Senate Bill No. by Senator Edmonds proposes significant changes to the School Readiness Tax Credit, which will be renamed to the Workforce Child Care Tax Credits. The bill amends the definitions and eligibility criteria for business child care expenses, increasing the annual caps for various expenses. Specifically, the cap for construction, renovation, or major repairs of eligible child care facilities will rise from $50,000 to $100,000, while payments made to child care facilities for employee services will increase from $5,000 to $10,000. Additionally, the cap for purchasing child care slots will also double from $50,000 to $100,000.

The bill also revises the percentage of tax credits available based on the quality rating of child care facilities. The credit for a five-star facility will increase from 20% to 50%, for a four-star facility from 15% to 40%, for a three-star facility from 10% to 30%, and for a two-star facility from 5% to 20%. The credit for one-star or non-participating facilities remains at 0%. These changes will take effect for taxable periods beginning on or after January 1, 2026.

Statutes affected:
SB233 Original: 47:6102(7), 47:6107(A)(1)