This bill addresses various aspects of child care in Iowa, including the child and dependent care tax credit, the establishment of a child care workforce matching grant program, a small business child care tax credit, and provisions for state child care assistance. The bill amends Section 422.12C to allow taxpayers to claim a child and dependent care credit equal to the federal credit without limitations based on federal tax liability. It also introduces a new child care workforce matching grant program aimed at improving wages, benefits, and work environments for child care employees, as well as collecting data on their needs.

Additionally, the bill creates a small business child care tax credit for businesses providing child care benefits to employees, with a maximum credit of $3,000 per employee and an aggregate cap of $2 million per fiscal year. It modifies eligibility requirements for state child care assistance, lowering the minimum work hours for parents and adjusting income thresholds for eligibility. The bill also mandates that reimbursements to child care providers be based on the rates they charge private-pay families and allows for copayments based on household income for families participating in the assistance program. The provisions of the bill are retroactively applicable to tax years beginning on or after January 1, 2025.

Statutes affected:
Introduced: 422.12C, 422.12, 422.60, 533.329, 237A.13