The proposed bill amends the Income Tax Act of 1967 by adding a new section, 272b, which introduces a tax credit for qualified taxpayers. Starting from tax years beginning on or after January 1, 2025, taxpayers can claim a credit of $2,500 for each qualified dependent aged between 4 and 6 years old, provided that an exemption was claimed for that dependent in the same tax year. However, the bill limits the number of dependents for which a credit can be claimed to a maximum of three per tax year.

Additionally, if the credit exceeds the taxpayer's tax liability, the excess amount will be refunded. The bill defines key terms such as "earned income," "qualifying child," "qualified dependent," and "qualified taxpayer," with the latter being defined as a taxpayer with earned income of at least $10,000 for the tax year. This legislation aims to provide financial relief to families with young children by offering a substantial tax credit.

Statutes affected:
House Introduced Bill: 206.1, 206.847