FISCAL NOTE
Date Requested: January 14, 2026
Time Requested: 07:50 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1051 |
Introduced |
SB169 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to create a tax credit related to childcare expenses.
Per our interpretation, the legislation creates a refundable tax credit for childcare expenses for a resident individual who is eligible for the federal Child and Dependent Care Credit claimed on Internal Revenue Service Form 2441 for the same taxable year. The credit is calculated as a percentage of the federal income tax credit with the applicable percentage based on the resident individual’s federal adjusted gross income. The credit is limited to a resident individual with federal adjusted gross income of less than $65,000. The legislation does not address residents who file jointly. The legislation would be effective for taxable years beginning on and after January 1, 2027.
The impact of this bill is calculated in isolation from that of House Bill 226 which passed during the 2024 2nd Special Legislative Session. According to our interpretation, the legislation, if passed, would result in a decrease in General Revenue collections of roughly $650,000 beginning in FY2028. It is estimated that roughly 4,700 taxpayers would be eligible for the credit with the average credit being $140.
Additional administrative costs incurred by the State Tax Department would be $29,150 in FY2027 and $11,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
29,150 |
11,000 |
| Personal Services |
0 |
11,000 |
11,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
0 |
16,500 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-650,000 |
Explanation of above estimates (including long-range effect):
Per our interpretation, the legislation creates a refundable tax credit for childcare expenses for a resident individual who is eligible for the federal Child and Dependent Care Credit claimed on Internal Revenue Service Form 2441 for the same taxable year. The credit is calculated as a percentage of the federal income tax credit with the applicable percentage based on the resident individual’s federal adjusted gross income. The credit is limited to a resident individual with federal adjusted gross income of less than $65,000. The legislation does not address residents who file jointly. The legislation would be effective for taxable years beginning on and after January 1, 2027.
The impact of this bill is calculated in isolation from that of House Bill 226 which passed during the 2024 2nd Special Legislative Session. According to our interpretation, the legislation, if passed, would result in a decrease in General Revenue collections of roughly $650,000 beginning in FY2028. It is estimated that roughly 4,700 taxpayers would be eligible for the credit with the average credit being $140.
Additional administrative costs incurred by the State Tax Department would be $29,150 in FY2027 and $11,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to create a tax credit related to childcare expenses.
The bill disallows any further claim regarding a dependent child during the tax year that such child turns 13. In contrast, the federal Child and Dependent Care Credit permits the credit to be claimed on expenses incurred up until the day that such child turns 13. This may create difficulties with administering the credit because the credit is based upon the total credit claimed by the taxpayer on their federal return.
The language of the bill permits a claim based upon “a resident individual claim.” The bill does not contemplate an unsuccessful claim.
A “child and dependent care credit” currently exists in W. Va. Code §11-21-26. Since January 1, 2024, W.Va. Code §11-21-26 has permitted taxpayers to claim a credit in the amount of 50 percent of the taxpayer’s federal child and dependent care tax credit. This bill does not address how, or if, the new credit would affect the existing credit. Failure to address the existing credit could create confusion by having 2 separate sections of code creating 2 separate tax credits based on the same federal tax credit with each credit being applied differently.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov