H.B. 1049 Summary

• Increases the child and dependent care tax credit applicable percentage to 50% reduced by one percentage point for each $3,000 of adjusted gross income exceeding $150,000, with a floor of 25%.

• Increases the cap on employment-related expenses for the child and dependent care tax credit from $2,400 to $10,000 for one qualifying individual and from $4,800 to $20,000 for two or more qualifying individuals.

• Establishes annual cost-of-living adjustments to the $150,000 threshold amount for the child and dependent care tax credit, effective for taxable years after December 31, 2023.

• Increases the refundable earned income tax credit from 20% to 40% of the federal earned income tax credit allowed under section 32 of the Internal Revenue Code.

• Increases income thresholds and credit amounts for the refundable food/excise tax credit and sunsets all three tax credits on December 31, 2028.