S 3471: Establishes business franchise, personal income and insurance franchise tax credits for the expenses of employer provided or sponsored child care.

  
  STATE OF NEW YORK ________________________________________________________________________ 3471 2025-2026 Regular Sessions  IN SENATE January 27, 2025 ___________ Introduced by Sens. HELMING, ASHBY, BORRELLO, CANZONERI-FITZPATRICK, GRIFFO, STEC, TEDISCO, WEBER -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations AN ACT to amend the tax law, in relation to establishing business fran- chise, personal income and insurance franchise tax credits for employ- er provided or sponsored child care The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The tax law is amended by adding a new section 50 to read 2 as follows: 3 § 50. Employer provided or sponsored child care. (a) Definitions. For 4 the purposes of this section, the following terms shall have the follow- 5 ing meanings: 6 (1) "Cost of operation" means any reasonable direct operational costs 7 incurred by an employer as a result of providing employer provided or 8 employer sponsored child care facilities; provided, however, that such 9 term shall exclude the cost of any property that is qualified child care 10 property. 11 (2) "Employer" means a taxpayer who is an employer upon whom taxes are 12 imposed pursuant to article nine-A, twenty-two or thirty-three of this 13 chapter. 14 (3) "Employer provided" means child care offered on the premises of an 15 employer. 16 (4) "Employer sponsored" means a contractual arrangement with a child 17 care facility that is paid for by an employer. 18 (5) "Premises of the employer" means a workplace premises of an 19 employer, within the state, providing the child care, or by one employer 20 providing the child care in the event that the child care property is 21 owned jointly or severally by such employer and one or more employers; 22 provided, however, that if such workplace premises are impracticable or EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07357-01-5 
 S. 3471 2 1 otherwise unsuitable for the on-site location of a child care facility, 2 as determined by the office of children and family services, or in 3 cities of one million or more, the city department of health and mental 4 hygiene, such facility may be located within a reasonable distance of 5 the premises of the employer. 6 (6) "Qualified child care property" includes, but is not limited to, 7 amounts expended on land acquisition, improvements, buildings, and 8 building improvements and furniture, fixtures, and equipment, and means 9 all real property and tangible personal property purchased or acquired 10 on or after January first, two thousand twenty-five, or which property 11 is first placed in service on or after January first, two thousand twen- 12 ty-five, for use exclusively in the construction, expansion, improvement 13 or operation of an employer provided child care facility, but only if: 14 (A) the facility is licensed or commissioned by the office of children 15 and family services pursuant to section three hundred ninety of the 16 social services law, or in cities of one million or more, the city 17 department of health and mental hygiene pursuant to article forty-seven 18 of the health code of the city of New York. 19 (B) at least ninety-five percent of the children who use the facility 20 are children of employees of: 21 (i) the employer and other employers in the event that the child care 22 property is owned jointly or severally by the employer and one or more 23 other employers; or 24 (ii) a corporation that is a member of the taxpayer's "affiliated 25 group" within the meaning of section 1504(a) of the Internal Revenue 26 Code. 27 (C) the employer has not previously claimed any tax credit for the 28 cost of operation for such qualified child care property placed in 29 service prior to taxable years beginning on or after January first, two 30 thousand twenty-five. 31 (b) Allowance of credit. A tax credit against the taxes imposed pursu- 32 ant to articles nine-A, twenty-two and thirty-three of this chapter 33 shall be granted to an employer who provides or sponsors child care for 34 employees. Such tax credit shall be in an amount equal to ten percent of 35 the cost of operation incurred by the employer, and such credit shall 36 not exceed ten thousand dollars less any amounts paid by employees 37 during the taxable year. 38 (c) Conditions and limitations. The tax credit allowed under subdivi- 39 sion (b) of this section shall be subject to the following conditions 40 and limitations: 41 (1) the employer shall certify to the department the names of the 42 employees, the name of the child care provider, the number of children 43 served by care subsidized via this tax credit, the number of children 44 receiving care who are excluded from the tax credit pursuant to para- 45 graph three of this subdivision, and such other information as may be 46 required by the department to ensure that credits are granted only to 47 employers who provide or sponsor approved child care in accordance with 48 this section; 49 (2) only in the case of employer sponsored care, the average credit 50 utilized per child shall not exceed the market rate per child estab- 51 lished by the office of children and family services for the social 52 services district within which child care is provided; and 53 (3) the employer shall not receive any tax credit for care provided to 54 the children of any employee whose annual household income exceeds two 55 hundred thousand dollars. The department shall establish rules and 56 accounting measures to ensure that any costs of care provided to employ- 
 S. 3471 3 1 ees with annual household incomes exceeding two hundred thousand dollars 2 are itemized by the employer and excluded from the tax credit provided 3 to employers pursuant to this section. 4 (d) Election. In addition to the tax credit provided under subdivision 5 (b) of this section, an employer shall be granted a credit against the 6 tax for the taxable year in which the employer first places in service 7 qualified child care property. The credit shall equal twenty percent of 8 the cost of all qualified child care property purchased or acquired by 9 the employer and first placed in service during a taxable year. Such 10 credit shall not exceed twenty thousand dollars. 11 (e) Carryover. The tax credit allowed under subdivision (d) of this 12 section shall be subject to the following conditions and limitations: 13 (1) any such credit claimed in any taxable year but not used in such 14 taxable year may be carried forward for three years from the close of 15 such taxable year. The sale, merger, acquisition or bankruptcy of any 16 employer shall not create new eligibility for the credit in any succeed- 17 ing taxpayer; 18 (2) in no event shall the amount of any such tax credit, including any 19 carryover of such credit from a prior taxable year, exceed fifty percent 20 of the employer's tax liability as determined without regard to any 21 other credits; and 22 (3) for every year in which an employer claims such credit, the 23 employer shall attach a schedule, whose form and structure shall be 24 established by the department, to the employer's tax return setting 25 forth the following information with respect to such tax credit: 26 (A) a description of the child care facility; 27 (B) the amount of qualified child care property acquired during the 28 taxable year and the cost of such property; 29 (C) the amount of tax credit claimed for the taxable year; 30 (D) the amount of qualified child care property acquired in prior 31 taxable years and the cost of such property; 32 (E) any tax credit utilized by the employer in prior taxable years; 33 (F) the amount of tax credit carried over from prior years; 34 (G) the amount of tax credit utilized by the employer in the current 35 taxable year; 36 (H) the amount of tax credit to be carried forward to subsequent tax 37 years; and 38 (I) a description of any recapture event occurring during the taxable 39 year, a calculation of the resulting reduction in tax credits allowable 40 for the recapture year and future taxable years, and a calculation of 41 the resulting increase in tax for the recapture year. 42 (f) Recapture. 43 (1) If the taxpayer disposes of the qualified child care property, or 44 if such property ceases to be a qualified child care property except 45 for: 46 (A) any transfer by reason of death; 47 (B) any transfer between spouses or incident to divorce; 48 (C) any transaction to which section 381(a) of the internal revenue 49 code applies; 50 (D) any change in the form of conducting the employer's trade or busi- 51 ness so long as the property is retained by such trade or business as 52 qualified child care property and the employer retains a substantial 53 interest in such trade or business; or 54 (E) any accident or casualty, the taxpayer's tax imposed by this arti- 55 cle for the taxable year in which such disposition or cessation occurs 
 S. 3471 4 1 shall be increased by the recapture portion of the credit allowed under 2 paragraph two of this subdivision for all prior taxable years. 3 (2) For purposes of paragraph one of this subdivision, the recapture 4 portion shall reduce the credit otherwise allowable under subdivision 5 (d) of this section, but shall not, at any point, reduce the tax credit 6 below zero. Any excess of the recapture amount shall result in an equiv- 7 alent increase in the tax imposed under this section. 8 (g) Rules. The commissioner shall promulgate any rules and regulations 9 necessary to implement and administer the provisions of this section. 10 (h) Cross-references. For the application of the credit provided in 11 this section, see the following provisions of this chapter: 12 (1) article 9-A: section 210-B, subdivision 61; 13 (2) article 22: section 606, subsection (bbb); 14 (3) article 33: section 1511, subdivision (ff). 15 § 2. Section 210-B of the tax law is amended by adding a new subdivi- 16 sion 61 to read as follows: 17 61. Employer provided or sponsored child care credit. (a) Allowance of 18 credit. A taxpayer will be allowed a credit, to be computed as provided 19 in section fifty of this chapter, against the taxes imposed by this 20 article. 21 (b) Application of credit. The credit allowed under this subdivision 22 for any taxable year will not reduce the tax due for such year to less 23 than the amount prescribed in paragraph (d) of subdivision one of 24 section two hundred ten of this article. However, if the amount of cred- 25 it allowed under this subdivision for any taxable year reduces the tax 26 to such amount or if the taxpayer otherwise pays tax based on the fixed 27 dollar minimum amount, any amount of credit thus not deductible in such 28 taxable year will be treated as an overpayment of tax to be credited or 29 refunded in accordance with the provisions of section one thousand 30 eighty-six of this chapter. Provided, however, the provisions of 31 subsection (c) of section one thousand eighty-eight of this chapter 32 notwithstanding, no interest will be paid thereon. 33 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 34 of the tax law is amended by adding a new clause (lii) to read as 35 follows: 36 (lii) Employer Amount of credit 37 provided or sponsored under subdivision 38 child care credit sixty-one of 39 under subsection section two hundred 40 (bbb) ten-B 41 § 4. Section 606 of the tax law is amended by adding a new subsection 42 (bbb) to read as follows: 43 (bbb) Employer provided or sponsored child care credit. (1) Allowance 44 of credit. A taxpayer shall be allowed a credit, to be computed as 45 provided in section fifty of this chapter, against the tax imposed by 46 this article. 47 (2) Application of credit. If the amount of the credit allowed under 48 this subsection for any taxable year exceeds the taxpayer's tax for such 49 year, the excess will be treated as an overpayment of tax to be credited 50 or refunded in accordance with the provisions of section six hundred 51 eighty-six of this article, provided, however, that no interest will be 52 paid thereon. 53 § 5. Section 1511 of the tax law is amended by adding a new subdivi- 54 sion (ff) to read as follows: 
 S. 3471 5 1 (ff) Employer provided or sponsored child care credit. (1) Allowance 2 of credit. A taxpayer will be allowed a credit, to be computed as 3 provided in section fifty of this chapter, against the taxes imposed by 4 this article. 5 (2) Application of credit. The credit allowed under this subdivision 6 for any taxable year will not reduce the tax due for such year to less 7 than the minimum tax fixed by this article. However, if the amount of 8 credit allowed under this subdivision for any taxable year reduces the 9 tax to such amount, any amount of credit thus not deductible in such 10 taxable year will be treated as an overpayment of tax to be credited or 11 refunded in accordance with the provisions of section one thousand 12 eighty-six of this chapter. Provided, however, the provisions of 13 subsection (c) of section one thousand eighty-eight of this chapter 14 notwithstanding, no interest will be paid thereon. 15 § 6. This act shall take effect immediately and shall apply to taxable 16 years commencing on or after January 1, 2025.