To amend sections 5725.98, 5726.98, 5729.98, 5747.98, and 5751.98 and to enact sections 5725.39, 5726.62, 5727.242, 5727.301, 5729.22, 5736.51, 5747.87, and 5751.56 of the Revised Code to authorize nonrefundable tax credits for certain employer-provided child care expenditures.
HB 167 would create a new Ohio tax credit for certain employer-provided child care expenditures and add that credit to the state’s tax code across multiple tax chapters. The bill defines “eligible expenses” to include amounts that would qualify under the federal child care tax credit rules, as well as direct payments by an employer to an employee for child care at a licensed child care program. An employer could apply to the tax commissioner for a certificate, and the commissioner would issue a credit certificate if the application is approved. The maximum credit would be the lesser of $500,000 or the employer’s eligible child care expenses incurred in the prior calendar year.
The bill amends the credit-ordering provisions for several Ohio taxes so that the new child care credit can be claimed against domestic and foreign insurance taxes, the financial institutions tax, public utility taxes, the commercial activity tax, the personal income tax, and the financial institutions tax. It also creates corresponding claim procedures and carryforward rules, generally allowing unused credit amounts to be carried forward for up to five years, or in the case of the commercial activity tax, up to nineteen tax periods. The bill further provides that the credit is nonrefundable and may be claimed only to the extent authorized by the certificate.
In practical terms, the bill would reduce tax liability for employers that spend money on child care benefits for workers, potentially encouraging businesses to offer or subsidize child care as a workforce retention and recruitment tool. It would also require the Department of Taxation to administer an application-and-certificate process and to integrate the new credit into existing statutory credit-priority systems. The bill’s effective-date language indicates that the new credit would apply to applications submitted on or after the first day of the first January following the effective date.
The general sentiment reflected in the available record is limited because there are no committee transcripts or recorded votes. Based on the bill’s structure and caption, the measure appears to be a pro-business, pro-family policy intended to support working parents and employer-sponsored child care. Because the bill is only introduced and has not advanced in the available history, there is no documented floor or committee debate to show broader support or opposition.
The main point of potential contention is fiscal: the bill would create a new tax expenditure that lowers revenue for the affected tax bases, and lawmakers may differ on whether the child care incentive is an efficient use of the tax code. Another possible issue is administrative complexity, since the credit depends on a certificate process, annual application deadlines, and coordination across multiple tax statutes. Employers, tax practitioners, and child care advocates would be the most directly affected parties, with employers benefiting from the credit and the state foregoing some tax revenue.
HB 167 would add a new nonrefundable employer-provided child care tax credit to Ohio law and insert that credit into the ordering rules for several existing taxes, including insurance taxes, the financial institutions tax, the commercial activity tax, and the personal income tax. It creates new sections in the Revised Code to define eligible child care expenses, establish an application and certification process with the tax commissioner, set a maximum annual credit amount, and authorize carryforwards. The bill also repeals and replaces the current credit-ordering provisions in the affected sections so the new credit is integrated into Ohio’s tax administration framework.
There is little direct evidence of debate because no committee transcript or vote history is available, and the bill remains in introduced status. On its face, the measure reflects a supportive posture toward employer-sponsored child care and workforce assistance, suggesting likely appeal to employers and child care advocates. At the same time, the absence of recorded discussion means there is no documented consensus or opposition in the available materials.
The likely areas of contention are the revenue cost of creating a new tax credit, whether the incentive would meaningfully expand child care access or simply subsidize employers that already provide benefits, and the administrative burden of certifying eligible expenses and tracking carryforwards across multiple tax types. Businesses seeking the credit would favor the measure, while fiscal conservatives or budget-focused lawmakers may question whether a tax credit is the best policy tool. Child care providers and working families may support the bill if they believe it will expand employer assistance, but they may also scrutinize whether the benefits reach employees broadly enough.