NC S178

Reenacts G.S. 105-151.11 as G.S. 105-153.11 to restore a child care tax credit that had expired, allowing taxpayers a credit against North Carolina state income tax for employment-related child care expenses.

Credits are calculated as a percentage of qualifying employment-related expenses based on filing status and adjusted gross income, with two different percentage tiers depending on whether dependents are seven years or older and capable of self-care.

Percentage A (lower rates of 7%-9%) applies to expenses for children seven years and older who can care for themselves; Percentage B (higher rates of 10%-13%) applies to younger children or those unable to care for themselves.

Maximum claimable expenses are $3,000 per year for one qualifying individual and $6,000 per year for multiple qualifying individuals, reduced by any employer-provided dependent care assistance excluded from gross income.

Effective for taxable years beginning on or after January 1, 2021.