WEST virginia legislature

2024 regular session

Introduced

Senate Bill 323

By Senators Woelfel, Deeds, Chapman, Caputo, Takubo, Hamilton, Smith, and Plymale

[Introduced January 12, 2024; referred
to the Committee on Finance]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-21-27, relating to expenses associated with childcare.

Be it enacted by the Legislature of West Virginia:

ARTICLE 21. personal income tax.

§11-21-27. Expenses related to childcare; credits against state tax.

(a) For income tax years beginning on and after January 1, 2025, if a resident individual claims a childcare eligible expenses credit on the individual’s federal tax return, the individual shall be allowed a childcare eligible expenses credit against the income taxes due on the individual’s income under this article 21 calculated as follows:

(1) If the resident individual’s federal adjusted gross income is $30,000 or less, the credit shall be in an amount equal to 50% of the credit for childcare expenses claimed on the resident individual’s federal tax return.

(2) If the resident individual’s federal adjusted gross income is between $30,001 and $45,000, the credit shall be in an amount equal to 30% of the credit for childcare expenses claimed on the resident individual’s federal tax return.

(3) If the resident individual’s federal adjusted gross income is between $45,001 and $65,000, the credit shall be in an amount equal to 20% of the credit for childcare expenses claimed on the resident individual’s federal tax return.

(b) If the resident individual’s federal adjusted gross income is $65,000 or more, the resident individual shall not be allowed a credit under this subsection.

(c) If the credits allowed under subdivisions (1), (2), and (3) of this subsection exceed the income taxes due on the resident individual’s income, the amount of the eligible credits not used to offset income taxes shall not be carried forward as tax credits against the resident individual’s subsequent years’ income tax liability but shall be refunded to the individual.

(d) The childcare eligible expenses credits allowed under subdivisions (1), (2), and (3) of this subsection shall not be allowed to a resident individual who is receiving childcare assistance from the Department of Health and Human Resources except to the extent of the taxpayer’s unreimbursed out-of-pocket expenses that result in a federal credit for eligible childcare expenses.

(e) In the case of a resident for part of a tax year, the credits allowed by this section shall be apportioned in the ratio determined under section §11-21-30 of this code.

(f) The term "federal childcare tax credit" as used herein refers to IRS Form 2441 "Child and Dependent Care Expenses." However, for purposes of this subsection, to constitute a "qualified individual" and for an individual to obtain any refund, the dependent child claimed must not have reached the age of 13 on December 31, of the tax year.

NOTE: The purpose of this bill is to create a tax credit related to childcare expenses.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.