Child care assist./B&O tax

AN ACT Relating to supporting employers providing child care 1
assistance to employees by establishing a business and occupation and 2
public utility tax credit; adding a new section to chapter 82.04 RCW; 3
adding a new section to chapter 82.16 RCW; creating a new section; 4
and providing expiration dates. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
NEW SECTION. Sec. 1. A new section is added to chapter 82.04 7
RCW to read as follows: 8
(1) Beginning January 1, 2026, a person is allowed a credit 9
against the tax imposed in this chapter equal to 100 percent of the 10
costs related to providing child care assistance to employees.11
(2) The credit claimed may not exceed the tax that would 12
otherwise be due under this chapter. Refunds may not be granted in 13
place of credits. Any amount of credit earned under this section not 14
claimed by the taxpayer in one calendar year may be carried forward 15
for no more than one calendar year immediately following the year 16
that the credit was earned. 17
(3) No person may claim a credit against taxes due under both 18
this chapter and chapter 82.16 RCW for the same child care assistance 19
costs. 20
H-0287.2
HOUSE BILL 1564
State of Washington 69th Legislature 2025 Regular Session
By Representatives Penner, Hill, Bernbaum, Nance, Dent, Schmidt,
Barkis, Abbarno, Couture, Springer, and Ormsby
Read first time 01/23/25. Referred to Committee on Finance.
p. 1 HB 1564
(4) The department must administer the credit. To claim a credit 1
under this section, the person applying must complete an application 2
for credit based on qualifying expenditures incurred by the eligible 3
person the previous calendar year. The department must rule on 4
applications within 60 days of receipt. The department may extend the 5
time of processing an application upon notice to the person and by 6
providing the person an explanation of why the application processing 7
cannot be completed on time. 8
(5) To claim a credit under this section, a person must 9
electronically file with the department all returns, forms, and other 10
information the department requires in an electronic format as 11
provided and approved by the department. Any return, form, or 12
information required to be filed in electronic format under this 13
section is not filed until received by the department in an 14
electronic format. For purposes of this subsection, "returns" has the 15
same meaning as "return" in RCW 82.32.050. 16
(6) For purposes of this section, "child care assistance" means:17
(a) The portion of an employee's salary or wage that is provided 18
by the employer to the employee to be used to offset the employee's 19
expenses related to child care, including tuition; and20
(b) Expenses related to the costs for the employer to provide in-21
house child care for employees. 22
(7) Credits may be earned under this section until January 1, 23
2037. 24
(8) This section expires January 1, 2038. 25
NEW SECTION. Sec. 2. A new section is added to chapter 82.16 26
RCW to read as follows: 27
(1) Beginning January 1, 2026, a person is allowed a credit 28
against the tax imposed in this chapter equal to 100 percent of the 29
costs related to providing child care assistance to employees.30
(2) The credit claimed may not exceed the tax that would 31
otherwise be due under this chapter. Refunds may not be granted in 32
place of credits. Any amount of credit earned under this section not 33
claimed by the taxpayer in one calendar year may be carried forward 34
for no more than one calendar year immediately following the year 35
that the credit was earned. 36
(3) No person may claim a credit against taxes due under both 37
this chapter and chapter 82.04 RCW for the same child care assistance 38
costs. 39
p. 2 HB 1564
(4) The department must administer the credit. To claim a credit 1
under this section, the person applying must complete an application 2
for credit based on qualifying expenditures incurred by the eligible 3
person the previous calendar year. The department must rule on 4
applications within 60 days of receipt. The department may extend the 5
time of processing an application upon notice to the person and by 6
providing the person an explanation of why the application processing 7
cannot be completed on time. 8
(5) To claim a credit under this section, a person must 9
electronically file with the department all returns, forms, and other 10
information the department requires in an electronic format as 11
provided and approved by the department. Any return, form, or 12
information required to be filed in electronic format under this 13
section is not filed until received by the department in an 14
electronic format. For purposes of this subsection, "returns" has the 15
same meaning as "return" in RCW 82.32.050. 16
(6) For purposes of this section, "child care assistance" means:17
(a) The portion of an employee's salary or wage that is provided 18
by the employer to the employee to be used to offset the employee's 19
expenses related to child care, including tuition; and20
(b) Expenses related to the costs for the employer to provide in-21
house child care for employees. 22
(7) Credits may be earned under this section until January 1, 23
2037. 24
(8) This section expires January 1, 2038. 25
NEW SECTION. Sec. 3. (1) This section is the tax preference 26
performance statement for the tax preferences contained in sections 1 27
and 2, chapter . . ., Laws of 2025 (sections 1 and 2 of this act). 28
This performance statement is only intended to be used for subsequent 29
evaluation of the tax preferences. It is not intended to create a 30
private right of action by any party or to be used to determine 31
eligibility for preferential tax treatment.32
(2) The legislature categorizes these tax preferences as ones 33
intended to provide tax relief for certain businesses or individuals, 34
as indicated in RCW 82.32.808(2)(e). 35
(3) It is the legislature's specific public policy objective to 36
provide reduced tax liability for businesses that provide child care 37
assistance for employees. 38
p. 3 HB 1564
(4) If a review finds that the tax preferences increase the 1
number of businesses in the state that provide child care assistance 2
for employees by 15 percent, then the legislature intends to extend 3
the expiration date of the tax preferences. 4
(5) In order to obtain the data necessary to perform the review 5
in subsection (4) of this section, the joint legislative audit and 6
review committee may refer to any data collected by the state.7
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p. 4 HB 1564