Legislation Would Give Tax Credits To Companies That Help Workers Afford Childcare

MONTGOMERY, Ala. (AP) — Alabama lawmakers on Tuesday advanced legislation that would provide state tax breaks to businesses that help their employees afford childcare.

The House Ways and Means Education Committee approved the bill, which was backed by both advocacy groups for women and companies. The bill now moves to the full House for further debate and could be in line for a vote as soon as Thursday.

House Minority Leader Anthony Daniels, the bill's sponsor, said the goal is to help struggling families to afford childcare and to help businesses that are struggling to find workers.

“As we focus on increasing the workforce participation rate, we know that women have had to make decisions on breaking even on childcare costs or staying at home with their children. It's easier just to stay home because you are losing money basically paying for childcare," Daniels said.

The bill would set aside $15 million in tax credits that could be claimed by companies that provide childcare stipends, on-site day care or reserved spots at licensed facilities. The tax credit program would begin in 2025 and end on Dec. 31, 2027. After evaluating the cost and effectiveness of the program, lawmakers could choose to extend the tax credit.

Melanie Bridgeforth, president and CEO of Women’s Foundation of Alabama, said the proposal aims to provide incentives to companies that are investing in childcare for their employees.

“For women and families that need to be in the workforce, having access to childcare is a critical barrier and we’ve known this for a very long time. This is not new news. But this is one of the new solutions,” Bridgeforth said.

The proposal also would provide tax credits and grants to providers, with incentives aimed at expanding the availability of care and improving quality.

The legislation would provide $5 million in tax credits to childcare providers who participate in the Department of Human Resources' Quality Rating Improvement System, which provides ratings to programs that meet defined program standards. It would also provide $5 million in grants that nonprofit providers, including church facilities, could seek to help improve quality or expand capacity.