Tax Credits For Costs Of COVID-19 School Closures

The bill establishes an income tax credit for the 2020 and 2021 income tax years for any taxpayer who:

• Has one or more qualified children whose school suspended in-person learning for at least 4 cumulative weeks during the 2020-21 school year due to the COVID-19 pandemic (suspension of in-person learning); and
• Incurred costs as a result of the suspension of in-person learning .

The amount of the credit allowed is either the amount of the costs incurred by the taxpayer as a result of the suspension of in-person learning or $750 for any income tax year, whichever is less; except that the maximum amount of the credit that a taxpayer may claim in the 2020 and 2021 income tax years combined shall not exceed $750 per qualified child and shall not exceed $2,500 total per taxpayer. A taxpayer is required to claim the credit for the income tax year in which the costs were incurred due to the suspension of in-person learning.

The bill also creates an income tax credit for the 2020 and 2021 income tax years for any taxpayer who:

• Has one or more qualified children who experienced the suspension of in-person learning or whose daycare center was unable to provide in-person care for the qualified child for at least 4 cumulative weeks during the 2020-21 school year due to the COVID-19 pandemic;
• Had to provide care for the qualified child due to the suspension of in-person learning or the inability of the daycare center to provide care; and
• As a result of providing such care for the taxpayer's qualified child, was unable to work and experienced a loss of income.

The amount of the credit allowed is either the amount of income the taxpayer lost as a result of not being able to work due to the suspension of in-person learning or the inability of the qualified child's daycare center to provide care or $2,500 for any income tax year, whichever is less; except that the total amount of the credit claimed in the 2020 and 2021 income tax years combined shall not exceed $2,500. A taxpayer must claim the credit for the income tax year in which the taxpayer lost income.

A taxpayer who claims either income tax credit is required to retain certain information to provide to the department of revenue upon request by the department. A taxpayer who claims one credit created in the bill is ineligible to claim the other credit created in the bill. Both credits may be carried forward for 3 years but may not be refunded.

(Note: This summary applies to this bill as introduced.)