Currently, a resident individual with a federal adjusted gross income of $60,000 or less is allowed a state income tax credit (state credit) for child care expenses that is a percentage of a similar federal income tax credit claimed (federal credit). The amount of the state credit depends on the individual's adjusted gross income (AGI). If the individual's AGI is:
- $25,000 or less, then the state credit is 50% of the federal credit;
- $25,001 to $35,000, then the state credit is 30% of the federal credit; and
- $35,001 to $60,000, then the state credit is 10% of the federal credit.
The bill expands the state credit by allowing a resident individual with an AGI that is less than or equal to $150,000 to claim a credit that is equal to 80% of the individual's federal credit. For a taxpayer who is eligible for the credit due to the increased income threshold, the state credit is not refundable but may be carried forward up to 5 income tax years.
The bill makes an appropriation.
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)