Missouri Independent: Child care tax credits legislation scores bipartisan support in Missouri House

Child care tax credits legislation scores bipartisan support in Missouri House

by Natanya Friedheim, Missouri Independent
February 25, 2025

A bill to create three new child care tax credits received initial approval by the Missouri House on Tuesday. A similar measure received bipartisan support last year but fell victim to Republican infighting in the Senate.

The measure would help employers foot the bill for their employees’ child care costs and encourage existing providers to grow their capacity. Shields said three-fourths of Missouri’s 115 counties are considered “child care deserts.” It needs to be approved one more time in the House before heading to the Senate.

“We have a child care crisis in our state. We’re all familiar with it,” state Rep. Brenda Shields, a Republican from St. Joseph, who sponsored the bill, said during House debate Tuesday. “We hear from our business leaders across the state that they have trouble recruiting and retaining employees because the lack of child care.”

The bill creates three tax credits. Under the first, people or businesses who donate to child care centers would receive a tax credit worth 75% of their donation. The donor cannot personally benefit from the contribution; for example, a parent cannot make a donation and expect lower tuition.

The second is for businesses that help pay for their employees’ child care costs or create child care programs for their employee’s children.

The third allows child care providers to claim a tax credit worth up to 30% of expenses related to construction projects. The credit also grants tax relief equal to the provider’s employer withholding tax, which applies to providers with at least three employees who work at least 10 hours per week and have been employed for at least three months.

A number of business groups have voiced support for the measure, including the Missouri Chamber of Commerce and Industry and the Columbia Chamber of Commerce.

“Without child care, Missouri’s economy cannot grow,” Shields said.

The credits cannot be transferred to another person or entity and cannot reduce a citizen’s tax burden below zero, meaning the credits cannot be used to add to a tax refund. The measures proposed this year would expire in 2026 without reapproval by the legislature due to a “sunset” provision included in the bill. Parents would not be able to claim tax credits for child care tuition under any of the proposed credits.

State Rep. Sherri Gallick, a Republican from Belton, spoke about her own experience as a single parent while voicing her support for the bill.

“My career took a backseat because I didn’t have adequate child care,” she said.

Earlier, the bill passed unanimously out of the House Economic Development Committee. Three of 10 members of the rules committee, all Republicans, voted against its passage, and it faced additional Republican opposition on the floor.

STate Rep. Jamie Gragg, an Ozark Republican, said the credits would pit the school system in competition with day cares. State Rep. Terry Thompson, a Lexington Republican, also spoke in opposition to the measure, citing a bill he said he planned to propose. This is the third year Shields has introduced tax credits for child care costs.

“Right now,” Shields said, “child care costs more than your freshman year at university.”

This story originally appeared in the Columbia Missourian. It can be republished in print or online. 

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