HB 190

Enrolled Copy  H.B. 190
1Child Care Business Tax Credit
  2026 GENERAL SESSION
  STATE OF UTAH
  Chief Sponsor: Jason E. Thompson
  Senate Sponsor: Heidi Balderree
  Cosponsor:  Doug Fiefia  Carol S. Moss
  John Arthur  Jake Fitisemanu  Hoang Nguyen
  Melissa G. Ballard  Jon Hawkins  Clinton D. Okerlund
  Jefferson S. Burton  Sahara Hayes  Derrin R. Owens
  Tyler Clancy  Sandra Hollins  Karen M. Peterson
  Paul A. Cutler  Colin W. Jack  Candice B. Pierucci
  Jennifer Dailey-Provost  Matt MacPherson  Angela Romero
  Ariel Defay  Ashlee Matthews  Andrew Stoddard
  Rosalba Dominguez  Verona Mauga  Jordan D. Teuscher
  James A. Dunnigan  Tracy J. Miller
  Joseph Elison  Grant Amjad Miller
2
3  LONG TITLE
4  General Description:
5      This bill modifies income tax credits for employer-provided child care.
6  Highlighted Provisions:
7      This bill:
8      ▸ defines terms;
9      ▸ expands the nonrefundable corporate and individual income tax credit for
10  employer-provided child care to apply to off-site child care facilities;
11      ▸ disqualifies an employer from receiving the tax credit if the employer charges or deducts
12  pay from employees for child care services;
13      ▸ increases the tax credit amount for certain small business employers, in relation to the
H.B. 190  Enrolled Copy
14   employer's child care expenditures;
15▸ repeals the requirement for an employer to have claimed the tax credit for construction
16   expenditures in order to claim the tax credit for child care expenditures;
17▸ requires the Governor's Office of Economic Opportunity to develop and maintain a
18   webpage for employers to obtain information and resources regarding the tax credits; and
19▸ makes technical and conforming changes.
20   Money Appropriated in this Bill:
21None
22   Other Special Clauses:
23This bill provides retrospective operation.
24   Utah Code Sections Affected:
25   AMENDS:
2659-7-627 (Effective 05/06/26) (Applies beginning 01/01/26), as enacted by Laws of Utah
272025, Chapter 407
2859-10-1048 (Effective 05/06/26) (Applies beginning 01/01/26), as enacted by Laws of
29Utah 2025, Chapter 407
30   ENACTS:
3163N-1a-308 (Effective 05/06/26), Utah Code Annotated 1953
32
33   Be it enacted by the Legislature of the state of Utah:
34Section 1. Section 59-7-627 is amended to read:
3559-7-627 (Effective 05/06/26) (Applies beginning 01/01/26). Nonrefundable tax
36   credits for employer-provided child care.
37   (1) As used in this section:
38(a) "Eligible small business" means the same as that term is defined in Section 45F,
39Internal Revenue Code.
40(b) "Off-site qualified child care facility" means a qualified child care facility that an
41employer does not own, control, operate, or manage.
42(c) "On-site qualified child care facility" means a qualified child care facility that an
43employer owns, controls, operates, or manages, for the benefit of the employer's
44employees.
45[(a)] (d)(i) "Qualified child care expenditure" means an amount [paid or incurred] an
46employer pays or incurs for:
47(A) the operating costs of [a] an on-site qualified child care facility[ of the
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Enrolled Copy  H.B. 190
48employer], whether the employer operates the on-site qualified child care
49facility or contracts with a third party provider to provide child care services at
50the on-site qualified child care facility[.] ;
51(B) entering into a contract with an off-site qualified child care facility to provide
52child care services for the employer's employees; or
53(C) entering into a contract with an intermediate entity that contracts with one or
54more off-site qualified child care facilities to provide child care services for the
55employer's employees.
56(ii) ["Qualified] For an employer that operates an on-site qualified child care facility,
57"qualified child care expenditure" includes costs related to training employees and
58providing increased compensation to employees with higher levels of child care
59training.
60      [(b)] (e) "Qualified child care facility" means center based child care as that term is
61defined in Section 26B-2-401 that is located in the state.
62      [(c)] (f) "Qualified construction expenditure" means an amount [paid or incurred] an
63employer pays or incurs to acquire, construct, rehabilitate, or expand property:
64(i) for [a] an on-site qualified child care facility[ of the employer]; and
65(ii) with respect to which the employer is allowed a deduction for depreciation, or
66amortization in lieu of depreciation.
67      [(d)] (g) "Qualifying taxpayer" means a taxpayer that:
68(i) is an employer; [and]
69(ii) qualifies for and claims the federal employer-provided child care tax credit
70described in Section 45F, Internal Revenue Code, for the current taxable year[.] ;
71and
72(iii) does not obtain payment from an employee or deduct from an employee's salary
73or wages for child care services, with respect to any qualified child care facility
74for which the taxpayer claims a tax credit under this section.
75      [(e)] (h) "Recapture event" means an employer fails to operate [a] an on-site qualified
76child care facility for which the employer claims a tax credit under [this section]
77Subsection (2) as a child care facility for at least five consecutive taxable years after
78the taxable year on which the employer first claims a tax credit under [this section]
79Subsection (2).
80      [(f)] (i) "Third party provider" means:
81(i) a new child care provider; or
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82(ii) an existing child care provider that can perform the contract without reducing the
83provider's existing child care services.
84   (2)(a) A qualifying taxpayer may claim a nonrefundable tax credit equal to 20% of the
85qualified construction expenditures the qualifying taxpayer incurred during the
86taxable year.
87(b) A qualifying taxpayer may carry forward, to the next five taxable years, the amount
88of the qualifying taxpayer's tax credit described in this Subsection (2) that exceeds
89the qualifying taxpayer's income tax liability for the taxable year.
90   (3)(a)[(i) Subject to Subsection (3)(a)(ii), a] A qualifying taxpayer may claim a
91nonrefundable tax credit equal to:
92(i) 30% of the qualified child care expenditures the qualifying taxpayer incurred
93during the taxable year, for a qualifying taxpayer that qualifies as an eligible small
94business for the taxable year; or
95(ii) 10% of the qualified child care expenditures the qualifying taxpayer incurred
96during the taxable year, for a qualifying taxpayer that does not qualify as an
97eligible small business for the taxable year.
98[(ii) A qualifying taxpayer may claim a tax credit under this Subsection (3) for
99qualified child care expenditures only if the qualifying taxpayer claims a tax credit
100under Subsection (2) for the current taxable year or a previous taxable year.]
101(b) A qualifying taxpayer may not carry forward or carry back the tax credit described in
102this Subsection (3) that exceeds the qualifying taxpayer's income tax liability for the
103taxable year.
104   (4)(a)(i) If a recapture event happens within two taxable years after the first taxable
105year in which the qualifying taxpayer claims a tax credit under this section, a
106qualifying taxpayer shall repay 100% of the tax credit a qualifying taxpayer
107receives under this section for any taxable year.
108(ii) If a recapture event happens more than two taxable years but fewer than three
109taxable years after the first taxable year in which the qualifying taxpayer claims a
110tax credit under this section, a qualifying taxpayer shall repay 75% of the tax
111credit a qualifying taxpayer receives under this section for any taxable year.
112(iii) If a recapture event happens more than three taxable years but fewer than four
113taxable years after the first taxable year in which the qualifying taxpayer claims a
114tax credit under this section, a qualifying taxpayer shall repay 50% of the tax
115credit a qualifying taxpayer receives under this section for any taxable year.
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 Enrolled Copy  H.B. 190
116(iv) If a recapture event happens more than four taxable years but fewer than five
117taxable years after the first taxable year in which the qualifying taxpayer claims a
118tax credit under this section, a qualifying taxpayer shall repay 25% of the tax
119credit a qualifying taxpayer receives under this section for any taxable year.
120      (b) A qualifying taxpayer shall make a payment for a recapture event for the taxable year
121in which the recapture event occurs.
122Section 2. Section 59-10-1048 is amended to read:
12359-10-1048 (Effective 05/06/26) (Applies beginning 01/01/26). Nonrefundable tax
124  credits for employer-provider child care.
125  (1) As used in this section:
126      (a) "Eligible small business" means the same as that term is defined in Section 45F,
127Internal Revenue Code.
128      [(a)] (b) "Qualified child care expenditure" means the same as that term is defined in
129Section 59-7-627.
130      [(b)] (c) "Qualified child care facility" means the same as that term is defined in Section
13159-7-627.
132      [(c)] (d) "Qualified construction expenditure" means the same as that term is defined in
133Section 59-7-627.
134      [(d)] (e) "Qualifying claimant" means a claimant, estate, or trust that:
135(i) is an employer; [and]
136(ii) qualifies for and claims the federal employer-provided child care tax credit
137described in Section 45F, Internal Revenue Code, for the current taxable year[.] ;
138and
139(iii) does not obtain payment from an employee or deduct from an employee's salary
140or wages for child care services, with respect to any qualified child care facility
141for which the claimant, estate, or trust claims a tax credit under this section.
142      [(e)] (f) "Recapture event" means the same as that term is defined in Section 59-7-627.
143      [(f)] (g) "Third party provider" means the same as that term is defined in Section
14459-7-627.
145  (2)(a) A qualifying claimant may claim a nonrefundable tax credit equal to 20% of the
146      qualified construction expenditures the qualifying claimant incurred during the
147      taxable year.
148      (b) A qualifying claimant may carry forward, to the next five taxable years, the amount
149of the qualifying claimant's tax credit described in this Subsection (2) that exceeds
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150the qualifying claimant's income tax liability for the taxable year.
151   (3)(a)[(i) Subject to Subsection (3)(a)(ii), a] A qualifying claimant may claim a
152nonrefundable tax credit equal to:
153(i) 30% of the qualified child care expenditures the qualifying claimant incurred
154during the taxable year, for a qualifying claimant that qualifies as an eligible small
155business for the taxable year; or
156(ii) 10% of the qualified child care expenditures the qualifying claimant incurred
157during the taxable year, for a qualifying claimant that does not qualify as an
158eligible small business for the taxable year.
159[(ii) A qualifying claimant may claim a tax credit under this Subsection (3) for
160qualified child care expenditures only if the qualifying claimant claims a tax credit
161under Subsection (2) for the current taxable year or a previous taxable year.]
162(b) A qualifying claimant may not carry forward or carry back the tax credit described in
163this Subsection (3) that exceeds the qualifying claimant's income tax liability for the
164taxable year.
165   (4)(a)(i) If a recapture event happens within two taxable years after the first taxable
166year in which the qualifying claimant claims a tax credit under this section, a
167qualifying claimant shall repay 100% of the tax credit a qualifying claimant
168receives under this section for any taxable year.
169(ii) If a recapture event happens more than two taxable years but fewer than three
170taxable years after the first taxable year in which the qualifying claimant claims a
171tax credit under this section, a qualifying claimant shall repay 75% of the tax
172credit a qualifying claimant receives under this section for any taxable year.
173(iii) If a recapture event happens more than three taxable years but fewer than four
174taxable years after the first taxable year in which the qualifying claimant claims a
175tax credit under this section, a qualifying claimant shall repay 50% of the tax
176credit a qualifying claimant receives under this section for any taxable year.
177(iv) If a recapture event happens more than four taxable years but fewer than five
178taxable years after the first taxable year in which the qualifying claimant claims a
179tax credit under this section, a qualifying claimant shall repay 25% of the tax
180credit a qualifying claimant receives under this section for any taxable year.
181(b) A qualifying claimant shall make a payment for a recapture event for the taxable year
182in which the recapture event occurs.
183Section 3. Section 63N-1a-308 is enacted to read:
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 Enrolled Copy  H.B. 190
18463N-1a-308 (Effective 05/06/26). Office to maintain webpage for employers
185  regarding employer-provided child care tax credits.
186  (1) For purposes of this section, "employer-provided child care tax credits" means the
187      nonrefundable income tax credits available to employers under Sections 59-7-627 and
188      59-10-1048.
189  (2) The office shall develop and maintain a webpage on the office's public website through
190      which employers may obtain information and resources regarding the
191      employer-provided child care tax credits.
192  (3) The webpage described in Subsection (2) shall:
193      (a) provide a simple and easy-to-understand overview of the employer-provided child
194care tax credits, including the eligibility requirements and an explanation as to how
195the state's employer-provided child care tax credits relates to the federal
196employer-provided child care tax credit under Section 45F, Internal Revenue Code;
197      (b) provide instructions to employers for how to claim an employer-provided child care
198tax credit, including:
199(i) a description of applicable filing deadlines;
200(ii) links for accessing any necessary forms or documentation; and
201(iii) contact information for relevant state or federal agencies, intermediaries, and
202other stakeholders that may be able to assist employers with claiming a tax credit;
203      (c) provides examples of the various ways in which an employer may qualify to receive
204an employer-provided child care tax credit; and
205      (d) includes any other information the office determines will increase employer
206awareness and the effectiveness of the employer-provided child care tax credits.
207  (4) The office may coordinate with the State Tax Commission and any other relevant
208      agencies in developing and maintaining the webpage required by this section.
209Section 4. Effective Date.
210  This bill takes effect on May 6, 2026.
211Section 5. Retrospective operation.
212  (1) Except as provided in Subsection (2), this bill has retrospective operation to January 1,
213      2026.
214  (2) Section 63N-1a-308 (Effective 05/06/26) has no retrospective operation.
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