AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO THE CHILD CARE AND DEPENDENT CARE EXPENSE TAX CREDIT.

Plain English Breakdown

The official status indicates the bill passed both chambers and reached final enrollment, but no effective date is listed beyond the tax year provision.

Changes to Delaware Child Care Tax Credit

This bill doubles a tax credit for child care expenses for residents with taxable income under $60,000 and makes that specific portion of the credit refundable.

What This Bill Does

• Increases the child care expense tax credit from 50% to 100% of the federal amount for residents with taxable income less than $60,000.
• Makes this increased credit refundable so taxpayers can receive a payment even if they owe no state taxes.
• Keeps the current 50% tax credit rate unchanged for residents with taxable income of $60,000 or more.

Who It Names or Affects

• Delaware resident individuals who have child care expenses and a taxable income under $60,000.
• Spouses who file joint federal returns but choose to calculate Delaware taxes separately.

Terms To Know

Refundable credit

A tax benefit that allows a taxpayer to receive money back if the credit amount is larger than their state tax bill.

Taxable income

The specific amount of earnings used by this law to decide which tax rate applies, with $60,000 as the cutoff point.

Limits and Unknowns

• This change only applies to tax years starting after December 31, 2025.
• The credit amount cannot be larger than the federal child care expense credit allowed for that year.
• For married couples filing separately in Delaware but jointly with the IRS, the refundable part of the credit is limited to the tax owed by the spouse with lower income.

Official Summary Text

AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO THE CHILD CARE AND DEPENDENT CARE EXPENSE TAX CREDIT.
This Act doubles the child care and dependent care expense tax credit for resident individuals with taxable income of less than $60,000.00 and makes that credit refundable. For those individuals with taxable income of $60,000 or more, the credit is unchanged.

Current Bill Text

Legislation Document

SPONSOR:

Rep. Yearick & Rep. Berry & Sen. Hocker

Reps. Gray, Hilovsky, Michael Smith; Sens. Buckson, Hoffner, Wilson

HOUSE OF REPRESENTATIVES

153rd GENERAL ASSEMBLY

HOUSE BILL NO. 284

AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO THE CHILD CARE AND DEPENDENT CARE EXPENSE TAX CREDIT.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend § 1114, Title 30 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 1114. Child care and dependent care expense credit.

(a) A resident individual

with taxable income of less than $60,000

shall be entitled to a

refundable

credit against that individual’s tax otherwise due under this chapter in the amount of

50 percent

100%

of the child and dependent care expense credit allowable for federal income tax purposes for the same tax year.

In no event shall the allowable credit under this subsection exceed the tax otherwise due under this chapter.

(b) A resident individual with taxable income of $60,000 or more shall be entitled to a credit against that individual’s tax otherwise due under this chapter of 50% of the child and dependent care expense credit allowable for federal income tax purposes for the same tax year. In no event shall the allowable credit under this subsection exceed the tax otherwise due under this chapter.

(b)

(c)

In the case of spouses who file a joint federal return but who elect to determine their Delaware taxes separately, the

refundable

credit allowed pursuant to this subsection may only be applied against the tax imposed on the spouse with the lower taxable income, computed without regard to such credit

, and shall not exceed such tax.

Section 2. This Act shall become effective for tax years beginning after December 31, 2025.

SYNOPSIS

This Act doubles the child care and dependent care expense tax credit for resident individuals with taxable income of less than $60,000.00 and makes that credit refundable. For those individuals with taxable income of $60,000 or more, the credit is unchanged.