76		35
78	77		(c) "Qualified child care facility" means the same as that term is defined in Section 45F,
79	78		36
80	79		Internal Revenue Code, except that the facility is a center based child care as that
81	80		37
82	81		term is defined in Section 26B-2-401 and is located in the state:
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84	83		(i) in a county of the first class, as classified in Section 17-50-501, within one mile of
85	84		39
86	85		any boundary of the property on which the employer's office is located;
87	86		40
88	87		(ii) in a county of the second or third class, as classified in Section 17-50-501, within
89	88		41
90	89		two miles of any boundary of the property on which the employer's office is
91	90		42
92	91		located; or
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94	93		(iii) in a county of the fourth, fifth, or sixth class, as classified in Section 17-50-501:
95	94		44
96	95		(A) within the boundaries of the municipality in which the employer's office is
97	96		45
98	97		located; or
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100	99		(B) if the employer's office is located in an unincorporated portion of the county,
101	100		47
102	101		within the boundaries of the nearest municipality.
103	102		48
104	103		(d) "Qualified construction expenditure" means an amount paid or incurred to acquire,
105	104		49
106	105		construct, rehabilitate, or expand property:
107	106		50
108		-	(i) for a qualified child care facility of the employer; ~~Ĥ→ and ←Ĥ~~
	107	+	(i) for a qualified child care facility of the employer;
109	108		51
110	109		(ii) with respect to which the employer is allowed a deduction for depreciation, or
111	110		52
112		-	amortization in lieu of depreciation ~~Ĥ→ [~~; and~~] .~~
	111	+	amortization in lieu of depreciation; and
113	112		53
114		-	[(iii) that is not part of the principal residence of the employer or an employee of the ~~] ←Ĥ~~
	113	+	(iii) that is not part of the principal residence of the employer or an employee of the
115	114		54
116		-	~~Ĥ→ [~~employer.~~] ←Ĥ~~
	115	+	employer.
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118	117		(e) "Qualifying taxpayer" means a taxpayer that:
119	118		56
120	119		(i) is an employer; and
121	120		57
122	121		(ii) qualifies for and claims the federal employer-provided child care tax credit
123	122		58
124	123		described in Section 45F, Internal Revenue Code, for the current taxable year.
125	124		59
126	125		(2)(a) A qualifying taxpayer may claim a nonrefundable tax credit equal to 20% of the
127	126		60
128	127		qualified construction expenditures the qualifying taxpayer incurred during the
129		-	- 2 - 02-21 10:06 1st Sub. (Buff) H.B. 389
130	128		61
131	129		taxable year.
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133	131		(b) A qualifying taxpayer may carry forward, to the next five taxable years, the amount
134	132		63
135	133		of the qualifying taxpayer's tax credit described in this Subsection (2) that exceeds
	134	+	- 2 - 02-17 09:25 1st Sub. (Buff) H.B. 389
136	135		64
137	136		the qualifying taxpayer's income tax liability for the taxable year.
138	137		65
139	138		(3)(a) A qualifying taxpayer may claim a nonrefundable tax credit equal to 10% of the
140	139		66
141	140		qualified child care expenditures the qualifying taxpayer incurred during the taxable
142	141		67
143	142		year.
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145	144		(b) A qualifying taxpayer may not carry forward or carry back the tax credit described in
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147	146		this Subsection (3) that exceeds the qualifying taxpayer's income tax liability for the
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149	148		taxable year.
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151	150		Section 2. Section 59-10-1002.2 is amended to read:
152	151		72
153	152		59-10-1002.2 . Apportionment of tax credits.
154	153		73
155	154		(1) A nonresident individual or a part-year resident individual that claims a tax credit in
156	155		74
157	156		accordance with Section 59-10-1017, 59-10-1018, 59-10-1019, 59-10-1022, 59-10-1023,
158	157		75
159	158		59-10-1024, 59-10-1028, 59-10-1042, 59-10-1043, 59-10-1044, 59-10-1046, [or ]
160	159		76
161	160		59-10-1047, or 59-10-1048 may only claim an apportioned amount of the tax credit
162	161		77
163	162		equal to:
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165	164		(a) for a nonresident individual, the product of:
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167	166		(i) the state income tax percentage for the nonresident individual; and
168	167		80
169	168		(ii) the amount of the tax credit that the nonresident individual would have been
170	169		81
171	170		allowed to claim but for the apportionment requirements of this section; or
172	171		82
173	172		(b) for a part-year resident individual, the product of:
174	173		83
175	174		(i) the state income tax percentage for the part-year resident individual; and
176	175		84
177	176		(ii) the amount of the tax credit that the part-year resident individual would have been
178	177		85
179	178		allowed to claim but for the apportionment requirements of this section.
180	179		86
181	180		(2) A nonresident estate or trust that claims a tax credit in accordance with Section
182	181		87
183	182		59-10-1017, 59-10-1020, 59-10-1022, 59-10-1024, [or ]59-10-1028, or 59-10-1048 may
184	183		88
185	184		only claim an apportioned amount of the tax credit equal to the product of:
186	185		89
187	186		(a) the state income tax percentage for the nonresident estate or trust; and
188	187		90
189	188		(b) the amount of the tax credit that the nonresident estate or trust would have been
190	189		91
191	190		allowed to claim but for the apportionment requirements of this section.
192	191		92
193	192		Section 3. Section 59-10-1048 is enacted to read:
194	193		93
195	194		59-10-1048 . Nonrefundable tax credits for employer-provider child care.
196	195		94
197	196		(1) As used in this section:
198		-	- 3 - 1st Sub. (Buff) H.B. 389 02-21 10:06
199	197		95
200	198		(a) "Principal residence" means the same as that term is defined in Section 121, Internal
201	199		96
202	200		Revenue Code.
203	201		97
204	202		(b) "Qualified child care expenditure" means the same as that term is defined in Section
	203	+	- 3 - 1st Sub. (Buff) H.B. 389 02-17 09:25
205	204		98
206	205		59-7-627.
207	206		99
208	207		(c) "Qualified child care facility" means the same as that term is defined in Section
209	208		100
210	209		59-7-627.
211	210		101
212	211		(d) "Qualified construction expenditure" means the same as that term is defined in
213	212		102
214	213		Section 59-7-627.
215	214		103
216	215		(e) "Qualifying claimant" means a claimant, estate, or trust that:
217	216		104
218	217		(i) is an employer; and
219	218		105
220	219		(ii) qualifies for and claims the federal employer-provided child care tax credit
221	220		106
222	221		described in Section 45F, Internal Revenue Code, for the current taxable year.
223	222		107
224	223		(2)(a) A qualifying claimant may claim a nonrefundable tax credit equal to 20% of the
225	224		108
226	225		qualified construction expenditures the qualifying claimant incurred during the
227	226		109
228	227		taxable year.
229	228		110
230	229		(b) A qualifying claimant may carry forward, to the next five taxable years, the amount
231	230		111
232	231		of the qualifying claimant's tax credit described in this Subsection (2) that exceeds
233	232		112
234	233		the qualifying claimant's income tax liability for the taxable year.
235	234		113
236	235		(3)(a) A qualifying claimant may claim a nonrefundable tax credit equal to 10% of the
237	236		114
238	237		qualified child care expenditures the qualifying claimant incurred during the taxable
239	238		115
240	239		year.
241	240		116
242	241		(b) A qualifying claimant may not carry forward or carry back the tax credit described in
243	242		117
244	243		this Subsection (3) that exceeds the qualifying claimant's income tax liability for the
245	244		118
246	245		taxable year.
247	246		119
248	247		Section 4. Effective Date.
249	248		120
250	249		This bill takes effect on May 7, 2025.
251	250		121
252	251		Section 5. Retrospective operation.
253	252		122
254	253		This bill has retrospective operation for a taxable year beginning on or after January 1,
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256	255		2025.
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