IN SB0263

Creates a refundable state income tax credit for child and dependent care expenses for taxpayers with adjusted gross income at or below 250% of the federal poverty level

Credit amount equals 20% of employment-related care expenses, capped at $1,000 for incomes up to 185% of poverty level, decreasing to $200 for incomes between 233-250% of poverty level

Employment-related expenses must be paid for care of a qualifying individual to enable the taxpayer to work, excluding overnight camps and services not complying with state/local laws

Credit is fully refundable, meaning taxpayers receive the excess as a refund if the credit exceeds their state tax liability

Effective January 1, 2026 (retroactive) for taxable years beginning after December 31, 2025