STATE OF NEW YORK
________________________________________________________________________
8943
IN SENATE
August 26, 2020
___________
Introduced by Sens. HELMING, SERINO -- read twice and ordered printed,
and when printed to be committed to the Committee on Rules
AN ACT to amend the tax law, in relation to establishing business fran-
chise, personal income and insurance franchise tax credits for employ-
er provided or sponsored child care
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The tax law is amended by adding a new section 45 to read
2 as follows:
3 § 45. Employer provided or sponsored child care. (a) Definitions. For
4 the purposes of this section, the following terms shall have the follow-
5 ing meanings:
6 (1) "Cost of operation" means any reasonable direct operational costs
7 incurred by an employer as a result of providing employer provided or
8 employer sponsored child care facilities; provided, however, that such
9 term shall exclude the cost of any property that is qualified child care
10 property.
11 (2) "Employer" means a taxpayer who is an employer upon whom taxes are
12 imposed pursuant to article nine-A, twenty-two or thirty-three of this
13 chapter.
14 (3) "Employer provided" means child care offered on the premises of an
15 employer.
16 (4) "Employer sponsored" means a contractual arrangement with a child
17 care facility that is paid for by an employer.
18 (5) "Premises of the employer" means a workplace premises of an
19 employer, within the state, providing the child care, or by one employer
20 providing the child care in the event that the child care property is
21 owned jointly or severally by such employer and one or more employers;
22 provided, however, that if such workplace premises are impracticable or
23 otherwise unsuitable for the on-site location of a child care facility,
24 as determined by the office of children and family services, or in
25 cities of one million or more, the city department of health and mental
26 hygiene, such facility may be located within a reasonable distance of
27 the premises of the employer.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14865-01-0
S. 8943 2
1 (6) "Qualified child care property" includes, but is not limited to,
2 amounts expended on land acquisition, improvements, buildings, and
3 building improvements and furniture, fixtures, and equipment, and means
4 all real property and tangible personal property purchased or acquired
5 on or after January first, two thousand twenty, or which property is
6 first placed in service on or after January first, two thousand twenty,
7 for use exclusively in the construction, expansion, improvement or oper-
8 ation of an employer provided child care facility, but only if:
9 (A) the facility is licensed or commissioned by the office of children
10 services pursuant to section three hundred ninety of the social services
11 law, or in cities of one million or more, the city department of health
12 and mental hygiene pursuant to article forty-seven of the health code of
13 the city of New York.
14 (B) at least ninety-five percent of the children who use the facility
15 are children of employees of:
16 (i) the employer and other employers in the event that the child care
17 property is owned jointly or severally by the employer and one or more
18 other employers; or
19 (ii) a corporation that is a member of the taxpayer's "affiliated
20 group" within the meaning of section 1504(a) of the Internal Revenue
21 Code.
22 (C) the employer has not previously claimed any tax credit for the
23 cost of operation for such qualified child care property placed in
24 service prior to taxable years beginning on or after January first, two
25 thousand twenty.
26 (b) Allowance of credit. A tax credit against the taxes imposed pursu-
27 ant to articles nine-A, twenty-two and thirty-three of this chapter
28 shall be granted to an employer who provides or sponsors child care for
29 employees. Such tax credit shall be in an amount equal to ten percent of
30 the cost of operation incurred by the employer, and such credit shall
31 not exceed ten thousand dollars less any amounts paid by employees
32 during the taxable year.
33 (c) Conditions and limitations. The tax credit allowed under subdivi-
34 sion (b) of this section shall be subject to the following conditions
35 and limitations:
36 (1) the employer shall certify to the department the names of the
37 employees, the name of the child care provider, the number of children
38 served by care subsidized via this tax credit, the number of children
39 receiving care who are excluded from the tax credit pursuant to para-
40 graph three of this subdivision, and such other information as may be
41 required by the department to ensure that credits are granted only to
42 employers who provide or sponsor approved child care in accordance with
43 this section;
44 (2) only in the case of employer sponsored care, the average credit
45 utilized per child shall not exceed the market rate per child estab-
46 lished by the office of children and family services for the social
47 services district within which child care is provided; and
48 (3) the employer shall not receive any tax credit for care provided to
49 the children of any employee whose annual household income exceeds two
50 hundred thousand dollars. The department shall establish rules and
51 accounting measures to ensure that any costs of care provided to employ-
52 ees with annual household incomes exceeding two hundred thousand dollars
53 are itemized by the employer and excluded from the tax credit provided
54 to employers pursuant to this section.
55 (d) Election. In addition to the tax credit provided under subdivision
56 (b) of this section, an employer shall be granted a credit against the
S. 8943 3
1 tax for the taxable year in which the employer first places in service
2 qualified child care property. The credit shall equal twenty percent of
3 the cost of all qualified child care property purchased or acquired by
4 the employer and first placed in service during a taxable year. Such
5 credit shall not exceed twenty thousand dollars.
6 (e) Carryover. The tax credit allowed under subdivision (d) of this
7 section shall be subject to the following conditions and limitations:
8 (1) any such credit claimed in any taxable year but not used in such
9 taxable year may be carried forward for three years from the close of
10 such taxable year. The sale, merger, acquisition or bankruptcy of any
11 employer shall not create new eligibility for the credit in any succeed-
12 ing taxpayer;
13 (2) in no event shall the amount of any such tax credit, including any
14 carryover of such credit from a prior taxable year, exceed fifty percent
15 of the employer's tax liability as determined without regard to any
16 other credits; and
17 (3) for every year in which an employer claims such credit, the
18 employer shall attach a schedule, whose form and structure shall be
19 established by the department, to the employer's tax return setting
20 forth the following information with respect to such tax credit:
21 (A) a description of the child care facility;
22 (B) the amount of qualified child care property acquired during the
23 taxable year and the cost of such property;
24 (C) the amount of tax credit claimed for the taxable year;
25 (D) the amount of qualified child care property acquired in prior
26 taxable years and the cost of such property;
27 (E) any tax credit utilized by the employer in prior taxable years;
28 (F) the amount of tax credit carried over from prior years;
29 (G) the amount of tax credit utilized by the employer in the current
30 taxable year;
31 (H) the amount of tax credit to be carried forward to subsequent tax
32 years; and
33 (I) a description of any recapture event occurring during the taxable
34 year, a calculation of the resulting reduction in tax credits allowable
35 for the recapture year and future taxable years, and a calculation of
36 the resulting increase in tax for the recapture year.
37 (f) Recapture.
38 (1) If the taxpayer disposes of the qualified child care property, or
39 if such property ceases to be a qualified child care property except
40 for:
41 (A) any transfer by reason of death;
42 (B) any transfer between spouses or incident to divorce;
43 (C) any transaction to which section 381(a) of the internal revenue
44 code applies;
45 (D) any change in the form of conducting the employer's trade or busi-
46 ness so long as the property is retained by such trade or business as
47 qualified child care property and the employer retains a substantial
48 interest in such trade or business; or
49 (E) any accident or casualty, the taxpayer's tax imposed by this arti-
50 cle for the taxable year in which such disposition or cessation occurs
51 shall be increased by the recapture portion of the credit allowed under
52 paragraph two of this subdivision for all prior taxable years.
53 (2) For purposes of paragraph one of this subdivision, the recapture
54 portion shall reduce the credit otherwise allowable under subdivision
55 (d) of this section, but shall not, at any point, reduce the tax credit
S. 8943 4
1 below zero. Any excess of the recapture amount shall result in an equiv-
2 alent increase in the tax imposed under this section.
3 (g) Rules. The commissioner shall promulgate any rules and regulations
4 necessary to implement and administer the provisions of this section.
5 (h) Cross-references. For the application of the credit provided in
6 this section, see the following provisions of this chapter:
7 (1) article 9-A: section 210-B, subdivision 28;
8 (2) article 22: section 606, subsection (kkk);
9 (3) article 33: section 1511, subdivision (ee).
10 § 2. Section 210-B of the tax law is amended by adding a new subdivi-
11 sion 28 to read as follows:
12 28. Employer provided or sponsored child care credit. (a) Allowance of
13 credit. A taxpayer will be allowed a credit, to be computed as provided
14 in section forty-five of this chapter, against the taxes imposed by this
15 article.
16 (b) Application of credit. The credit allowed under this subdivision
17 for any taxable year will not reduce the tax due for such year to less
18 than the amount prescribed in paragraph (d) of subdivision one of
19 section two hundred ten of this article. However, if the amount of cred-
20 it allowed under this subdivision for any taxable year reduces the tax
21 to such amount or if the taxpayer otherwise pays tax based on the fixed
22 dollar minimum amount, any amount of credit thus not deductible in such
23 taxable year will be treated as an overpayment of tax to be credited or
24 refunded in accordance with the provisions of section one thousand
25 eighty-six of this chapter. Provided, however, the provisions of
26 subsection (c) of section one thousand eighty-eight of this chapter
27 notwithstanding, no interest will be paid thereon.
28 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
29 of the tax law is amended by adding a new clause (xlvi) to read as
30 follows:
31 (xlvi) EmployerAmount of credit
32 provided or sponsoredunder subdivision
33 child care credittwenty-eight of
34 under subsectionsection two hundred
35 (kkk)ten-B
36 § 4. Section 606 of the tax law is amended by adding a new subsection
37 (kkk) to read as follows:
38 (kkk) Employer provided or sponsored child care credit. (1) Allowance
39 of credit. A taxpayer shall be allowed a credit, to be computed as
40 provided in section forty-five of this chapter, against the tax imposed
41 by this article.
42 (2) Application of credit. If the amount of the credit allowed under
43 this subsection for any taxable year exceeds the taxpayer's tax for such
44 year, the excess will be treated as an overpayment of tax to be credited
45 or refunded in accordance with the provisions of section six hundred
46 eighty-six of this article, provided, however, that no interest will be
47 paid thereon.
48 § 5. Section 1511 of the tax law is amended by adding a new subdivi-
49 sion (ee) to read as follows:
50 (ee) Employer provided or sponsored child care credit. (1) Allowance
51 of credit. A taxpayer will be allowed a credit, to be computed as
52 provided in section forty-five of this chapter, against the taxes
53 imposed by this article.
S. 8943 5
1 (2) Application of credit. The credit allowed under this subdivision
2 for any taxable year will not reduce the tax due for such year to less
3 than the minimum tax fixed by this article. However, if the amount of
4 credit allowed under this subdivision for any taxable year reduces the
5 tax to such amount, any amount of credit thus not deductible in such
6 taxable year will be treated as an overpayment of tax to be credited or
7 refunded in accordance with the provisions of section one thousand
8 eighty-six of this chapter. Provided, however, the provisions of
9 subsection (c) of section one thousand eighty-eight of this chapter
10 notwithstanding, no interest will be paid thereon.
11 § 6. This act shall take effect immediately and shall apply to taxable
12 years commencing on or after January 1, 2020.