To amend the Internal Revenue Code of 1986 to provide a credit for increasing wages paid to child care providers.

New child care employer tax credit

This bill would create a Child Care Supply Credit for employers who pay child care workers. For a taxable year, the credit would equal the smaller of (A) 5% of qualified child care wages (7% if the facility is in a rural area), or (B) the amount by which qualified wages this year exceed the prior year. You would get no credit unless your average hourly child care wage rose from the prior year. An eligible facility must provide care for at least six individuals, receive a fee, payment, or grant, and follow state or local law. Qualified wages used for this credit could not be counted for other credits. The credit would be treated as part of the General Business Credit (so you could not double-count wages), and employers who qualify could elect an immediate payment under the existing elective-payment rules. These rules would apply to taxable years beginning after the date of enactment.