S T A T E O F N E W Y O R K
________________________________________________________________________
2609
2021-2022 Regular Sessions
I N S E N A T E
January 22, 2021
___________
Introduced by Sen. HELMING -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations
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:
Section 1. The tax law is amended by adding a new section 45 to read
as follows:
§ 45. EMPLOYER PROVIDED OR SPONSORED CHILD CARE. (A) DEFINITIONS. FOR
THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
ING MEANINGS:
(1) "COST OF OPERATION" MEANS ANY REASONABLE DIRECT OPERATIONAL COSTS
INCURRED BY AN EMPLOYER AS A RESULT OF PROVIDING EMPLOYER PROVIDED OR
EMPLOYER SPONSORED CHILD CARE FACILITIES; PROVIDED, HOWEVER, THAT SUCH
TERM SHALL EXCLUDE THE COST OF ANY PROPERTY THAT IS QUALIFIED CHILD CARE
PROPERTY.
(2) "EMPLOYER" MEANS A TAXPAYER WHO IS AN EMPLOYER UPON WHOM TAXES ARE
IMPOSED PURSUANT TO ARTICLE NINE-A, TWENTY-TWO OR THIRTY-THREE OF THIS
CHAPTER.
(3) "EMPLOYER PROVIDED" MEANS CHILD CARE OFFERED ON THE PREMISES OF AN
EMPLOYER.
(4) "EMPLOYER SPONSORED" MEANS A CONTRACTUAL ARRANGEMENT WITH A CHILD
CARE FACILITY THAT IS PAID FOR BY AN EMPLOYER.
(5) "PREMISES OF THE EMPLOYER" MEANS A WORKPLACE PREMISES OF AN
EMPLOYER, WITHIN THE STATE, PROVIDING THE CHILD CARE, OR BY ONE EMPLOYER
PROVIDING THE CHILD CARE IN THE EVENT THAT THE CHILD CARE PROPERTY IS
OWNED JOINTLY OR SEVERALLY BY SUCH EMPLOYER AND ONE OR MORE EMPLOYERS;
PROVIDED, HOWEVER, THAT IF SUCH WORKPLACE PREMISES ARE IMPRACTICABLE OR
OTHERWISE UNSUITABLE FOR THE ON-SITE LOCATION OF A CHILD CARE FACILITY,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04746-01-1
S. 2609 2
AS DETERMINED BY THE OFFICE OF CHILDREN AND FAMILY SERVICES, OR IN
CITIES OF ONE MILLION OR MORE, THE CITY DEPARTMENT OF HEALTH AND MENTAL
HYGIENE, SUCH FACILITY MAY BE LOCATED WITHIN A REASONABLE DISTANCE OF
THE PREMISES OF THE EMPLOYER.
(6) "QUALIFIED CHILD CARE PROPERTY" INCLUDES, BUT IS NOT LIMITED TO,
AMOUNTS EXPENDED ON LAND ACQUISITION, IMPROVEMENTS, BUILDINGS, AND
BUILDING IMPROVEMENTS AND FURNITURE, FIXTURES, AND EQUIPMENT, AND MEANS
ALL REAL PROPERTY AND TANGIBLE PERSONAL PROPERTY PURCHASED OR ACQUIRED
ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-ONE, OR WHICH PROPERTY IS
FIRST PLACED IN SERVICE ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-
ONE, FOR USE EXCLUSIVELY IN THE CONSTRUCTION, EXPANSION, IMPROVEMENT OR
OPERATION OF AN EMPLOYER PROVIDED CHILD CARE FACILITY, BUT ONLY IF:
(A) THE FACILITY IS LICENSED OR COMMISSIONED BY THE OFFICE OF CHILDREN
SERVICES PURSUANT TO SECTION THREE HUNDRED NINETY OF THE SOCIAL SERVICES
LAW, OR IN CITIES OF ONE MILLION OR MORE, THE CITY DEPARTMENT OF HEALTH
AND MENTAL HYGIENE PURSUANT TO ARTICLE FORTY-SEVEN OF THE HEALTH CODE OF
THE CITY OF NEW YORK.
(B) AT LEAST NINETY-FIVE PERCENT OF THE CHILDREN WHO USE THE FACILITY
ARE CHILDREN OF EMPLOYEES OF:
(I) THE EMPLOYER AND OTHER EMPLOYERS IN THE EVENT THAT THE CHILD CARE
PROPERTY IS OWNED JOINTLY OR SEVERALLY BY THE EMPLOYER AND ONE OR MORE
OTHER EMPLOYERS; OR
(II) A CORPORATION THAT IS A MEMBER OF THE TAXPAYER'S "AFFILIATED
GROUP" WITHIN THE MEANING OF SECTION 1504(A) OF THE INTERNAL REVENUE
CODE.
(C) THE EMPLOYER HAS NOT PREVIOUSLY CLAIMED ANY TAX CREDIT FOR THE
COST OF OPERATION FOR SUCH QUALIFIED CHILD CARE PROPERTY PLACED IN
SERVICE PRIOR TO TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND TWENTY-ONE.
(B) ALLOWANCE OF CREDIT. A TAX CREDIT AGAINST THE TAXES IMPOSED PURSU-
ANT TO ARTICLES NINE-A, TWENTY-TWO AND THIRTY-THREE OF THIS CHAPTER
SHALL BE GRANTED TO AN EMPLOYER WHO PROVIDES OR SPONSORS CHILD CARE FOR
EMPLOYEES. SUCH TAX CREDIT SHALL BE IN AN AMOUNT EQUAL TO TEN PERCENT OF
THE COST OF OPERATION INCURRED BY THE EMPLOYER, AND SUCH CREDIT SHALL
NOT EXCEED TEN THOUSAND DOLLARS LESS ANY AMOUNTS PAID BY EMPLOYEES
DURING THE TAXABLE YEAR.
(C) CONDITIONS AND LIMITATIONS. THE TAX CREDIT ALLOWED UNDER SUBDIVI-
SION (B) OF THIS SECTION SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS
AND LIMITATIONS:
(1) THE EMPLOYER SHALL CERTIFY TO THE DEPARTMENT THE NAMES OF THE
EMPLOYEES, THE NAME OF THE CHILD CARE PROVIDER, THE NUMBER OF CHILDREN
SERVED BY CARE SUBSIDIZED VIA THIS TAX CREDIT, THE NUMBER OF CHILDREN
RECEIVING CARE WHO ARE EXCLUDED FROM THE TAX CREDIT PURSUANT TO PARA-
GRAPH THREE OF THIS SUBDIVISION, AND SUCH OTHER INFORMATION AS MAY BE
REQUIRED BY THE DEPARTMENT TO ENSURE THAT CREDITS ARE GRANTED ONLY TO
EMPLOYERS WHO PROVIDE OR SPONSOR APPROVED CHILD CARE IN ACCORDANCE WITH
THIS SECTION;
(2) ONLY IN THE CASE OF EMPLOYER SPONSORED CARE, THE AVERAGE CREDIT
UTILIZED PER CHILD SHALL NOT EXCEED THE MARKET RATE PER CHILD ESTAB-
LISHED BY THE OFFICE OF CHILDREN AND FAMILY SERVICES FOR THE SOCIAL
SERVICES DISTRICT WITHIN WHICH CHILD CARE IS PROVIDED; AND
(3) THE EMPLOYER SHALL NOT RECEIVE ANY TAX CREDIT FOR CARE PROVIDED TO
THE CHILDREN OF ANY EMPLOYEE WHOSE ANNUAL HOUSEHOLD INCOME EXCEEDS TWO
HUNDRED THOUSAND DOLLARS. THE DEPARTMENT SHALL ESTABLISH RULES AND
ACCOUNTING MEASURES TO ENSURE THAT ANY COSTS OF CARE PROVIDED TO EMPLOY-
EES WITH ANNUAL HOUSEHOLD INCOMES EXCEEDING TWO HUNDRED THOUSAND DOLLARS
S. 2609 3
ARE ITEMIZED BY THE EMPLOYER AND EXCLUDED FROM THE TAX CREDIT PROVIDED
TO EMPLOYERS PURSUANT TO THIS SECTION.
(D) ELECTION. IN ADDITION TO THE TAX CREDIT PROVIDED UNDER SUBDIVISION
(B) OF THIS SECTION, AN EMPLOYER SHALL BE GRANTED A CREDIT AGAINST THE
TAX FOR THE TAXABLE YEAR IN WHICH THE EMPLOYER FIRST PLACES IN SERVICE
QUALIFIED CHILD CARE PROPERTY. THE CREDIT SHALL EQUAL TWENTY PERCENT OF
THE COST OF ALL QUALIFIED CHILD CARE PROPERTY PURCHASED OR ACQUIRED BY
THE EMPLOYER AND FIRST PLACED IN SERVICE DURING A TAXABLE YEAR. SUCH
CREDIT SHALL NOT EXCEED TWENTY THOUSAND DOLLARS.
(E) CARRYOVER. THE TAX CREDIT ALLOWED UNDER SUBDIVISION (D) OF THIS
SECTION SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS AND LIMITATIONS:
(1) ANY SUCH CREDIT CLAIMED IN ANY TAXABLE YEAR BUT NOT USED IN SUCH
TAXABLE YEAR MAY BE CARRIED FORWARD FOR THREE YEARS FROM THE CLOSE OF
SUCH TAXABLE YEAR. THE SALE, MERGER, ACQUISITION OR BANKRUPTCY OF ANY
EMPLOYER SHALL NOT CREATE NEW ELIGIBILITY FOR THE CREDIT IN ANY SUCCEED-
ING TAXPAYER;
(2) IN NO EVENT SHALL THE AMOUNT OF ANY SUCH TAX CREDIT, INCLUDING ANY
CARRYOVER OF SUCH CREDIT FROM A PRIOR TAXABLE YEAR, EXCEED FIFTY PERCENT
OF THE EMPLOYER'S TAX LIABILITY AS DETERMINED WITHOUT REGARD TO ANY
OTHER CREDITS; AND
(3) FOR EVERY YEAR IN WHICH AN EMPLOYER CLAIMS SUCH CREDIT, THE
EMPLOYER SHALL ATTACH A SCHEDULE, WHOSE FORM AND STRUCTURE SHALL BE
ESTABLISHED BY THE DEPARTMENT, TO THE EMPLOYER'S TAX RETURN SETTING
FORTH THE FOLLOWING INFORMATION WITH RESPECT TO SUCH TAX CREDIT:
(A) A DESCRIPTION OF THE CHILD CARE FACILITY;
(B) THE AMOUNT OF QUALIFIED CHILD CARE PROPERTY ACQUIRED DURING THE
TAXABLE YEAR AND THE COST OF SUCH PROPERTY;
(C) THE AMOUNT OF TAX CREDIT CLAIMED FOR THE TAXABLE YEAR;
(D) THE AMOUNT OF QUALIFIED CHILD CARE PROPERTY ACQUIRED IN PRIOR
TAXABLE YEARS AND THE COST OF SUCH PROPERTY;
(E) ANY TAX CREDIT UTILIZED BY THE EMPLOYER IN PRIOR TAXABLE YEARS;
(F) THE AMOUNT OF TAX CREDIT CARRIED OVER FROM PRIOR YEARS;
(G) THE AMOUNT OF TAX CREDIT UTILIZED BY THE EMPLOYER IN THE CURRENT
TAXABLE YEAR;
(H) THE AMOUNT OF TAX CREDIT TO BE CARRIED FORWARD TO SUBSEQUENT TAX
YEARS; AND
(I) A DESCRIPTION OF ANY RECAPTURE EVENT OCCURRING DURING THE TAXABLE
YEAR, A CALCULATION OF THE RESULTING REDUCTION IN TAX CREDITS ALLOWABLE
FOR THE RECAPTURE YEAR AND FUTURE TAXABLE YEARS, AND A CALCULATION OF
THE RESULTING INCREASE IN TAX FOR THE RECAPTURE YEAR.
(F) RECAPTURE.
(1) IF THE TAXPAYER DISPOSES OF THE QUALIFIED CHILD CARE PROPERTY, OR
IF SUCH PROPERTY CEASES TO BE A QUALIFIED CHILD CARE PROPERTY EXCEPT
FOR:
(A) ANY TRANSFER BY REASON OF DEATH;
(B) ANY TRANSFER BETWEEN SPOUSES OR INCIDENT TO DIVORCE;
(C) ANY TRANSACTION TO WHICH SECTION 381(A) OF THE INTERNAL REVENUE
CODE APPLIES;
(D) ANY CHANGE IN THE FORM OF CONDUCTING THE EMPLOYER'S TRADE OR BUSI-
NESS SO LONG AS THE PROPERTY IS RETAINED BY SUCH TRADE OR BUSINESS AS
QUALIFIED CHILD CARE PROPERTY AND THE EMPLOYER RETAINS A SUBSTANTIAL
INTEREST IN SUCH TRADE OR BUSINESS; OR
(E) ANY ACCIDENT OR CASUALTY, THE TAXPAYER'S TAX IMPOSED BY THIS ARTI-
CLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSATION OCCURS
SHALL BE INCREASED BY THE RECAPTURE PORTION OF THE CREDIT ALLOWED UNDER
PARAGRAPH TWO OF THIS SUBDIVISION FOR ALL PRIOR TAXABLE YEARS.
S. 2609 4
(2) FOR PURPOSES OF PARAGRAPH ONE OF THIS SUBDIVISION, THE RECAPTURE
PORTION SHALL REDUCE THE CREDIT OTHERWISE ALLOWABLE UNDER SUBDIVISION
(D) OF THIS SECTION, BUT SHALL NOT, AT ANY POINT, REDUCE THE TAX CREDIT
BELOW ZERO. ANY EXCESS OF THE RECAPTURE AMOUNT SHALL RESULT IN AN EQUIV-
ALENT INCREASE IN THE TAX IMPOSED UNDER THIS SECTION.
(G) RULES. THE COMMISSIONER SHALL PROMULGATE ANY RULES AND REGULATIONS
NECESSARY TO IMPLEMENT AND ADMINISTER THE PROVISIONS OF THIS SECTION.
(H) CROSS-REFERENCES. FOR THE APPLICATION OF THE CREDIT PROVIDED IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
(1) ARTICLE 9-A: SECTION 210-B, SUBDIVISION 28;
(2) ARTICLE 22: SECTION 606, SUBSECTION (KKK);
(3) ARTICLE 33: SECTION 1511, SUBDIVISION (EE).
§ 2. Section 210-B of the tax law is amended by adding a new subdivi-
sion 28 to read as follows:
28. EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT. (A) ALLOWANCE OF
CREDIT. A TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN SECTION FORTY-FIVE OF THIS CHAPTER, AGAINST THE TAXES IMPOSED BY THIS
ARTICLE.
(B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
IT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX
TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE FIXED
DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
TAXABLE YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND
EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF
SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
§ 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new clause (xlvi) to read as
follows:
(XLVI) EMPLOYER AMOUNT OF CREDIT
PROVIDED OR SPONSORED UNDER SUBDIVISION
CHILD CARE CREDIT TWENTY-EIGHT OF
UNDER SUBSECTION SECTION TWO HUNDRED
(KKK) TEN-B
§ 4. Section 606 of the tax law is amended by adding a new subsection
(kkk) to read as follows:
(KKK) EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT. (1) ALLOWANCE
OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS
PROVIDED IN SECTION FORTY-FIVE OF THIS CHAPTER, AGAINST THE TAX IMPOSED
BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED
OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED
EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL BE
PAID THEREON.
§ 5. Section 1511 of the tax law is amended by adding a new subdivi-
sion (ee) to read as follows:
(EE) EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT. (1) ALLOWANCE
OF CREDIT. A TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS
S. 2609 5
PROVIDED IN SECTION FORTY-FIVE OF THIS CHAPTER, AGAINST THE TAXES
IMPOSED BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY THIS ARTICLE. HOWEVER, IF THE AMOUNT OF
CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
TAXABLE YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND
EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF
SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
§ 6. This act shall take effect immediately and shall apply to taxable
years commencing on or after January 1, 2021.
