This bill amends Arkansas income tax laws to introduce a new tax credit specifically for licensed childcare providers. The credit is based on the average monthly number of eligible children enrolled, with a maximum limit of $25,000 per year. The bill also establishes definitions for terms such as "eligible expenses," "rural area," and "small business," while setting limits on the total aggregate amount of credits available, ensuring that a portion is reserved for small businesses and those located in rural areas. Additionally, it repeals the previous income tax credit for employer-provided childcare as outlined in Arkansas Code 26-51-507 and modifies related sections accordingly.

Furthermore, the bill requires licensed childcare providers to submit completed applications and necessary documentation to claim the new credits, with automatic denial for non-compliance. Tax-exempt providers under 26 U.S.C. 501(c)(3) as of January 1, 2025, will have the option to transfer or sell their credits. The Department of Finance and Administration is designated to oversee the administration of these credits and ensure compliance with the new regulations. The provisions of this act will take effect for tax years beginning on or after January 1, 2026, with an emergency clause for immediate implementation upon the Governor's approval.

Statutes affected:
Old version HB1435 V2 - 2-26-2025 10:37 AM: 6-45-109(b), 20-78-205(d), 02-26-2025, 26-51-507, 26-52-401, 26-52-401(29), 26-51-508, 26-53-132, 26-52-516
Old version HB1435 V3 - 2-27-2025 11:22 AM: 6-45-109(b), 20-78-205(d), 02-27-2025, 26-51-507, 26-52-401, 26-52-401(29), 26-51-508, 26-53-132, 26-52-516
Old version HB1435 Original - 2-7-2025 12:00 PM: 6-45-109(b), 20-78-205(d), 26-51-507, 26-52-401, 26-52-401(29), 26-51-508, 26-53-132, 26-52-516
HB 1435: 6-45-109(b), 20-78-205(d), 26-51-507, 26-52-401, 26-52-401(29), 26-51-508, 26-53-132, 26-52-516