Child Day Care Assistance Credit
INCOME AND PRIVILEGE TAXPAYERS-Effective for all taxable years beginning after Dec. 31, 1991.
Beginning in tax year 2013, this credit shall only be available to privilege taxpayers and corporations that are subject to the Kansas corporate income tax, i.e. C corporations. This credit shall not be available to individuals, partnerships, S corporations, limited liability companies, and other pass-through entities. For tax years commencing after December 31, 2020, new credits shall be available to all income taxpayers.
The child day care assistance credit is designed to encourage businesses to purchase or provide child care services for their employees' children or to provide services in assisting the employees in locating child care for their children. A business which provides this service is entitled to a credit against their income tax or privilege tax liability.
Qualifications
The business must be an income or privilege taxpayer AND EITHER;
- pays for child day care services for its employees, OR
- locates child day care services for its employees, OR
- provides facilities and necessary equipment for child day care services to its employees, OR
- provides access to available child day care services for its employees OR
- provides payments to an organization providing access to child day care services.
The child care facility providing the services of caring for the employees' children must be licensed by the Kansas Department of Health and Environment.
Credit Amount
For taxpayers who provide the facility and equipment:
During the First year (Initial Year), if
the business provides the facility and the necessary equipment for
child day care services and the facility is used primarily by the
dependent children of its employees, the business receives a credit
of 50 percent of the net amount spent.
In subsequent years, the business receives a credit of 30 percent of the net amount spent, again, as long as the facility is used primarily by the dependent children of its employees.
For taxpayers who provide payments to an organization that is partnering with child care providers to share costs and deliver services:
The credit is 30 percent of the net amount spent for locating or providing child day care services for its employees' children.
For taxpayers providing payments to an organization providing access to child day care services:
The credit is 50 percent of the amount expended to an organization providing access to available child day care services for its employees’ children.
Limitation of Credit
For taxpayers who provide the facility and equipment:
In the initial year the credit cannot
exceed $45,000. In subsequent taxable years
the credit cannot exceed $30,000.
For taxpayers who provide payments to an organization providing access to available child care services:
The credit is 50% of the payments made to an organization providing access to available child day care services for the taxpayer’s employees. The credit cannot exceed $45,000 for any taxpayer during any taxable year.
For taxpayers providing payments to an organization providing access to child day care services:
The credit cannot exceed $45,000 for any taxpayer during any taxable year.
Credit Amount
For taxpayers who pay for child day care services
or who assist in locating child day care services:
The credit is 30 percent of the net amount spent for locating or providing
child day care services for its employees' children.
For taxpayers who provide payments to an organization that is partnering with child care providers to share costs and deliver services.
Limitation of Credit
For taxpayers who pay for child day care services
or who assist in locating child day care services:
The credit cannot exceed $30,000 for any business during any taxable
year.
For taxpayers providing payments to an organization providing access to child day care services:
The credit cannot exceed $45,000 for any taxpayer during any taxable year.
Child Day Care Assistance Refund
Available for all types of child care investment:
If the amount of child day care assistance credit exceeds the tax
liability for a taxable year the excess is refunded to the business.
Procedures to Claim the Credit
You may download Schedule K-56 to claim the child day care assistance credit. This schedule must be completed and submitted with the income or privilege tax return. You may also call the Department of Revenue voice mail system at 785-296-4937 to request Schedule K-56. You will be asked to give your name, address, phone number and form(s) you desire. Please allow two weeks for delivery of your forms.