THE SENATE

S.B. NO.

2291

THIRTIETH LEGISLATURE, 2020

S.D. 2

STATE OF HAWAII

H.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

     "§235-     Tax credit for business-supported child care.  (a)  There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

     (b)  The amount of the credit shall be       per cent of the taxpayer's eligible business child care expenses.  In the case of a partnership, S corporation, estate, or trust, the tax credit shall be based on the eligible business child care expenses incurred by the entity for the taxable year.  The expenses upon which the tax credit is computed shall be determined at the entity level.

     (c)  If the tax credit claimed by the taxpayer exceeds the amount of income tax payment due from the taxpayer, the excess of the credit over payments due shall be refunded to the taxpayer; provided that a tax credit under this section properly claimed by an individual who has no income tax liability shall be paid to the taxpayer; provided further that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.

     (d)  All claims for a tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the tax credit.

     (e)  No other tax credit or deduction shall be claimed under this chapter for the certain expenses used to claim a tax credit under this section for the taxable year.

     (f)  The director of taxation:

     (1)  Shall prepare any forms necessary to claim a tax credit under this section;

     (2)  May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and

     (3)  May adopt rules, pursuant to chapter 91, to effectuate this section.

     (g)  As used in this section:

     "Child care facility" means a licensed or registered child care facility as defined under section 346-151.

     "Eligible business child care expenses" means the sum of the amounts a taxpayer paid to a child care facility in the State to:

     (1)  Support the child care needs of the taxpayer's employees in the taxable year, not to exceed $           per child per taxable year; and

     (2)  Purchase child care enrollment at the child care facility that are actually provided or reserved for children of the taxpayer's employees, not to exceed $           per taxable year."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2050, and shall apply to taxable years beginning after December 31, 2020.

 

Report Title:

Refundable Tax Credit; Business-Supported Child Care

 

Description:

For taxable years beginning after 12/31/2020, establishes a refundable tax credit equal to an unspecified percentage of eligible child care expenses paid by an employer for its employees' child care needs.  Effective 7/1/2050.  (HD1)

 

 

 

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