Providing an income tax credit for contributions to a child care provider or intermediary.

Session of 2025
HOUSE BILL No. 2078
By Committee on Taxation
Requested by Representative Thompson on behalf of Representative Buehler
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AN ACT concerning income taxation; relating to credits; providing an
income tax credit for contributions to a child care provider or
intermediary.
Be it enacted by the Legislature of the State of Kansas:
Section 1. (a) The provisions of this section shall be known and may
be cited as the child care contribution tax credit act.
(b) For taxable year 2026, and all tax years thereafter, there shall be
allowed a credit against the tax liability imposed under the Kansas income
tax act for the tax year that a verified contribution was made in an amount
equal to 75% of the verified contributions to a child care provider or
intermediary. The amount of such credit awarded under this section for
each taxpayer shall not exceed $200,000 per tax year. In no event shall the
total amount of credits allowed under this section exceed $20,000,000 for
each tax year. Any unused credit amounts may be carried forward for up to
six taxable years immediately following the taxable year for which the
credits were allowed.
(c) (1) The child care provider or intermediary shall apply to the
department of revenue to participate in the program established in this
section using a form prescribed by the department. The department shall
determine eligibility. Only contributions to a child care provider and
intermediary that have entered into an agreement with the department may
receive a tax credit pursuant to this section.
(2) The child care provider or intermediary receiving a contribution
shall, within 60 days of the date of receiving the contribution, file a
contribution verification with the department and issue a copy of the
contribution verification to the taxpayer. The contribution verification shall
be in the form established by the department and shall include the
taxpayer's name, taxpayer's state or federal tax identification number or
last four digits of the taxpayer's social security number, amount of tax
credit sought, amount or description of contribution, legal name and
address of the child care provider or intermediary receiving the
contribution, the child care provider's or intermediary's federal employer
identification number, the child care provider's license number, the date
that the child care provider or intermediary received the contribution from
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the taxpayer and any other information requested by the department. The
contribution verification shall include a signed attestation stating, in the
case of a child care provider, that the child care provider will use the
contribution solely to promote child care and, in the case of an
intermediary, that the intermediary will distribute the contribution and any
income thereon in full to one or more child care providers within two years
of receipt of the contribution.
(3) The failure of the child care provider or intermediary to timely
issue the contribution verification to the taxpayer or file the contribution
verification with the department shall entitle the taxpayer to a refund of the
contribution from the child care provider or intermediary.
(d) A contribution, whether received from the taxpayer claiming the
tax credit pursuant to this section or from an intermediary, is eligible
when:
(1) The contribution is used directly by a child care provider to
promote child care for children 12 years of age or younger, including by
acquiring or improving child care facilities, equipment or services, staff
salaries, staff training or improving the quality of child care;
(2) the contribution, if made to an intermediary, is distributed in full
by the intermediary within two years of receipt to one or more child care
providers for the sole purpose of promoting child care for children 12
years of age or younger;
(3) the contribution is made to a child care provider or intermediary
in which the taxpayer or a person related to the taxpayer does not have a
direct financial interest;
(4) the contribution made to an intermediary is not designated for a
child care provider in which the taxpayer or a person related to the
taxpayer has a direct financial interest; and
(5) the contribution is not made in exchange for care of a child or
children, unless the contribution is made by an employer in purchasing
child care for the children of the employer's employees.
(e) A child care provider or intermediary that uses the contribution for
an ineligible purpose shall repay to the department the value of the tax
credit for the contribution amount used for an ineligible purpose. An
intermediary that accepts a contribution and issues a taxpayer a
contribution verification is permanently ineligible to claim or redeem a tax
credit pursuant to this section.
(f) As used in this section:
(1) "Child care provider" means a person operating a child care
facility as defined in K.S.A. 65-503, and amendments thereto.
(2) "Intermediary" means a nonprofit organization that distributes
funds for the purposes of supporting a child care provider.
(3) "Person" means the same as defined in K.S.A. 65-503, and
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amendments thereto.
(4) "Person related to the taxpayer" means an individual connected to
the taxpayer by blood, adoption or marriage, or an individual, corporation,
partnership, limited liability company, trust or association controlled by, or
under the control of, the taxpayer directly or through an individual,
corporation, limited liability company, partnership, trust or association
under the control of the taxpayer.
Sec. 2. This act shall take effect and be in force from and after its
publication in the statute book.
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