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2023 - 2024 LEGISLATURE
2023 ASSEMBLY BILL 660
November 9, 2023 - Introduced by Representatives ARMSTRONG, HURD, BRANDTJEN,
DITTRICH, EDMING, GREEN, GUNDRUM, KITCHENS, MAGNAFICI, MAXEY,
MICHALSKI, MURSAU, NOVAK, O'CONNOR, PENTERMAN, RETTINGER, SCHRAA and
SNYDER, cosponsored by Senators FEYEN, CABRAL-GUEVARA, KNODL, QUINN and
NASS. Referred to Committee on Ways and Means.
***AUTHORS SUBJECT TO CHANGE***
AN ACT to amend 71.05 (6) (a) 15., 71.10 (4) (i), 71.21 (4) (a), 71.26 (2) (a) 4., 71.30
(3) (f), 71.34 (1k) (g), 71.45 (2) (a) 10. and 71.49 (1) (f); and to create 20.835 (2)
(et), 71.05 (6) (a) 30., 71.07 (8s), 71.21 (8), 71.26 (3) (hi), 71.28 (8s), 71.45 (2) (a)
25. and 71.47 (8s) of the statutes; relating to: creating a tax credit for employer
child care programs and making an appropriation.
Analysis by the Legislative Reference Bureau
This bill creates an income and franchise tax credit for businesses that operate
a child care program for their employees' children. The credit is equal to the amount
of capital expenditures incurred in establishing an employee child care program, the
amount of certain organization and administration expenses incurred, and the
amount of contributions made to a charitable organization for the purpose of
establishing an employee child care program. The maximum total credit that may
be claimed in a taxable year based on those capital expenditures, organization and
administration expenses, and contributions is $100,000. A person may also claim as
a credit the amount of operating expenses of an employer child care program, the
amount of payments made directly to a child care program in the name of and for the
benefit of an employee, and the amount of certain administrative costs. The
maximum total credit that may be claimed in a taxable year based on those operating
expenses, direct payments, and administrative costs is $3,000 for each child of an
employee participating in the child care program. The credit under the bill is
refundable, which means that if the credit exceeds the claimant's tax liability, the
claimant will receive the difference as a refund check.
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For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SECTION 1. 20.835 (2) (et) of the statutes is created to read:
20.835 (2) (et) Employer child care program credit. A sum sufficient to make
the payments under ss. 71.07 (8s) (d) 2., 71.28 (8s) (d) 2., and 71.47 (8s) (d) 2.
SECTION 2. 71.05 (6) (a) 15. of the statutes is amended to read:
71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm),
(2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5e), (5i), (5j),
(5k), (5r), (5rm), (6n), (8s), and (10) and not passed through by a partnership, limited
liability company, or tax-option corporation that has added that amount to the
partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or
71.34 (1k) (g).
SECTION 3. 71.05 (6) (a) 30. of the statutes is created to read:
71.05 (6) (a) 30. The amount contributed to a nonprofit entity that is deducted
under the Internal Revenue Code as a charitable contribution and that is used to
calculate a credit under s. 71.07 (8s).
SECTION 4. 71.07 (8s) of the statutes is created to read:
71.07 (8s) EMPLOYER CHILD CARE PROGRAM CREDIT. (a) Definitions. In this
subsection:
1. “Child care program” means a program in which child care services are
provided to the children of an employer's employees during the working hours of the
employees.
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2. “Claimant" means an employer who operates a child care program and who
files a claim under this subsection.
3. “Qualifying capital expenditures” means capital expenditures incurred in
establishing a child care program, including mortgage or lease payments and
expenditures for playground and classroom equipment, kitchen appliances, cooking
equipment, and real property, including improvements, located in this state.
(b) Filing claims. For taxable years beginning after December 31, 2022, subject
to the limitations provided in this subsection, a claimant may claim as a credit
against the tax imposed under s. 71.02, up to the amount of those taxes, all of the
following:
1. An amount equal to the qualifying capital expenditures incurred by the
claimant and the expenses incurred in organizing and administering direct
payments to a child care program not operated by the claimant during the first
taxable year those expenses are incurred. The total amount that the claimant may
claim as a credit under this subdivision and subd. 2. for a taxable year may not exceed
$100,000.
2. An amount equal to the contributions made by the claimant to a nonprofit
entity described in section 501 (c) 3 of the Internal Revenue Code for the purpose of
establishing a child care program. The total amount that the claimant may claim as
a credit under this subdivision and subd. 1. for a taxable year may not exceed
$100,000.
3. An amount equal to the expenses incurred by the claimant to operate a child
care program. The total amount that the claimant may claim as a credit under this
subdivision and subds. 4. and 5. for a taxable year may not exceed $3,000 for each
child of an employee participating in the child care program.
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4. An amount equal to the payments made by the claimant directly to a child
care program in the name of and for the benefit of an employee of the claimant, not
exceeding the amount charged to other children of like age and abilities of
individuals not employed by the claimant. The total amount that the claimant may
claim as a credit under this subdivision and subds. 3. and 5. for a taxable year may
not exceed $3,000 for each child of an employee participating in the child care
program.
5. An amount equal to the administrative costs associated with payments
described in subd. 4., not exceeding 1 percent of those payments. The total amount
that the claimant may claim as a credit under this subdivision and subds. 3. and 4.
for a taxable year may not exceed $3,000 for each child of an employee participating
in the child care program.
(c) Limitations. 1. No credit is allowed under this subsection if the child care
program is not in compliance with the requirements under subch. XV of ch. 48.
2. No credit is allowed under par. (b) 4. unless the total amount of the claimant's
payments to a child care program is greater than or equal to the total amount of the
employee's payments to the child care program.
3. Partnerships, limited liability companies, and tax-option corporations may
not claim the credit under this subsection, but the eligibility for, and the amount of,
the credit are based on the amounts paid by the entities under par. (b). A
partnership, limited liability company, or tax-option corporation shall compute the
amount of credit that each of its partners, members, or shareholders may claim and
shall provide that information to each of them. Partners, members, and
shareholders may claim the credit in proportion to their ownership interests.
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(d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the
credit under s. 71.28 (4), applies to the credit under this subsection.
2. If the allowable amount of the claim under this subsection exceeds the tax
otherwise due under s. 71.02, the amount of the claim that is not used to offset those
taxes shall be certified by the department of revenue to the department of
administration for payment by check, share draft, or other draft drawn from the
appropriation under s. 20.835 (2) (et).
SECTION 5. 71.10 (4) (i) of the statutes is amended to read:
71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland
preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and
beyond under s. 71.613, homestead credit under subch. VIII, jobs tax credit under s.
71.07 (3q), business development credit under s. 71.07 (3y), research credit under s.
71.07 (4k) (e) 2. a., veterans and surviving spouses property tax credit under s. 71.07
(6e), enterprise zone jobs credit under s. 71.07 (3w), electronics and information
technology manufacturing zone credit under s. 71.07 (3wm), employer child care
program credit under s. 71.07 (8s), earned income tax credit under s. 71.07 (9e),
estimated tax payments under s. 71.09, and taxes withheld under subch. X.
SECTION 6. 71.21 (4) (a) of the statutes is amended to read:
71.21 (4) (a) The amount of the credits computed by a partnership under s.
71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n),
(5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8s), and (10) and passed through to partners
shall be added to the partnership's income.
SECTION 7. 71.21 (8) of the statutes is created to read:
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71.21 (8) A charitable deduction under the Internal Revenue Code for an
amount contributed to a nonprofit entity for the purpose of establishing a child care
program that is used to calculate the credit under s. 71.07 (8s) is not allowed.
SECTION 8. 71.26 (2) (a) 4. of the statutes is amended to read:
71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm),
(1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (5e), (5g), (5i), (5j), (5k), (5r),
(5rm), (6n), (8s), and (10) and not passed through by a partnership, limited liability
company, or tax-option corporation that has added that amount to the partnership's,
limited liability company's, or tax-option corporation's income under s. 71.21 (4) or
71.34 (1k) (g).
SECTION 9. 71.26 (3) (hi) of the statutes is created to read:
71.26 (3) (hi) Section 170 is modified so that an amount contributed to a
nonprofit entity for the purpose of establishing a child care program that is used to
calculate the credit under s. 71.28 (8s) may not be deducted as provided under the
Internal Revenue Code.
SECTION 10. 71.28 (8s) of the statutes is created to read:
71.28 (8s) EMPLOYER CHILD CARE PROGRAM CREDIT. (a) Definitions. In this
subsection:
1. “Child care program” has the meaning given in s. 71.07 (8s) (a) 1.
2. “Claimant" means an employer who operates a child care program and who
files a claim under this subsection.
3. “Qualifying capital expenditures” has the meaning given in s. 71.07 (8s) (a)
3.
(b) Filing claims. For taxable years beginning after December 31, 2022, subject
to the limitations provided in this subsection, a claimant may claim as a credit
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against the tax imposed under s. 71.23, up to the amount of the tax, all of the
following:
1. An amount equal to the qualifying capital expenditures incurred by the
claimant and the expenses incurred in organizing and administering direct
payments to a child care program not operated by the claimant during the first
taxable year those expenses are incurred. The total amount that the claimant may
claim as a credit under this subdivision and subd. 2. for a taxable year may not exceed
$100,000.
2. An amount equal to the contributions made by the claimant to a nonprofit
entity described in section 501 (c) 3 of the Internal Revenue Code for the purpose of
establishing a child care program. The total amount that the claimant may claim as
a credit under this subdivision and subd. 1. for a taxable year may not exceed
$100,000.
3. An amount equal to the expenses incurred by the claimant to operate a child
care program. The total amount that the claimant may claim as a credit under this
subdivision and subds. 4. and 5. for a taxable year may not exceed $3,000 for each
child of an employee participating in the child care program.
4. An amount equal to the payments made by the claimant directly to a child
care program in the name of and for the benefit of an employee of the claimant, not
exceeding the amount charged to other children of like age and abilities of
individuals not employed by the claimant. The total amount that the claimant may
claim as a credit under this subdivision and subds. 3. and 5. for a taxable year may
not exceed $3,000 for each child of an employee participating in the child care
program.
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5. An amount equal to the administrative costs associated with payments
described in subd. 4., not exceeding 1 percent of those payments. The total amount
that the claimant may claim as a credit under this subdivision and subds. 3. and 4.
for a taxable year may not exceed $3,000 for each child of an employee participating
in the child care program.
(c) Limitations. 1. No credit is allowed under this subsection if the onsite
daycare facility is not in compliance with the requirements under subch. XV of ch.
48.
2. No credit is allowed under par. (b) 4. unless the total amount of the claimant's
payments to a child care program is greater than or equal to the total amount of the
employee's payments to the child care program.
3. Partnerships, limited liability companies, and tax-option corporations may
not claim the credit under this subsection, but the eligibility for, and the amount of,
the credit are based on the amounts paid by the entities under par. (b). A
partnership, limited liability company, or tax-option corporation shall compute the
amount of credit that each of its partners, members, or shareholders may claim and
shall provide that information to each of them. Partners, members, and
shareholders may claim the credit in proportion to their ownership interests.
(d) Administration. 1. Subsection (4) (e), (g), and (h), as it applies to the credit
under sub. (4), applies to the credit under this subsection.
2. If the allowable amount of the claim under this subsection exceeds the tax
otherwise due under s. 71.23, the amount of the claim that is not used to offset those
taxes shall be certified by the department of revenue to the department of
administration for payment by check, share draft, or other draft drawn from the
appropriation under s. 20.835 (2) (et).
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SECTION 11. 71.30 (3) (f) of the statutes is amended to read:
71.30 (3) (f) The total of farmland preservation credit under subch. IX, jobs
credit under s. 71.28 (3q), enterprise zone jobs credit under s. 71.28 (3w), electronics
and information technology manufacturing zone credit under s. 71.28 (3wm),
business development credit under s. 71.28 (3y), research credit under s. 71.28 (4) (k)
1., employer child care program credit under s. 71.28 (8s), and estimated tax
payments under s. 71.29.
SECTION 12. 71.34 (1k) (g) of the statutes is amended to read:
71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3q), (3t), (3w),
(3wm), (3y), (4), (5), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8s), and (10) and passed
through to shareholders.
SECTION 13. 71.45 (2) (a) 10. of the statutes is amended to read:
71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3q), (3w), (3y), (5e), (5g), (5i),
(5j), (5k), (5r), (5rm), (6n), (8s), and (10) and not passed through by a partnership,
limited liability company, or tax-option corporation that has added that amount to
the partnership's, limited liability company's, or tax-option corporation's income
under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit computed under s. 71.47
(3), (3t), (4), (4m), and (5).
SECTION 14. 71.45 (2) (a) 25. of the statutes is created to read:
71.45 (2) (a) 25. By adding to federal taxable income any amount used to
calculate the credit under s. 71.47 (8s) to the extent that amount is deducted under
the Internal Revenue Code as a charitable contribution.
SECTION 15. 71.47 (8s) of the statutes is created to read:
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SECTION 15 ASSEMBLY BILL 660
71.47 (8s) EMPLOYER CHILD CARE PROGRAM CREDIT. (a) Definitions. In this
subsection:
1. “Child care program” has the meaning given in s. 71.07 (8s) (a) 1.
2. “Claimant" means an employer who operates a child care program and who
files a claim under this subsection.
3. “Qualifying capital expenditures” has the meaning given in s. 71.07 (8s) (a)
3.
(b) Filing claims. For taxable years beginning after December 31, 2022, subject
to the limitations provided in this subsection, a claimant may claim as a credit
against the tax imposed under s. 71.43, up to the amount of the tax, all of the
following:
1. An amount equal to the qualifying capital expenditures incurred by the
claimant and the expenses incurred in organizing and administering direct
payments to a child care program not operated by the claimant during the first
taxable year those expenses are incurred. The total amount that the claimant may
claim as a credit under this subdivision and subd. 2. for a taxable year may not exceed
$100,000.
2. An amount equal to the contributions made by the claimant to a nonprofit
entity described in section 501 (c) 3 of the Internal Revenue Code for the purpose of
establishing a child care program. The total amount that the claimant may claim as
a credit under this subdivision and subd. 1. for a taxable year may not exceed
$100,000.
3. An amount equal to the expenses incurred by the claimant to operate a child
care program. The total amount that the claimant may claim as a credit under this
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subdivision and subds. 4. and 5. for a taxable year may not exceed $3,000 for each
child of an employee participating in the child care program.
4. An amount equal to the payments made by the claimant directly to a child
care program in the name of and for the benefit of an employee of the claimant, not
exceeding the amount charged to other children of like age and abilities of
individuals not employed by the claimant. The total amount that the claimant may
claim as a credit under this subdivision and subds. 3. and 5. for a taxable year may
not exceed $3,000 for each child of an employee participating in the child care
program.
5. An amount equal to the administrative costs associated with payments
described in subd. 4., not exceeding 1 percent of those payments. The total amount
that the claimant may claim as a credit under this subdivision and subds. 3. and 4.
for a taxable year may not exceed $3,000 for each child of an employee participating
in the child care program.
(c) Limitations. 1. No credit is allowed under this subsection if the onsite
daycare facility is not in compliance with the requirements under subch. XV of ch.
48.
2. No credit is allowed under par. (b) 4. unless the total amount of the claimant's
payments to a child care program is greater than or equal to the total amount of the
employee's payments to the child care program.
3. Partnerships, limited liability companies, and tax-option corporations may
not claim the credit under this subsection, but the eligibility for, and the amount of,
the credit are based on the amounts paid by the entities under par. (b). A
partnership, limited liability company, or tax-option corporation shall compute the
amount of credit that each of its partners, members, or shareholders may claim and
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shall provide that information to each of them. Partners, members, and
shareholders may claim the credit in proportion to their ownership interests.
(d) Administration. Section 71.28 (4) (e), (g), and (h), as it applies to the credit
under s. 71.28 (4), applies to the credit under this subsection.
2. If the allowable amount of the claim under this subsection exceeds the tax
otherwise due under s. 71.43, the amount of the claim that is not used to offset those
taxes shall be certified by the department of revenue to the department of
administration for payment by check, share draft, or other draft drawn from the
appropriation under s. 20.835 (2) (et).
SECTION 16. 71.49 (1) (f) of the statutes is amended to read:
71.49 (1) (f) The total of farmland preservation credit under subch. IX, jobs
credit under s. 71.47 (3q), enterprise zone jobs credit under s. 71.47 (3w), business
development credit under s. 71.47 (3y), research credit under s. 71.47 (4) (k) 1.,
employer child care program credit under s. 71.47 (8s), and estimated tax payments
under s. 71.48.
(END)
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