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New business tax credit could help Kansas child care crisis

Kansas has 86,607 children without licensed child care. It is not the total number of children, nor the number of children under 6 years old. This is the number of children under the age of 6 who live in households where both parents (or the only one) work full time and cannot even find childcare. if they can afford it.

It’s safe to say we have a crisis on our hands.

Amid reports of high-profile legislative battles — with high stakes for Kansas families — a small but important policy passed without much fanfare: an expansion of the Employer Child Care Tax Credit.

With Governor Kelly signing HB 2237, all Kansas businesses can apply to receive a state income tax credit to help their employees with child care costs or if the business helps provide childcare herself. This program has existed since 1993, but credit has only been available to large companies and financial institutions for about ten years.

Most Kansans are familiar with the 2012 tax bill saga and subsequent state budget crises. The elimination of this small business credit was part of this bill, as lawmakers completely removed most small businesses from the tax rolls.

Removing eligibility for the credit made sense at the time—why would a business that doesn’t owe tax need a tax credit? But unfortunately, the policy has not changed over time. When the legislature restored the business income tax in 2017, it did not restore eligibility for this credit as a result.

That brings us to this legislative session. After a few rounds of legislative Whack-A-Mole, lawmakers have found a host of other tax credits that could house this small but mighty provision.

Once the credit takes effect on July 1, 2022, Kansas businesses can apply to deduct from their state income taxes a portion of the childcare expenses they incur — like providing childcare services. childcare to employees or help employees pay for other childcare services – going back to January 2021.

Although there is only $3 million available to claim each year, it is still important for lawmakers to modernize this credit so that more businesses can benefit from it. With the average cost of child care per child – particularly infant care – in Kansas at $680 per month in a home care setting and $1,259 per month in a center, parents need ‘aid.

This Bill Begins to Correct an Inequity in the Tax Code and Levels the Playing Field So Small Businesses Can Attract and Retain Employees, Parents Can Cover Child Care Costs, and Kids Can Stay in stable and stimulating environments.

We hope that by providing a financial incentive to do so, more Kansas businesses will recognize how their employees benefit from reliable, high-quality child care and choose to support them financially. For years, parents and providers have maintained the childcare system with gum and good intentions, and it’s high time for the rest of us to prioritize this investment in future generations. from Kansan.

Thank you to the Legislative Assembly and Governor Kelly for supporting the children and families of Kansas. Much more needs to be done to address the child care crisis in our state, such as increasing funding for this valuable program. We look forward to building on this foundation with you.

Mitch Rucker is the Early Learning Policy Advisor for Kansas Action for Children.