H.B. 1203 - Employer Child Care Tax Credit

• Establishes an employer child care tax credit allowing employers to deduct from income tax liability either a percentage of child care operation costs or a percentage of costs for employer-sponsored child care at facilities within reasonable distance from the workplace.

• Credits for operational costs may be carried forward for five years and cannot exceed 50% of the taxpayer's income tax liability; partnerships, S corporations, estates, and trusts may claim credits for entity-level costs.

• Provides a separate 10-year credit for qualified child care property (real and tangible personal property) placed in service after December 31, 1999, allowing 100% of property costs to be claimed at 10% per year over ten years, with a three-year carryforward period.

• Requires qualified child care facilities to be licensed by the Department of Human Services with at least 95% of users being children of the employer's employees, and includes recapture provisions if property is disposed of or ceases qualifying use within 14 years (ranging from 100% recapture within five years to 0% after 14 years).

• Effective June 30, 3000, applying to taxable years beginning after December 31, 2022; requires taxpayers to maintain detailed schedules documenting property costs, credits claimed, carryovers, and recapture events.