Kansas House Bill HB2078

Kansas 2025-2026 Regular Session

• Introduced: 1/23/25
• Refer: 1/23/25

Caption

Providing an income tax credit for contributions to a child care provider or intermediary.

Summary

HB 2078 creates a new Kansas income tax credit for certain cash contributions made to qualified child care providers or nonprofit intermediaries that support child care providers. Beginning with tax year 2026, a taxpayer may claim a credit equal to 75% of a verified contribution, subject to a per-taxpayer cap of $200,000 per year and an overall statewide cap of $20 million per year. Unused credits may be carried forward for up to six years. To qualify, the child care provider or intermediary must apply to the Department of Revenue and enter into an agreement with the department. The provider or intermediary must then verify the contribution within 60 days and provide documentation to the taxpayer. Eligible contributions must be used to promote child care for children 12 years old or younger, such as facility improvements, equipment, services, staff salaries, staff training, or other quality improvements. Contributions cannot be made in exchange for child care services, except in the case of an employer purchasing child care for employees’ children, and they cannot be directed to providers in which the taxpayer or a related person has a financial interest.

Impact

The bill would add a new credit to the Kansas income tax act and create a new administrative program within the Department of Revenue to certify eligible child care providers and intermediaries, verify contributions, and enforce compliance. It would affect taxpayers making charitable-style contributions, child care facilities licensed under Kansas law, and nonprofit intermediaries that distribute funds to providers. It also establishes repayment and disqualification consequences if funds are used for ineligible purposes, and it limits the total annual fiscal exposure through both per-taxpayer and statewide caps.

Sentiment

Based on the bill text and available context, the measure appears generally supportive of child care providers and early childhood services by offering a tax incentive for private contributions. There is no recorded committee testimony or vote history in the provided materials, so there is no documented opposition or formal debate to indicate broader sentiment. The structure of the bill suggests an effort to encourage voluntary private funding rather than direct state spending.

Contention

The main potential points of contention are the fiscal cost of the credit, the $20 million annual statewide cap, and the administrative burden of verifying contributions and policing eligibility. Another likely issue is whether the credit could be used to benefit contributors with indirect financial interests in child care providers, which the bill tries to restrict through related-party rules. Concerns may also arise over the requirement that intermediaries distribute funds within two years and the penalty that permanently bars an intermediary from future participation if it mishandles a contribution verification.