This bill proposes the addition of a new section, 11-21-27, to the Code of West Virginia, 1931, aimed at providing tax credits for residents who incur childcare expenses. Starting from income tax years beginning January 1, 2027, individuals who claim a childcare eligible expenses credit on their federal tax return will be eligible for a corresponding credit against their state income taxes. The amount of the credit varies based on the individual's federal adjusted gross income: 50% for incomes of $30,000 or less, 30% for incomes between $30,001 and $45,000, and 20% for incomes between $45,001 and $65,000. Individuals with incomes of $65,000 or more will not qualify for this credit.

Additionally, the bill stipulates that if the credits exceed the income taxes owed, the excess amount will be refunded to the individual rather than carried forward to future tax years. It also specifies that individuals receiving childcare assistance from the Department of Health and Human Resources are only eligible for credits to the extent of their unreimbursed out-of-pocket expenses. The bill defines the "federal childcare tax credit" in reference to IRS Form 2441 and establishes that to qualify for the credit, the dependent child must be under the age of 13 at the end of the tax year.

Statutes affected:
Introduced Version: 11-21-27