Child day-care facility investment and child day-care expense reimbursement; income tax credits.
Impact
The bill is designed to encourage businesses to establish child day-care facilities, potentially alleviating some of the burden faced by working parents. By incentivizing companies to invest in child care, HB2345 aims to improve employee retention and attractiveness as employers in a competitive job market. It also reflects a broader recognition of the importance of child care services for workforce engagement and social equity, supporting families in balancing work and home life. The proposed credits can contribute to the availability of quality child care in the state, which is a pressing issue for many Virginia families.
Summary
House Bill 2345 aims to amend section 58.1-439.4 of the Code of Virginia, addressing tax credits associated with child day-care facilities. The bill proposes a nonrefundable tax credit for businesses that invest in the establishment of child day-care facilities primarily for their employees' children. For taxable years before January 1, 2026, businesses can receive a tax credit equal to 25% of the expenses incurred for the planning, construction, renovation, or acquisition of such facilities, with a cap of $25,000. After 2026, the bill increases the cap to $50,000 for similar expenses directly tied to reimbursed child day-care costs incurred by employees, making it a more significant incentive for employers to support child care services.
Contention
Points of contention surrounding HB2345 may arise from the implications of the financial burden placed on the state due to the tax credits. While the aim is to assist employees, there may be concerns regarding the potential loss of revenue for state programs that depend on tax income. Additionally, some critics may argue that tax credits for businesses could lead to minimal actual contributions to accessible child care, particularly if the investment in facilities does not translate to actual care provision for lower-income families. The balance between supporting businesses and ensuring equitable access to child care services could lead to debates among lawmakers and stakeholders.