Authorize tax credits for certain child care expenditures

As Introduced

136th
General Assembly

Regular
Session
H. B. No. 167

2025-2026

Representative White, A.

A
BILL

To
amend sections 5725.98, 5726.98, 5729.98, 5747.98, and 5751.98 and to
enact sections
5725.39
,

5726.62
,
5727.242, 5727.301,
5729.22
,
5736.51,
5747.87
,
and 5751.56 of the Revised Code
to
authorize nonrefundable tax credits for certain employer-provided
child care expenditures.

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

Section
1.
That
sections 5725.98, 5726.98, 5729.98, 5747.98, and 5751.98 be amended
and sections
5725.39
,

5726.62
,
5727.242, 5727.301,
5729.22
,
5736.51,
5747.87
,
and 5751.56 of the Revised Code be enacted to read as follows:

Sec.
5725.39.
(A)
As used in this section, "tax credit certificate" has the
same meaning as in section 5751.56 of the Revised Code.

(B)
A domestic insurance company issued a tax credit certificate
authorizing the company to claim a credit against the tax levied
under section 5725.18 of the Revised Code may claim a credit against
that tax equal to the amount stated in the certificate. The credit
shall be claimed for the calendar year preceding the year the
certificate was issued and in the order required by section 5725.98
of the Revised Code. Any credit amount in excess of the company's tax
liability, after allowing for any other credits preceding the credit
in that order, may be carried forward for not more than five ensuing
years, but the amount of the excess credit claimed against the tax
for any year shall be deducted from the balance carried forward to
the next year.

Sec.
5725.98.
(A)
To provide a uniform procedure for calculating the amount of tax
imposed by section 5725.18 of the Revised Code that is due under this
chapter, a taxpayer shall claim any credits and offsets against tax
liability to which it is entitled in the following order:

The
credit for an insurance company or insurance company group under
section 5729.031 of the Revised Code;

The
credit for eligible employee training costs under section 5725.31 of
the Revised Code;

The
credit for purchasers of qualified low-income community investments
under section 5725.33 of the Revised Code;

The
nonrefundable job retention credit under division (B) of section
122.171 of the Revised Code;

The
nonrefundable credit for investments in rural business growth funds
under section 122.152 of the Revised Code;

The
nonrefundable Ohio low-income housing tax credit under section
5725.36 of the Revised Code;

The
nonrefundable affordable single-family home credit under section
5725.37 of the Revised Code;

The
nonrefundable credit for contributing capital to a transformational
mixed use development project under section 5725.35 of the Revised
Code;

The
nonrefundable credit for employer-provided child care expenses under
section 5725.39 of the Revised Code;

The
offset of assessments by the Ohio life and health insurance guaranty
association permitted by section 3956.20 of the Revised Code;

The
refundable credit for rehabilitating a historic building under
section 5725.34 of the Revised Code;

The
refundable credit for Ohio job retention under former division (B)(2)
or (3) of section 122.171 of the Revised Code as those divisions
existed before September 29, 2015, the effective date of the
amendment of this section by H.B. 64 of the 131st general assembly;

The
refundable credit for Ohio job creation under section 5725.32 of the
Revised Code;

The
refundable credit under section 5725.19 of the Revised Code for
losses on loans made under the Ohio venture capital program under
sections 150.01 to 150.10 of the Revised Code.

(B)
For any credit except the refundable credits enumerated in this
section, the amount of the credit for a taxable year shall not exceed
the tax due after allowing for any other credit that precedes it in
the order required under this section. Any excess amount of a
particular credit may be carried forward if authorized under the
section creating that credit. Nothing in this chapter shall be
construed to allow a taxpayer to claim, directly or indirectly, a
credit more than once for a taxable year.

Sec.
5726.62.
(A)
As used in this section, "tax credit certificate" has the
same meaning as in section 5751.56 of the Revised Code.

(B)
A taxpayer issued a tax credit certificate authorizing the taxpayer
to claim a credit against the tax levied under section 5726.02 of the
Revised Code may claim a credit against that tax equal to the amount
stated in the certificate. The credit shall be claimed for the
taxable year preceding the year in which the certificate is issued
and in the order required by section 5726.98 of the Revised Code. Any
credit amount in excess of the taxpayer's tax liability, after
allowing for any other credits preceding the credit in that order,
may be carried forward for not more than five ensuing years, but the
amount of the excess credit claimed against the tax for any year
shall be deducted from the balance carried forward to the next year.

Sec.
5726.98.
(A)
To provide a uniform procedure for calculating the amount of tax due
under section 5726.02 of the Revised Code, a taxpayer shall claim any
credits to which the taxpayer is entitled under this chapter in the
following order:

The
nonrefundable job retention credit under division (B) of section
5726.50 of the Revised Code;

The
nonrefundable credit for purchases of qualified low-income community
investments under section 5726.54 of the Revised Code;

The
nonrefundable credit for qualified research expenses under section
5726.56 of the Revised Code;

The
nonrefundable credit for qualifying dealer in intangibles taxes under
section 5726.57 of the Revised Code;

The
nonrefundable Ohio low-income housing tax credit under section
5726.58 of the Revised Code;

The
nonrefundable affordable single-family home credit under section
5726.60 of the Revised Code;

The
nonrefundable welcome home Ohio (WHO) program credit under section
122.633 of the Revised Code;

The
nonrefundable credit for employer-provided child care expenses under
section 5726.62 of the Revised Code;

The
refundable credit for rehabilitating an historic building under
section 5726.52 of the Revised Code;

The
refundable job retention or job creation credit under division (A) of
section 5726.50 of the Revised Code;

The
refundable credit under section 5726.53 of the Revised Code for
losses on loans made under the Ohio venture capital program under
sections 150.01 to 150.10 of the Revised Code;

The
refundable motion picture and broadway theatrical production credit
under section 5726.55 of the Revised Code;

The
refundable credit for film and theater capital improvement projects
under section 5726.59 of the Revised Code.

(B)
For any credit except the refundable credits enumerated in this
section, the amount of the credit for a taxable year shall not exceed
the tax due after allowing for any other credit that precedes it in
the order required under this section. Any excess amount of a
particular credit may be carried forward if authorized under the
section creating that credit. Nothing in this chapter shall be
construed to allow a taxpayer to claim, directly or indirectly, a
credit more than once for a taxable year.

Sec.
5727.242.
(A)
As used in this section:

(1)
"Tax credit certificate" has the same meaning as in section
5751.56 of the Revised Code.

(2)
"Taxpayer" means any person subject to the tax levied under
section 5727.24 of the Revised Code.

(B)
A taxpayer issued a tax credit certificate authorizing the taxpayer
to claim a credit against the tax levied under section 5727.24 of the
Revised Code may claim a credit against that tax equal to the amount
stated in the certificate. The credit shall be claimed on the first
return due under section 5727.25 of the Revised Code after the
certificate is issued and after the credits authorized in sections
5727.241 and 5727.29 of the Revised Code. Any credit amount in excess
of the taxpayer's tax liability, after allowing for any other credits
preceding the credit in that order, may be carried forward for not
more than five ensuing years, but the amount of the excess credit
claimed against the tax for any year shall be deducted from the
balance carried forward to the next year.

Sec.
5727.301.
(A)
As used in this section:

(1)
"Tax credit certificate" has the same meaning as in section
5751.56 of the Revised Code.

(2)
"Taxpayer" means any person subject to the tax levied under
section 5727.30 of the Revised Code.

(B)
A taxpayer issued a tax credit certificate authorizing the taxpayer
to claim a credit against the tax levied under section 5727.30 of the
Revised Code may claim a credit against that tax equal to the amount
stated in the certificate. The credit shall be claimed on the first
report due under section 5727.31 of the Revised Code after the
certificate is issued and after the credit authorized in section
5727.29 of the Revised Code. Any credit amount in excess of the
taxpayer's tax liability, after allowing for the preceding credit,
may be carried forward for not more than five ensuing years, but the
amount of the excess credit claimed against the tax for any year
shall be deducted from the balance carried forward to the next year.

Sec.
5729.22.
(A)
As used in this section, "tax credit certificate" has the
same meaning as in section 5751.56 of the Revised Code.

(B)
A foreign insurance company issued a tax credit certificate
authorizing the company to claim a credit against the tax levied
under section 5729.03 of the Revised Code may claim a credit against
that tax equal to the amount stated in the certificate. The credit
shall be claimed for the calendar year preceding the year in which
the certificate is issued and in the order required by section
5729.98 of the Revised Code. Any credit amount in excess of the
company's tax liability, after allowing for any other credits
preceding the credit in that order, may be carried forward for not
more than five ensuing years, but the amount of the excess credit
claimed against the tax for any year shall be deducted from the
balance carried forward to the next year.

(C)
A foreign insurance company shall not be required to pay any
additional tax levied under section 5729.06 of the Revised Code as a
result of claiming the tax credit authorized under this section.

Sec.
5729.98.
(A)
To provide a uniform procedure for calculating the amount of tax due
under this chapter, a taxpayer shall claim any credits and offsets
against tax liability to which it is entitled in the following order:

The
credit for an insurance company or insurance company group under
section 5729.031 of the Revised Code;

The
credit for eligible employee training costs under section 5729.07 of
the Revised Code;

The
credit for purchases of qualified low-income community investments
under section 5729.16 of the Revised Code;

The
nonrefundable job retention credit under division (B) of section
122.171 of the Revised Code;

The
nonrefundable credit for investments in rural business growth funds
under section 122.152 of the Revised Code;

The
nonrefundable Ohio low-income housing tax credit under section
5729.19 of the Revised Code;

The
nonrefundable affordable single-family home credit under section
5729.20 of the Revised Code;

The
nonrefundable credit for contributing capital to a transformational
mixed use development project under section 5729.18 of the Revised
Code;

The
nonrefundable credit for employer-provided child care expenses under
section 5729.22 of the Revised Code;

The
offset of assessments by the Ohio life and health insurance guaranty
association against tax liability permitted by section 3956.20 of the
Revised Code;

The
refundable credit for rehabilitating a historic building under
section 5729.17 of the Revised Code;

The
refundable credit for Ohio job retention under former division (B)(2)
or (3) of section 122.171 of the Revised Code as those divisions
existed before September 29, 2015, the effective date of the
amendment of this section by H.B. 64 of the 131st general assembly;

The
refundable credit for Ohio job creation under section 5729.032 of the
Revised Code;

The
refundable credit under section 5729.08 of the Revised Code for
losses on loans made under the Ohio venture capital program under
sections 150.01 to 150.10 of the Revised Code.

(B)
For any credit except the refundable credits enumerated in this
section, the amount of the credit for a taxable year shall not exceed
the tax due after allowing for any other credit that precedes it in
the order required under this section. Any excess amount of a
particular credit may be carried forward if authorized under the
section creating that credit. Nothing in this chapter shall be
construed to allow a taxpayer to claim, directly or indirectly, a
credit more than once for a taxable year.

Sec.
5736.51.
(A)
As used in this section, "tax credit certificate" has the
same meaning as in section 5751.56 of the Revised Code.

(B)
A taxpayer issued a tax credit certificate authorizing the taxpayer
to claim a credit against the tax levied under section 5736.02 of the
Revised Code may claim a credit against that tax equal to the amount
stated in the certificate. The credit shall be claimed for the tax
period preceding the tax period in which the certificate is issued
and after any credit authorized in section 5736.50 of the Revised
Code. Any credit amount in excess of the taxpayer's tax liability may
be carried forward for not more than five ensuing years, but the
amount of the excess credit claimed against the tax for any year
shall be deducted from the balance carried forward to the next year.

Sec.
5747.87.
(A)
As used in this section, "tax credit certificate" has the
same meaning as in section 5751.56 of the Revised Code.

(B)
There is allowed a refundable credit against a taxpayer's aggregate
tax liability under section 5747.02 of the Revised Code equal to the
amount stated in a tax credit certificate, to the extent the
certificate authorizes the credit to be claimed against that tax
liability. The credit shall be claimed for the taxable year preceding
the taxable year in which the certificate is issued and in the order
required by section 5747.98 of the Revised Code. Any credit amount in
excess of the taxpayer's tax liability, after allowing for any other
credits preceding the credit in that order, may be carried forward
for not more than five ensuing years, but the amount of the excess
credit claimed against the tax for any year shall be deducted from
the balance carried forward to the next year.

Nothing
in this section limits or disallows pass-through treatment of the
credit if the person to which the certificate is issued is a
pass-through entity.

Sec.
5747.98.
(A)
To provide a uniform procedure for calculating a taxpayer's aggregate
tax liability under section 5747.02 of the Revised Code, a taxpayer
shall claim any credits to which the taxpayer is entitled in the
following order:

Either
the retirement income credit under division (B) of section 5747.055
of the Revised Code or the lump sum retirement income credits under
divisions (C), (D), and (E) of that section;

Either
the senior citizen credit under division (F) of section 5747.055 of
the Revised Code or the lump sum distribution credit under division
(G) of that section;

The
dependent care credit under section 5747.054 of the Revised Code;

The
credit for displaced workers who pay for job training under section
5747.27 of the Revised Code;

The
campaign contribution credit under section 5747.29 of the Revised
Code;

The
twenty-dollar personal exemption credit under section 5747.022 of the
Revised Code;

The
joint filing credit under division
(G)

(E)

of
section 5747.05 of the Revised Code;

The
earned income credit under section 5747.71 of the Revised Code;

The
nonrefundable credit for education expenses under section 5747.72 of
the Revised Code;

The
nonrefundable credit for donations to scholarship granting
organizations under section 5747.73 of the Revised Code;

The
nonrefundable credit for tuition paid to a nonchartered nonpublic
school under section 5747.75 of the Revised Code;

The
nonrefundable vocational job credit under section 5747.057 of the
Revised Code;

The
nonrefundable job retention credit under division (B) of section
5747.058 of the Revised Code;

The
enterprise zone credit under section 5709.66 of the Revised Code;

The
credit for beginning farmers who participate in a financial
management program under division (B) of section 5747.77 of the
Revised Code;

The
credit for commercial vehicle operator training expenses under
section 5747.82 of the Revised Code;

The
nonrefundable welcome home Ohio (WHO) program credit under section
122.633 of the Revised Code;

The
nonrefundable credit for employer-provided child care expenses under
section 5747.87 of the Revised Code;

The
credit for selling or renting agricultural assets to beginning
farmers under division (A) of section 5747.77 of the Revised Code;

The
credit for purchases of qualifying grape production property under
section 5747.28 of the Revised Code;

The
small business investment credit under section 5747.81 of the Revised
Code;

The
nonrefundable lead abatement credit under section 5747.26 of the
Revised Code;

The
opportunity zone investment credit under section 122.84 of the
Revised Code;

The
enterprise zone credits under section 5709.65 of the Revised Code;

The
research and development credit under section 5747.331 of the Revised
Code;

The
credit for rehabilitating a historic building under section 5747.76
of the Revised Code;

The
nonrefundable Ohio low-income housing tax credit under section
5747.83 of the Revised Code;

The
nonrefundable affordable single-family home credit under section
5747.84 of the Revised Code;

The
nonresident credit under division (A) of section 5747.05 of the
Revised Code;

The
credit for a resident's out-of-state income under division (B) of
section 5747.05 of the Revised Code;

The
refundable motion picture and broadway theatrical production credit
under section 5747.66 of the Revised Code;

The
refundable credit for film and theater capital improvement projects
under section 5747.67 of the Revised Code;

The
refundable jobs creation credit or job retention credit under
division (A) of section 5747.058 of the Revised Code;

The
refundable credit for taxes paid by a qualifying entity granted under
section 5747.059 of the Revised Code;

The
refundable credits for taxes paid by a qualifying pass-through entity
granted under division (I) of section 5747.08 of the Revised Code;

The
refundable credit under section 5747.80 of the Revised Code for
losses on loans made to the Ohio venture capital program under
sections 150.01 to 150.10 of the Revised Code;

The
refundable credit for rehabilitating a historic building under
section 5747.76 of the Revised Code;

The
refundable credit under section 5747.39 of the Revised Code for taxes
levied under section 5747.38 of the Revised Code paid by an electing
pass-through entity.

(B)
For any credit, except the refundable credits enumerated in this
section and the credit granted under division (H) of section 5747.08
of the Revised Code, the amount of the credit for a taxable year
shall not exceed the taxpayer's aggregate amount of tax due under
section 5747.02 of the Revised Code, after allowing for any other
credit that precedes it in the order required under this section. Any
excess amount of a particular credit may be carried forward if
authorized under the section creating that credit. Nothing in this
chapter shall be construed to allow a taxpayer to claim, directly or
indirectly, a credit more than once for a taxable year.

Sec.
5751.56.
(A)
As used in this section:

(1)
"Eligible expenses" means both of the following:

(a)
Any amount that would qualify as a qualified child care expenditure
under section 45F of the Internal Revenue Code, without regard to any
limitation under that section on the amount of expenses allowable;

(b)
Any amount paid by an employer to an employee for the provision of
child care at a licensed child care program, as that term is defined
in section 5104.01 of the Revised Code, for children of the employee.

(2)
"Tax credit certificate" means a certificate issued by the
tax commissioner under division (B) of this section.

(B)
An employer that incurs eligible expenses during the preceding
calendar year may submit an application to the tax commissioner for a
credit authorized by this section. The application shall be made on a
form and in a manner that the commissioner shall prescribe. The
application shall state the amount of such eligible expenses, the tax
against which the credit will be claimed, and any other information
the commissioner may require. An employer shall submit the
application on or before the fifteenth day of January.

The
commissioner shall evaluate applications in the order in which they
are received and issue a determination. If the commissioner denies an
application, the determination shall state the reason for the denial.
If the commissioner approves an application, the determination shall
include a certificate listing the amount of credit that the applicant
may claim and the tax against which it may be claimed. The amount of
a credit authorized by this section shall equal the lesser of five
hundred thousand dollars or the amount of eligible expenses the
employer incurred in the preceding calendar year.

(C)
An employer may claim a nonrefundable credit against the tax imposed
under section 5725.18, 5726.02, 5727.24, 5727.30, 5729.03, 5736.02,
5747.02, or 5751.02 of the Revised Code, as authorized by the tax
credit certificate, equal to the amount listed on that certificate.
The credit shall be claimed in the manner prescribed by division (D)
of this section or by section 5725.39, 5726.62, 5727.242, 5727.301,
5729.22, 5736.51, or 5747.87 of the Revised Code, as applicable.

(D)
A taxpayer issued a tax credit certificate authorizing the taxpayer
to claim a credit against the tax levied under section 5751.02 of the
Revised Code may claim a credit against that tax equal to the amount
stated in the certificate. The credit shall be claimed for the tax
period preceding the tax period in which the certificate is issued
and in the order required by section 5751.98 of the Revised Code. Any
credit amount in excess of the taxpayer's tax liability, after
allowing for any other credits preceding the credit in that order,
may be carried forward for not more than the nineteen ensuing tax
periods, but the amount of the excess credit claimed against the tax
for any tax period shall be deducted from the balance carried forward
to the next tax period.

Sec.
5751.98.
(A)
To provide a uniform procedure for calculating the amount of tax due
under this chapter, a taxpayer shall claim any credits to which it is
entitled in the following order:

The
nonrefundable jobs retention credit under division (B) of section
5751.50 of the Revised Code;

The
nonrefundable credit for employer-provided child care expenses under
section 5751.56 of the Revised Code;

The
nonrefundable credit for qualified research expenses under division
(B) of section 5751.51 of the Revised Code;

The
nonrefundable credit for a borrower's qualified research and
development loan payments under division (B) of section 5751.52 of
the Revised Code;

The
nonrefundable credit for calendar years 2010 to 2029 for unused net
operating losses under division (B) of section 5751.53 of the Revised
Code;

The
refundable motion picture and broadway theatrical production credit
under section 5751.54 of the Revised Code;

The
refundable credit for film and theater capital improvement projects
under section 5751.55 of the Revised Code;

The
refundable jobs creation credit or job retention credit under
division (A) of section 5751.50 of the Revised Code;

The
refundable credit for calendar year 2030 for unused net operating
losses under division (C) of section 5751.53 of the Revised Code.

(B)
For any credit except the refundable credits enumerated in this
section, the amount of the credit for a tax period shall not exceed
the tax due after allowing for any other credit that precedes it in
the order required under this section. Any excess amount of a
particular credit may be carried forward if authorized under the
section creating the credit.

Section
2.
That
existing sections 5725.98, 5726.98, 5729.98, 5747.98, and 5751.98 of
the Revised Code are hereby repealed.

Section
3.
The
enactment by this act of sections 5725.39, 5726.62, 5727.242,
5727.301, 5729.22, 5736.51, 5747.87, and 5751.56 of the Revised Code
applies to applications submitted as described in section 5751.56 of
the Revised Code on or after the first day of the first January
following the effective date of this section.