This bill amends Arkansas income tax laws to introduce a new tax credit for licensed childcare providers, allowing them to claim $1,500 per eligible child enrolled, with a maximum annual credit of $25,000. It establishes a total cap of $5 million for all providers, with a portion specifically reserved for those in rural areas. The bill also repeals the previous employer-provided childcare tax credit and modifies existing provisions related to childcare tax credits.

Additionally, the bill outlines eligibility criteria for employers to claim tax credits for childcare expenses, including costs for constructing or renovating childcare facilities and payments to licensed providers. Employers can claim up to $500,000 per tax year, with an overall cap of $15 million, including allocations for small businesses and rural providers. The bill mandates that applications for these credits be submitted to the Department of Finance and Administration, which will deny applications that do not meet requirements. The provisions will take effect for tax years beginning January 1, 2026, and include an emergency clause for immediate implementation upon 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