HB358 Summary

• Establishes an employer tax credit equal to 75% of eligible childcare expenses (100% for small businesses with fewer than 25 employees) for tax years 2025-2027, capped at $600,000 per employer annually, with aggregate limits of $15-20 million per year.

• Creates a facility tax credit for childcare providers based on quality rating and number of eligible children served, ranging from $1,000-$2,000 per eligible child monthly, capped at $5 million annually.

• Authorizes the Department of Human Resources to award grants up to $50,000 per nonprofit childcare provider annually (maximum $5 million aggregate) for construction, expansion, repair, or operation of childcare facilities.

• Requires at least 25% of tax credits and grants be reserved for small businesses, employers, or childcare providers operating in rural areas, with unused reserved funds reverting for allocation to other applicants by the close of the second quarter.

• Becomes effective January 1, 2025, with legislation to be reviewed before extension based on usage reports from the Department of Revenue and workforce participation impact data from the Department of Labor and Department of Commerce.