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S.F. No. 1110 - Child care workforce, supply, and quality credit (as proposed to be amended by A-1)
 
Author: Senator Paul T. Anderson
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: March 1, 2019



 

This bill establishes a refundable tax credit for payments to child care facilities, and for child care professionals and child care providers. Effective beginning in tax year 2020.

Section 1. Subd. 1. Credit for child care facility. Provides a credit for payments made for child care at a qualifying child care facility. The credit increases according to the quality rating (issued by DHS) of the facility:

  • 25% of amount paid to a one-star facility, up to $500 for one child and $1,000 for two or more children;
  • 50% of amount paid to a two-star facility, up to $650 for one child and $1,300 for two or more children;
  • 100% of amount paid to a three-star facility, up to $850 for one child and $1,700 for two or more children; and
  • 150% of amount paid to a four-star facility, up to $1,050 for one child and $2,100 for two or more children.

Subd. 2. Credit for child care professionals. Provides a credit for child care professionals. The credit may be claimed for employment at only one child care facility in tax year. The credit increases according to the career lattice step (assigned by a state registry tool) of the professional as of the end of the tax year:

  • $500 for a professional with a career lattice step equivalent to child development associate;
  • $1,500 for a professional with a career lattice step representing an associate’s degree; and
  • $3,000 for a professional with a career lattice step representing a bachelor’s degree.

Subd. 3. Credit for child care providers. Provides a credit for child care providers equal to the average number of eligible children attending a child care facility, multiplied by an amount based on the quality rating of the facility. An eligible child is one who was homeless, in foster care, in need of child protective services, received funds through a child care assistance or early learning scholarship program, or had a parent under age 21 who was pursuing a high school degree or equivalency degree. The multipliers are: 

  • $500 per child for a one-star facility;
  • $1,000 per child for a two-star facility;
  • $1,500 per child for a three-star facility; and
  • $2,000 per child for a four-star facility; 

Subd. 4. Definitions. Provides definitions for the terms used in the credit.

Subd. 5. Allocation. Requires the credit to be allocated for nonresidents and part-year residents in a formula determined under current law.

Subd. 6. Credit refundable. Provides that the credits are refundable for each entity.

Subd. 7. Partnerships; multiple owners. Requires that the credit must be passed through on a pro-rata basis to partners, members, shareholders, or owners. A C corporation that is a partner in a partnership is limited to the lesser of the credit under subd. 2 or 5, or an amount computed based on the share of the tax attributable to the portion of taxable income allocable to the corporation’s interest in the entity.

Subd. 8. Appropriation. Appropriates an amount sufficient to pay the refunds authorized in subd. 6.

 
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