Child care supply credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45BB.

Child care supply credit

(a)

In general

For purposes of section 38, the amount of the child care supply credit determined under this section with respect to any employer for any taxable year is an amount equal to the lesser of— (1)the applicable percentage of the qualified child care wages paid or incurred by the employer for such taxable year, or (2)the excess (if any) of— (A)the qualified child care wages paid or incurred by the employer for such taxable year, over (B)the qualified child care wages paid or incurred by the employer for the preceding taxable year. (b)

Requirement of increase in annual average hourly child care wage

(1)

In general

No credit shall be determined under subsection (a) with respect to any employer for any taxable year unless such employer’s average hourly child care wage for such taxable year exceeds such employer’s average hourly child care wage for the preceding taxable year. (2)

Average hourly child care wage

For purposes of this subsection, the term average hourly child care wage means, with respect to any employer for any taxable year, the ratio of— (A)the qualified child care wages paid or incurred by such employer for such taxable year, divided by (B)the total number of hours of service for which such wages were paid or incurred. (c)

Applicable percentage

For purposes of this section— (1)

In general

Except as provided in paragraph (2), the applicable percentage is 5 percent. (2)

Rural areas

(A)

In general

In the case of qualified child care wages paid or incurred with respect to employment at an eligible childcare facility which is located in a rural area, the applicable percentage is 7 percent. (B)

Rural area defined

For purposes of this paragraph, the term rural area means any area other than an urban area (as defined in section 101(a)(35) of title 23, United States Code). (d)

Definitions

For purposes of this section— (1)

Qualified child care wages

(A)

In general

The term qualified child care wages means wages paid to qualified child care workers. (B)

Wages

The term wages has the meaning given such term by subsection (b) of section 3306 (determined without regard to any dollar limitation contained in such section). Such term shall not include any amount taken into account for purposes of determining any other credit allowed under this subpart. (2)

Qualified child care worker

(A)

In general

The term qualified child care worker means any employee who— (i)is employed at an eligible child care facility, and (ii)provides child care services. (3)

Eligible child care facility

The term eligible child care facility means any facility which— (A)provides child care services for at least 6 individuals, (B)receives a fee, payment, or grant for providing such services, and (C)complies with all applicable laws and regulations of a State or unit of local government. (4)

Child care services

The term child care services means the providing of care, education, protection, supervision, or guidance to children. (e)

Election to have credit not apply

(1)

In general

A taxpayer may elect to have this section not apply for any taxable year. (2)

Other rules

Rules similar to the rules of paragraphs (2) and (3) of section 51(j) shall apply for purposes of this subsection.

(b)

Credit treated as part of general business credit

Section 38(b) of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting , plus, and by adding at the end the following new paragraph:

(42)the child care supply credit determined under section 45BB(a).

(c)

Elective payment

Section 6417(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(13)The child care supply credit determined under section 45BB(a).

(d)

Denial of double benefit

Section 280C(a) of the Internal Revenue Code of 1986 is amended by inserting 45BB(a), after 45S(a),. (e)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

Sec. 45BB. Child care supply credit.

(f)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.