HB 4517 — To maximize the utility and accessibility of West Virginia’s child care tax credit for employers

CS for HB 4517 WEST VIRGINIA LEGISLATURE REGULAR SESSION IntroducedCommittee Substitute for House Bill 4517 By Delegates Brooks, Pritt, Martin, and Petitto [Introduced[Originating Januaryin 19,the 2026;House Committee on Health and Human Resources;

referredReported to the Committee on HealthFebruary and17, Human2026] ResourcesCS thenfor Finance] Intr HB 2026R22854517 A BILL to amend and reenact §11-21-97 and §11-24-44 of the Code of West Virginia, as amended, relating to maximizing utility and accessibility of West Virginia's child care tax credit for employers by extending this credit to employer-sponsored daycare facilities accessible to the work site in addition to on-site, fully employer-provided day cares.

(7) "Employer-sponsored" refers to licensed child care services provided by a third party Intr1 CS for HB 2026R22854517 whose facility or operational costs are financially supported by one or more employers through direct payments, contracts, or subsidies.

(7)(8)” (8)Tri-Share "QualifiedChild child-careCare property"program” meansrefers allto reala property,program otherthat than1/3 land,of andthe tangibleeligible personalchild propertycare purchased,costs orwith acquired,respect orto financial sponsorship by an employereligible onchild orthat afterwill Julybe 1,paid 2022,by oreach whichof property is first placed in service on or after July 1, 2022, for use exclusively in the construction,following: expansion, improvement, or operation of an employer provided or employer sponsored child-care facility, but only if:

(A) A parent or legal guardian of the child;

(B) A employer of the parent;

and (C)The state.

(7) (9) "Qualified child-care property" means all real property, other than land, and tangible personal property purchased, or acquired, or financial sponsorship by an employer on or after July 1, 2022, or which property is first placed in service on or after July 1, 2022, for use exclusively in the construction, expansion, improvement, or operation of an employer provided or employer sponsored child-care facility, but only if:

(8) (9)(10) "Recapture amount" means, with respect to property as to which a recapture event 2 CS for HB 4517 has occurred, an amount equal to the applicable recapture percentage of the aggregate credits claimed under subsection (d) of this section for all taxable years preceding the recapture year, whether or not such credits were used.

(9) (10)(11) "Recapture event" means any disposition of qualified child-care property by the taxpayer, or any other event or circumstance under which property ceases to be qualified child- Intr HB 2026R2285 care property with respect to the taxpayer, except for:

(10) (11)(12) "Recapture percentage" refers to the applicable percentage set forth in the following table:

Five full years after the qualified child-care property is placed in service .......................................................100 The sixth full year after the qualified child-care property is placed in service ........................................................90 The seventh full year after the qualified child-care property is placed in service .....................................................80 The eighth full year after the qualified child-care property is placed in service ........................................................70 The ninth full year after the qualified child-care property is placed in service ........................................................60 3 CS for HB 4517 The tenth full year after the qualified child-care property is placed in service ........................................................50 The eleventh full year after the qualified child-care property is placed in service .....................................................40 The twelfth full year after the qualified child-care property Intr HB 2026R2285 is placed in service .....................................................30 The thirteenth full year after the qualified child-care property is placed in service ............................................20 The fourteenth full year after the qualified child-care property is placed in service ............................................10 Any period after the close of the fourteenth full year after the qualified child-care property is placed in service ....................0 (11) (12)(13) "Recapture year" means the taxable year in which a recapture event occurs with respect to qualified child-care property.

The aggregate amount of the credit shall equal 50 100 percent of the cost of all qualified child-care property purchased or acquired by the taxpayer and first placed in service during a taxable year, and such credit may be claimed at a rate of 20 percent per year over a period of five taxable years.

4 CS for HB 4517 (1) Any such credit claimed in any taxable year but not used in such taxable year may be carried forward for three20 years from the close of such taxable year.

(2) In no event shall the amount of any such tax credit allowed under subsection (b) of this Intr HB 2026R2285 section, when combined with any such tax credit allowed under subsection (e) of this section, including any carryover of such credits from a prior taxable year, exceed 100 percent of the taxpayer’s income tax liability as determined without regard to any other credits;

5 CS for HB 4517 (1) The credit otherwise allowable under subsection (b) of this section with respect to such property for the recapture year and all subsequent taxable years shall be reduced by the applicable recapture percentage;

Intr HB 2026R2285 (A) Any carryover attributable to such credits pursuant to subdivision (1), subsection (c) of this section shall be reduced, but not below zero, by the recapture amount;

and 6 CS for HB 4517 (3) The employer shall certify to the department the names of the employees, the name of the child-care provider, and such other information as may be required by the department to ensure that credits are granted only to employers who provide or sponsor approved child care pursuant to this section.

(g)(g)Tri-Share Rules.Child Care Program—An employer participating in the West Virginia Tri-Share Program is eligible to receive a nonrefundable tax credit equal to 50 percent of the employer’s program contributions for the taxable year.

— The Taxcredit Commissioner may promulgatebe suchapplied interpretive,against legislativeapplicable andstate Intrbusiness HBtaxes 2026R2285and proceduralcarried rulesforward asup the commissioner deems to befive usefulconsecutive ortaxable necessaryyears, tosubject carry out the purpose of this section and to implementrules theestablished intentby of the Legislature.Tax Commissioner.

(g) (f) Rules.

— The Tax Commissioner may promulgate such interpretive, legislative and procedural rules as the commissioner deems to be useful or necessary to carry out the purpose of this section and to implement the intent of the Legislature.

7 CS for HB 4517 (5) "Employer provided" refers to child care offered on the premises of the employer.

(7) "Employer-sponsored" refers to licensed child care services provided by a third party Intr HB 2026R2285 whose facility or operational costs are financially supported by one or more employers through direct payments, contracts, or subsidies.

(7)(8)” (8)Tri-Share "QualifiedChild child-careCare property"program” meansrefers allto reala property,program otherthat than1/3 land,of and tangible personal property purchased, or acquired, or financial sponsorship by the employereligible onchild orcare aftercosts Julywith 1,respect 2022,to oran whicheligible propertychild isthat firstwill placedbe inpaid serviceby oneach orof after July 1, 2022, for use exclusively in the construction,following: expansion, improvement, or operation of an employer provided or employer sponsored child-care facility, but only if:

(A) A parent or legal guardian of the child;

(B) A employer of the parent;

and (C)The state.

(7) (9) "Qualified child-care property" means all real property, other than land, and tangible personal property purchased, or acquired, or financial sponsorship by the employer on or after July 1, 2022, or which property is first placed in service on or after July 1, 2022, for use exclusively in the construction, expansion, improvement, or operation of an employer provided or employer sponsored child-care facility, but only if:

(i) The taxpayer and other employers in the event that the child-care property is owned 8 CS for HB 4517 jointly or severally by the taxpayer and one or more employers;

(8) (9)(10) "Recapture amount" means, with respect to property as to which a recapture event has occurred, an amount equal to the applicable recapture percentage of the aggregate credits claimed under subsection (d) of this section for all taxable years preceding the recapture year, whether or not such credits were used.

(9) (10)(11) "Recapture event" refers to any disposition of qualified child-care property by the taxpayer, or any other event or circumstance under which property ceases to be qualified child- Intr HB 2026R2285 care property with respect to the taxpayer, except for:

(10) (11)(12) "Recapture percentage" refers to the applicable percentage set forth in the following table:

9 CS for HB 4517 Five full years after the qualified child-care property is placed in service .......................................................100 The sixth full year after the qualified child-care property is placed in service ........................................................90 The seventh full year after the qualified child-care property is placed in service .....................................................80 The eighth full year after the qualified child-care property is placed in service ........................................................70 The ninth full year after the qualified child-care property is placed in service ........................................................60 The tenth full year after the qualified child-care property is placed in service ........................................................50 The eleventh full year after the qualified child-care property is placed in service .....................................................40 The twelfth full year after the qualified child-care property Intr HB 2026R2285 is placed in service .....................................................30 The thirteenth full year after the qualified child-care property is placed in service ............................................20 The fourteenth full year after the qualified child-care property is placed in service ............................................10 Any period after the close of the fourteenth full year after the qualified child-care property is placed in service ....................0 (11) (12)(13) "Recapture year" means the taxable year in which a recapture event occurs with respect to qualified child-care property.

— A taxpayer shall be allowed a credit against the tax imposed under this article for the taxable year in which the taxpayer first 10 CS for HB 4517 places in service qualified child-care property or places funds towards an employer-sponsored child care facility and for each of the ensuing four taxable years following such taxable year.

(2) In no event shall the amount of any such tax credit allowed under subsection (b) of this Intr HB 2026R2285 section, when combined with any such tax credit allowed under subsection (e) of this section, including any carryover of such credits from a prior taxable year, exceed 100 percent of the taxpayer’s income tax liability as determined without regard to any other credits;

(D) The amount of qualified child-care property acquired in prior taxable years and the cost 11 CS for HB 4517 of such property;

Intr HB 2026R2285 (A) Any carryover attributable to such credits pursuant to subdivision (1) of subsection (c) of this section shall be reduced, but not below zero, by the recapture amount;

— In addition to the tax credit provided under subsection (b) of this section, a tax credit against the tax imposed under this article shall be granted to an 12 CS for HB 4517 employer who provides or sponsors child care for employees.

— In the case of non-profit Intr HB 2026R2285 corporations organized under Internal Revenue Code §501(c)(3) or §501(c)(6), which are exempt from tax under this article pursuant to §11-24-5 of this code, a credit in the amount calculated under the provisions of this section shall be available as a transferrable credit that may be transferred, sold, or assigned to any other taxpayer to be applied against the tax owed under this article.