59-10-1048. Nonrefundable tax credits for employer-provider child care.

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Effective 1/1/2026

(1)As used in this section:

(a)"Eligible small business" means the same as that term is defined in Section 45F, Internal Revenue Code.

(b)"Qualified child care expenditure" means the same as that term is defined in Section 59-7-627 .

(c)"Qualified child care facility" means the same as that term is defined in Section 59-7-627 .

(d)"Qualified construction expenditure" means the same as that term is defined in Section 59-7-627 .

(e)"Qualifying claimant" means a claimant, estate, or trust that:

(i)is an employer;

(ii)qualifies for and claims the federal employer-provided child care tax credit described in Section 45F, Internal Revenue Code, for the current taxable year; and

(iii)does not obtain payment from an employee or deduct from an employee's salary or wages for child care services, with respect to any qualified child care facility for which the claimant, estate, or trust claims a tax credit under this section.

(f)"Recapture event" means the same as that term is defined in Section 59-7-627 .

(g)"Third party provider" means the same as that term is defined in Section 59-7-627 .

(a)A qualifying claimant may claim a nonrefundable tax credit equal to 20% of the qualified construction expenditures the qualifying claimant incurred during the taxable year.

(b)A qualifying claimant may carry forward, to the next five taxable years, the amount of the qualifying claimant's tax credit described in this Subsection

(2)that exceeds the qualifying claimant's income tax liability for the taxable year.

(a)A qualifying claimant may claim a nonrefundable tax credit equal to:

(i)30% of the qualified child care expenditures the qualifying claimant incurred during the taxable year, for a qualifying claimant that qualifies as an eligible small business for the taxable year; or

(ii)10% of the qualified child care expenditures the qualifying claimant incurred during the taxable year, for a qualifying claimant that does not qualify as an eligible small business for the taxable year.

(b)A qualifying claimant may not carry forward or carry back the tax credit described in this Subsection

(3)that exceeds the qualifying claimant's income tax liability for the taxable year.

(i)If a recapture event happens within two taxable years after the first taxable year in which the qualifying claimant claims a tax credit under this section, a qualifying claimant shall repay 100% of the tax credit a qualifying claimant receives under this section for any taxable year.

(ii)If a recapture event happens more than two taxable years but fewer than three taxable years after the first taxable year in which the qualifying claimant claims a tax credit under this section, a qualifying claimant shall repay 75% of the tax credit a qualifying claimant receives under this section for any taxable year.

(iii)If a recapture event happens more than three taxable years but fewer than four taxable years after the first taxable year in which the qualifying claimant claims a tax credit under this section, a qualifying claimant shall repay 50% of the tax credit a qualifying claimant receives under this section for any taxable year.

(iv)If a recapture event happens more than four taxable years but fewer than five taxable years after the first taxable year in which the qualifying claimant claims a tax credit under this section, a qualifying claimant shall repay 25% of the tax credit a qualifying claimant receives under this section for any taxable year.

(b)A qualifying claimant shall make a payment for a recapture event for the taxable year in which the recapture event occurs.

Amended by Chapter 455 , 2026 General Session