This bill amends Section 2357 of Title 68 of the Oklahoma Statutes to introduce new tax credits related to child care expenses and qualifying children. For tax years 2008 through 2026, it allows a credit of 20% of the federal child care expenses credit or 5% of the child tax credit, whichever is greater, for resident individuals, part-year residents, or nonresident members of the Armed Forces. The maximum credit is prorated based on the ratio of Oklahoma adjusted gross income to federal adjusted gross income, and taxpayers with a federal adjusted gross income exceeding $100,000 are ineligible for this credit.

Starting in tax year 2027, the bill establishes a new credit for qualifying children under the age of 19, allowing $500 per child for individual taxpayers with an adjusted gross income of $70,000 or less, with a gradual reduction for incomes above that threshold. Taxpayers with incomes exceeding $100,000 are not eligible for this credit. The bill also requires the inclusion of spousal income for those filing separately and stipulates that any excess credit beyond the tax owed will be refunded to the taxpayer. The act is set to take effect on November 1, 2026.