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119-hr-10657119th CongressWALLET

SPROUT Act of 2026

Sponsored By: Representative Crank, Jeff [R-CO-5]

Introduced

Summary

100% first-year depreciation for early childhood education centers would create a temporary tax incentive to push private investment into licensed child care facilities.

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  • Families: Could increase the chance of new licensed spots for children under age 5 by making construction more attractive to investors.
  • Property owners and developers: Owners who elect the rule could deduct 100% of a qualified center's adjusted basis in the year it is placed in service. The property must begin original use with the taxpayer and be placed in service in the United States before December 31, 2031.
  • Providers and tax rules: To qualify the space must be used by a state-licensed early childhood program or be tied by a binding contract to a licensed provider before construction starts. Qualified centers are treated as Section 1245 property, so depreciation may be recaptured under existing rules when the property is sold.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 0 costs, 1 mixed.

Tax break for childcare center owners

If enacted, the bill would let a taxpayer elect to deduct 100% of the adjusted basis of a qualifying early childhood education center in the year it is placed in service. To qualify, the property must be part of a State‑licensed center for children under age five (or the owner must have a written, binding contract with a licensed provider made before construction), original use must begin with the taxpayer, and the property must be placed in service after enactment and before Dec. 31, 2031. The taxpayer would reduce the property's adjusted basis by the deduction so that basis is not depreciated again, and the property would be treated as Section 1245 property so prior depreciation may be recaptured as ordinary income on a sale. The Secretary could extend the Dec. 31, 2031 placed‑in‑service deadline if an act of God prevented timely placement in service, but the bill does not set a length for any extension.

Sponsors & CoSponsors

Sponsor

Crank, Jeff [R-CO-5]

CO • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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