HB 2187

H-2595.1
  HOUSE BILL 2187
State of Washington  69th Legislature  2026 Regular Session
By Representatives Penner, Eslick,       Schmidt,     Dufault,   Jacobsen,
Mendoza, Graham, Couture, and Schmick
Prefiled 12/23/25.    Read first time 01/12/26.     Referred to Committee
on Finance.
1      AN ACT Relating to supporting employers providing child care
2  assistance to employees by establishing a business and occupation and
3  public utility tax credit; adding a new section to chapter 82.04 RCW;
4  adding a new section to chapter 82.16 RCW; creating new sections; and
5  providing expiration dates.
6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
7     NEW SECTION. Sec. 1. (1) The legislature finds that the lack of
8 affordable   child   care   is  a   primary   barrier  to   workforce
9 participation, particularly for employees of small and mid-sized
10 businesses.
11     (2) The legislature recognizes that while large corporations
12 often have the resources to provide on-site child care, small
13 businesses are at a competitive disadvantage.
14     (3) Therefore, it is the intent of this act to establish a five-
15 year pilot program to incentivize employer-supported child care. The
16 legislature intends to cap the total fiscal impact of this tax credit
17 program to ensure budget stability while explicitly authorizing and
18 encouraging small businesses to pool their resources through child
19 care consortiums.
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1     NEW SECTION.   Sec. 2.   A new section is added to chapter 82.04
2 RCW to read as follows:
3     (1) Beginning January 1, 2027, a person is allowed a credit
4 against the tax imposed in this chapter equal to 50 percent of the
5 amount paid by the employer to a registered child care provider or
6 child care facility for the care of a dependent or dependents of one
7 or more employees.
8     (a) During calendar years 2027 and 2028, credit eligibility is
9 limited to:
10     (i) Employers with fewer than 100 full-time equivalent employees;
11 or
12     (ii) Employers participating in a child care consortium as
13 defined in subsection (10) of this section.
14     (b) Beginning January 1, 2029, credit eligibility is open to any
15 qualifying person.
16     (2) The credit claimed may not exceed the tax that would
17 otherwise be due under this chapter. Refunds may not be granted in
18 place of credits. Any amount of credit earned under this section not
19 claimed by the person in one calendar year may be carried forward for
20 no more than one calendar year immediately following the year that
21 the credit was earned.
22     (3) For persons part of a child care consortium, the tax credit
23 must be claimed by a member of the consortium based on the member's
24 specific financial contribution to the consortium's total cost of
25 child care assistance, subject to the individual cap in subsection
26 (4) of this section.
27     (4) The total credit amount approved by this section may not
28 exceed $50,000 for each person claiming the credit in a calendar
29 year.
30     (5) The total amount of credits authorized under this section may
31 not exceed an annual statewide limit of $5,000,000 per calendar year.
32 Credits must be authorized on a first-in-time basis. The department
33 must publish a notice on its website when the cap is reached.
34     (6) No application is necessary for the tax credit. The person
35 must keep records necessary for the department to verify eligibility
36 under this section.
37     (7) To claim a credit under this section, a person must
38 electronically file with the department all returns, forms, and other
39 information the department requires in an electronic format as
40 provided and approved by the department. Any return, form, or
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1 information required to be filed in electronic format under this
2 section is not filed until received by the department in an
3 electronic format. For purposes of this subsection, "returns" has the
4 same meaning as "return" in RCW 82.32.050.
5     (8) No person may claim a credit against taxes due under both
6 this chapter and chapter 82.16 RCW for the same child care assistance
7 costs.
8     (9) No credit may be claimed under this section after January 1,
9 2032.
10     (10) For the purpose of this section, "child care consortium"
11 means:
12     (a) Two or more employers that form a child care partnership in
13 order to pool monetary resources to purchase child care services or
14 to contract for slots at a licensed child care facility for the
15 benefit of their employees; or
16     (b) A local chamber of commerce, downtown association, or
17 economic development council acting as a lead for a partnership of
18 employers that form a child care partnership in order to pool
19 monetary resources to purchase child care services or to contract for
20 slots at a licensed child care facility for the benefit of their
21 employees.
22     (11) This section expires January 1, 2033.
23     NEW SECTION.   Sec. 3.   A new section is added to chapter 82.16
24 RCW to read as follows:
25     (1) Beginning January 1, 2027, a person is allowed a credit
26 against the tax imposed in this chapter equal to 50 percent of the
27 amount paid by the employer to a registered child care provider or
28 child care facility for the care of a dependent or dependents of one
29 or more employees.
30     (a) During calendar years 2027 and 2028, credit eligibility is
31 limited to:
32     (i) Employers with fewer than 100 full-time equivalent employees;
33 or
34     (ii) Employers participating in a child care consortium as
35 defined in subsection (10) of this section.
36     (b) Beginning January 1, 2029, credit eligibility is open to any
37 qualifying person.
38     (2) The credit claimed may not exceed the tax that would
39 otherwise be due under this chapter. Refunds may not be granted in
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1 place of credits. Any amount of credit earned under this section not
2 claimed by the person in one calendar year may be carried forward for
3 no more than one calendar year immediately following the year that
4 the credit was earned.
5     (3) For persons part of a child care consortium, the tax credit
6 must be claimed by a member of the consortium based on the member's
7 specific financial contribution to the consortium's total cost of
8 child care assistance, subject to the individual cap in subsection
9 (4) of this section.
10     (4) The total credit amount approved by this section may not
11 exceed $50,000 for each person claiming the credit in a calendar
12 year.
13     (5) The total amount of credits authorized under this section may
14 not exceed an annual statewide limit of $5,000,000 per calendar year.
15 Credits must be authorized on a first-in-time basis. The department
16 must publish a notice on its website when the cap is reached.
17     (6) No application is necessary for the tax credit. The person
18 must keep records necessary for the department to verify eligibility
19 under this section.
20     (7) To claim a credit under this section, a person must
21 electronically file with the department all returns, forms, and other
22 information the department requires in an electronic format as
23 provided and approved by the department. Any return, form, or
24 information required to be filed in electronic format under this
25 section is not filed until received by the department in an
26 electronic format. For purposes of this subsection, "returns" has the
27 same meaning as "return" in RCW 82.32.050.
28     (8) No person may claim a credit against taxes due under both
29 this chapter and chapter 82.04 RCW for the same child care assistance
30 costs.
31     (9) No credit may be claimed under this section after January 1,
32 2032.
33     (10) For the purpose of this section, "child care consortium"
34 means:
35     (a) Two or more employers that form a child care partnership in
36 order to pool monetary resources to purchase child care services or
37 to contract for slots at a licensed child care facility for the
38 benefit of their employees; or
39     (b) A local chamber of commerce, downtown association, or
40 economic development council acting as a lead for a partnership of
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1  employers that form a child care partnership in order to pool
2  monetary resources to purchase child care services or to contract for
3  slots at a licensed child care facility for the benefit of their
4  employees.
5      (11) This section expires January 1, 2033.
6     NEW SECTION.   Sec. 4.   (1) This section is the tax preference
7 performance statement for the tax preferences contained in sections 1
8 and 2, chapter . . ., Laws of 2026 (sections 1 and 2 of this act).
9 This performance statement is only intended to be used for subsequent
10 evaluation of the tax preferences. It is not intended to create a
11 private right of action by any party or to be used to determine
12 eligibility for preferential tax treatment.
13     (2) The legislature categorizes these tax preferences as ones
14 intended to induce certain designated behavior by taxpayers, as
15 indicated in RCW 82.32.808(2)(a), and to provide tax relief for
16 certain   businesses    or   individuals,   as   indicated    in  RCW
17 82.32.808(2)(e).
18     (3) It is the legislature's specific public policy objective to
19 provide reduced tax liability for businesses that provide child care
20 for their employees.
21     (4) If a review finds that the total number of child care slots
22 supported by employers claiming the credit in this act has increased
23 year-over-year during the first two years of the credit's existence,
24 then the legislature intends to extend the expiration date of the tax
25 preferences.
26     (5) In order to obtain the data necessary to perform the review
27 in subsection (4) of this section, the joint legislative audit and
28 review committee may refer to any data collected by the state.
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