The Missouri House has swiftly moved to pass House Bill 1488, sponsored by State Representative Brenda Shields. The bill, which received overwhelming support with a vote of 113-39, introduces a comprehensive tax credit package aimed at promoting development of additional childcare resources to serve Missouri families.
Missouri is currently facing a shortage of childcare resources, with only one available childcare slot for every three children under the age of five. Recognizing the seriousness of the issue, Representative Shields emphasized that the rising cost of childcare has become a major obstacle for many families and is a significant factor influencing parents' decisions to stay home rather than rejoin the workforce.
"Missouri has lost more than $1.3 billion annually due to childcare shortages, including $286 million in potential tax revenue. This plan serves as an innovative solution, fostering collaboration between businesses, parents, and government to ensure quality, affordable childcare is accessible statewide," Representative Shields, R-St. Joseph, stated. “The availability of childcare is an important for the future of state, and passing this legislation brings us one step closer to cultivating a reliable workforce, anchored by a system of childcare that is both dependable and economically feasible.”
"Addressing the childcare shortages is pivotal for Missouri's prosperity. With the passage of HB 1488, we're making a strategic investment in our state's families,” House Speaker Dean Plocher, R-St. Louis, said. “These targeted tax credits not only alleviate immediate challenges but also promote the development of additional childcare resources either associated through Missourians’ employment or through an independent provider. By championing affordable childcare, we empower families and bolster our workforce, ensuring a brighter and more resilient Missouri."
Some of the key provisions of HB 1488 are as follows:
Child Care Contribution Tax Credit Act (Effective: Jan 1, 2025, to Dec 31, 2030):
–Taxpayers can claim a 75% tax credit against state liability for childcare contributions.
–Credit range: $100 to $200,000 per year.
–Eligible donations must directly support childcare for children aged 12 or younger.
–Non-refundable tax credits capped at $20 million annually, with a 15% increase for contributions in "childcare deserts."
Employer Provided Child Care Assistance Tax Credit Act (Effective: Jan 1, 2025, to Dec 31, 2030):
–Taxpayers with two or more employees can claim a 30% tax credit for childcare expenditures.
–Maximum credit: $200,000 per taxpayer per year.
–Applicable to corporations, certain charitable organizations, and individuals subject to state income tax.
–Nonprofit 501(c)(3) organizations would be eligible for a refund of its tax credit
–Non-refundable tax credits capped at $20 million annually, with a 15% increase for contributions in "childcare deserts."
Child Care Providers Tax Credit Act (Effective: Jan 1, 2025, to Dec 31, 2030):
–Childcare providers with three or more employees can claim a tax credit for withholding tax and up to 30% of capital expenditures so long as the employees work a minimum of three months for an average of 10 hours each
–No credit for capital expenditures under $1,000.
–Maximum tax credit: $200,000 per provider per year.
–Non-refundable tax credits with excess credits carried back or forward up to five tax years.
–Capped at $20 million annually, with a 15% increase for contributions in "childcare deserts."
The tax credits, estimated to cost up to $70 million, would sunset after six years, allowing lawmakers to assess its impact and make necessary adjustments.
Missouri anticipates that this tax credit package will not only address the immediate childcare crisis but also serve as a crucial economic development tool for the state, providing a reliable workforce with access to quality, affordable childcare options.
Representative Brenda Kay Shields, a Republican, represents part of Buchanan County (District 11) in the Missouri House of Representatives. She was elected to her first two-year term in November 2018. For more information, please contact Rep. Shields’ office at 573-751- 3643 or by email at Brenda.Shields@House.Mo.Gov.
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