The Affordable Childcare Act of 2025 aims to establish a new income tax credit for employers who assist their employees with childcare costs, replacing the existing tax credit for employer-operated childcare facilities. The bill introduces a new section to the Arkansas Code, specifically 26-51-518, which outlines the eligibility criteria and the amount of the tax credit. Employers can receive a credit of 30% of the total childcare expenses incurred for their employees' dependent children, with specific provisions for businesses that establish their own childcare facilities, allowing for a credit of up to 50% of the establishment and operational costs. The maximum credit amounts are capped at $30,000 for certain expenses and $45,000 for others, with provisions for refunds if the credit exceeds the business's tax liability.

Additionally, the bill repeals two existing sections of the Arkansas Code (26-51-507 and 26-51-508) that pertain to the previous tax credits for employer-provided childcare. The new provisions are set to take effect for tax years beginning on or after January 1, 2025. This legislative change is designed to enhance support for working families by incentivizing employers to contribute to childcare costs, thereby promoting workforce participation and economic stability.