This legislative bill amends Nebraska's tax code to redefine and clarify terms related to the allocation, transfer, sale, and assignment of tax credits under the Affordable Housing Tax Credit Act and the Child Care Tax Credit Act. A significant addition is the term "pass-through entity," which includes partnerships, limited liability companies, and S corporations, enabling these entities to allocate tax credits among their partners or shareholders. The bill also expands the uses of tax credits under the Child Care Tax Credit Act and harmonizes various provisions across the tax code. It specifies that insurance companies and financial institutions will receive credits under both tax credit acts and establishes that the changes will apply to taxable years beginning on or after January 1, 2024. Additionally, it allows unused tax credits to be carried forward to future tax years.

Moreover, the bill introduces a nonrefundable tax credit for taxpayers making qualifying contributions, offering either a credit of one hundred percent or seventy-five percent of their contribution, capped at one hundred thousand dollars per taxable year. Full credit is available for contributions to eligible programs in opportunity zones or those with at least one child in the child care subsidy program, while taxpayers claiming a charitable contribution deduction for the same contribution are ineligible for this credit. The Department of Revenue is restricted from using verification information from the Department of Health and Human Services for purposes outside the Child Care Tax Credit Act. The bill also allows taxpayers to offset retaliatory taxes without incurring additional taxes from claiming the credit, amends existing regulations to recognize the Child Care Tax Credit Act alongside other tax credit acts, and outlines the application process and annual cap for credit approvals.

Statutes affected:
Introduced: 77-908, 77-2502, 77-2503, 77-2506, 77-2508, 77-3806, 77-7202, 77-7204, 81-523
Final Reading: 77-908, 77-2502, 77-2503, 77-2506, 77-2508, 77-3806, 77-7202, 77-7204, 81-523