Section 40-18-542 Application for Employee Tax Credit; Documentation Requirements.
AI-assisted research summary: An employer may apply for an employer tax credit, but must provide required documentation; the Department of Revenue must set the certificate format, review the documents, and deny the credit if documentation is not provided.
(a) Effective for tax years beginning on or after January 1, 2025, and ending December 31, 2027, unless extended by an act of the Legislature, an employer may apply to the Department of Revenue for an employer tax credit to be applied against applicable taxes. The employer tax credit shall be in an amount equal to 75 percent of the eligible expenses incurred by an employer; except, in the case of a small business, the employer tax credit shall be in an amount equal to 100 percent of the eligible expenses incurred by an employer. (b) For the calendar year ending December 31, 2025, the employer tax credit is limited to an aggregate amount for all employers of fifteen million dollars ($15,000,000), which amount shall increase to seventeen million five hundred thousand dollars ($17,500,000) for the calendar year ending December 31, 2026; and twenty million dollars ($20,000,000) for the calendar year ending December 31, 2027. (c) The Department of Revenue shall: (1) Provide a standardized format for, and require completion of, a certificate to be signed by the employer applying for the employer tax credit certifying that the expenses incurred by the employer were eligible expenses incurred to support the provision of child care at child care facilities for the children of employees. (2) Require the employer to provide documentation to substantiate to the satisfaction of the Department of Revenue the amount of the employer tax credit applied for pursuant to this section and that the expenses incurred by the employer were eligible expenses incurred to support the provision of child care at child care facilities for the children of employees. (3) If the employer is a pass-through entity, require that the employer identify the identity and pro rata percentage ownership of its owners. (d) The Department of Revenue shall award the tax credit to the employer after the employer provides the documentation required in subsection (c). Failure to provide the documentation required in subsection (c) shall result in the automatic denial of the employer tax credit.