wa-law.org > bill > 2025-26 > HB 2187 > Original Bill
The legislature finds that the lack of affordable child care is a primary barrier to workforce participation, particularly for employees of small and mid-sized businesses.
The legislature recognizes that while large corporations often have the resources to provide on-site child care, small businesses are at a competitive disadvantage.
Therefore, it is the intent of this act to establish a five-year pilot program to incentivize employer-supported child care. The legislature intends to cap the total fiscal impact of this tax credit program to ensure budget stability while explicitly authorizing and encouraging small businesses to pool their resources through child care consortiums.
Beginning January 1, 2027, a person is allowed a credit against the tax imposed in this chapter equal to 50 percent of the amount paid by the employer to a registered child care provider or child care facility for the care of a dependent or dependents of one or more employees.
During calendar years 2027 and 2028, credit eligibility is limited to:
Employers with fewer than 100 full-time equivalent employees; or
Employers participating in a child care consortium as defined in subsection (10) of this section.
Beginning January 1, 2029, credit eligibility is open to any qualifying person.
The credit claimed may not exceed the tax that would otherwise be due under this chapter. Refunds may not be granted in place of credits. Any amount of credit earned under this section not claimed by the person in one calendar year may be carried forward for no more than one calendar year immediately following the year that the credit was earned.
For persons part of a child care consortium, the tax credit must be claimed by a member of the consortium based on the member's specific financial contribution to the consortium's total cost of child care assistance, subject to the individual cap in subsection (4) of this section.
The total credit amount approved by this section may not exceed $50,000 for each person claiming the credit in a calendar year.
The total amount of credits authorized under this section may not exceed an annual statewide limit of $5,000,000 per calendar year. Credits must be authorized on a first-in-time basis. The department must publish a notice on its website when the cap is reached.
No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section.
To claim a credit under this section, a person must electronically file with the department all returns, forms, and other information the department requires in an electronic format as provided and approved by the department. Any return, form, or information required to be filed in electronic format under this section is not filed until received by the department in an electronic format. For purposes of this subsection, "returns" has the same meaning as "return" in RCW 82.32.050.
No person may claim a credit against taxes due under both this chapter and chapter 82.16 RCW for the same child care assistance costs.
No credit may be claimed under this section after January 1, 2032.
For the purpose of this section, "child care consortium" means:
Two or more employers that form a child care partnership in order to pool monetary resources to purchase child care services or to contract for slots at a licensed child care facility for the benefit of their employees; or
A local chamber of commerce, downtown association, or economic development council acting as a lead for a partnership of employers that form a child care partnership in order to pool monetary resources to purchase child care services or to contract for slots at a licensed child care facility for the benefit of their employees.
This section expires January 1, 2033.
Beginning January 1, 2027, a person is allowed a credit against the tax imposed in this chapter equal to 50 percent of the amount paid by the employer to a registered child care provider or child care facility for the care of a dependent or dependents of one or more employees.
During calendar years 2027 and 2028, credit eligibility is limited to:
Employers with fewer than 100 full-time equivalent employees; or
Employers participating in a child care consortium as defined in subsection (10) of this section.
Beginning January 1, 2029, credit eligibility is open to any qualifying person.
The credit claimed may not exceed the tax that would otherwise be due under this chapter. Refunds may not be granted in place of credits. Any amount of credit earned under this section not claimed by the person in one calendar year may be carried forward for no more than one calendar year immediately following the year that the credit was earned.
For persons part of a child care consortium, the tax credit must be claimed by a member of the consortium based on the member's specific financial contribution to the consortium's total cost of child care assistance, subject to the individual cap in subsection (4) of this section.
The total credit amount approved by this section may not exceed $50,000 for each person claiming the credit in a calendar year.
The total amount of credits authorized under this section may not exceed an annual statewide limit of $5,000,000 per calendar year. Credits must be authorized on a first-in-time basis. The department must publish a notice on its website when the cap is reached.
No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section.
To claim a credit under this section, a person must electronically file with the department all returns, forms, and other information the department requires in an electronic format as provided and approved by the department. Any return, form, or information required to be filed in electronic format under this section is not filed until received by the department in an electronic format. For purposes of this subsection, "returns" has the same meaning as "return" in RCW 82.32.050.
No person may claim a credit against taxes due under both this chapter and chapter 82.04 RCW for the same child care assistance costs.
No credit may be claimed under this section after January 1, 2032.
For the purpose of this section, "child care consortium" means:
Two or more employers that form a child care partnership in order to pool monetary resources to purchase child care services or to contract for slots at a licensed child care facility for the benefit of their employees; or
A local chamber of commerce, downtown association, or economic development council acting as a lead for a partnership of employers that form a child care partnership in order to pool monetary resources to purchase child care services or to contract for slots at a licensed child care facility for the benefit of their employees.
This section expires January 1, 2033.
This section is the tax preference performance statement for the tax preferences contained in sections 1 and 2, chapter . . ., Laws of 2026 (sections 1 and 2 of this act). This performance statement is only intended to be used for subsequent evaluation of the tax preferences. It is not intended to create a private right of action by any party or to be used to determine eligibility for preferential tax treatment.
The legislature categorizes these tax preferences as ones intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a), and to provide tax relief for certain businesses or individuals, as indicated in RCW 82.32.808(2)(e).
It is the legislature's specific public policy objective to provide reduced tax liability for businesses that provide child care for their employees.
If a review finds that the total number of child care slots supported by employers claiming the credit in this act has increased year-over-year during the first two years of the credit's existence, then the legislature intends to extend the expiration date of the tax preferences.
In order to obtain the data necessary to perform the review in subsection (4) of this section, the joint legislative audit and review committee may refer to any data collected by the state.