Missouri House approves child care tax credit bill
COLUMBIA, Mo. (KMIZ)
The Missouri House is one step closer to passing a bill that plans to incentivize childcare funding and help childcare providers.
House Bill 269 was perfected Tuesday with bipartisan support and will now head to the House Fiscal Review Committee.
Sponsored by Rep. Brenda Shields (R-St. Joseph), the bill would create three tax credits starting in 2026:
- People and businesses donating to child care providers could claim up to 75% of their donations back in tax credits.
- Businesses with two or more employees that help pay for employee child care could claim 30% in tax credit.
- Child care providers with at least three employees could receive tax credits on employee payroll taxes. Up to 30% of costs can also be claimed for new equipment and building investments.
"I know many in this body hear from their constituents about the lack of affordable, safe, reliable, quality child care in their area and we hear from our business leaders across the state that they have trouble recruiting and retaining employees because the lack of childcare," Shields said on the House floor Tuesday.
All three tax credits can not exceed $200,000 per year. Donations are also limited to helping with the care of kids 12 and under.
The bill was passed unanimously in the House's Economic Development Committee. Supporters say it would help boost the state's economy by providing better child care to working families.
According to a 2023 study by the U.S. Chamber of Commerce, Missouri loses around $1.35 billion annually due to child care issues. The study found that 28% of people reported that they or someone they knew did not take a job due to problems with child care and 57% of people voluntarily left jobs to care for young children.
"If you don't have quality child care, you obviously can't hold a job, so if you know that you have stable, high-quality child care that you can trust leaving your child there, you will have better luck with the job," Early Explorers preschool manager Lillian Wolken said.
"If a parent is not quite low-income to get the subsidy, but an employer's going to pay for it or at least pay a portion of their child care, they're going to benefit tremendously from this and that will keep our workforce working," Capitol Kids Development Center owner Paula Stallings said.
This is the third time a bill regarding child care tax credits has gone through the Missouri legislature.
Kids Win Missouri, a group that has testified in support of the bill, is confident with the bill's bipartisan support but said predictions for if the bill will land on Gov. Mike Kehoe's desk are hard.
"It only takes one or a couple of senators to completely hold something up," Kids Win Missouri director Casey Hanson said. "We did have a significant turnover in the Senate, so I know a couple of the members of the Senate who were very vocally opposed in holding this up the last two years are no longer there, but that said, we also have new senators so it's just kind of a different dynamic."
