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HB 316

Child Tax Credit Amendments

2025 General Session Introduced by Mark Strong

HB 316 expands early childhood support by adding 32,000 NC Pre-K slots, boosting subsidized child care, and reenacting the state child tax credit to lower family costs.

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Bill Summary · HB 316

Summary — HB 316: Child Care Act (2025 session)

Status: Passed first reading (2025 session)
Primary focus: Early childhood education, child-care subsidies, school nutrition, and related tax credits and workforce development.

Main purpose

HB 316 (the "Child Care Act") is a package bill designed to expand access to early childhood education and childcare supports in the State, reduce family costs for child care and school lunches, support publicly provided childcare (including at community colleges), and encourage development of a childcare workforce (including study of a high‑school apprenticeship model). It also reenacts a state child care / employment‑related tax credit.

Key provisions

  • Reenactment and recodification of the North Carolina child tax credit: Restores the State credit tied to the federal child / dependent care (Section 21 of the Internal Revenue Code). The statutory framework restates applicable percentage bands (by adjusted gross income and dependent age) and maintains existing caps on eligible employment‑related expenses (maximum $3,000 for one qualifying individual; $6,000 for two or more), subject to other limitations (credit not refundable beyond tax liability and reduced for nonresidents/part‑year residents).

  • NC Pre‑K expansion: Appropriates $200,000,000 in recurring funds per year (for the 2025–2027 biennium) to the Department of Health and Human Services, Division of Child Development and Early Education, to expand NC Pre‑K slots by 32,000 and to cover all eligible 4‑year‑old children.

  • Increased subsidized child care funding: Appropriates $35,000,000 in recurring funds per year (2025–2027) to increase funding for subsidized child care.

  • Free school lunches by allocation: Directs the State Board of Education to allocate funds to school food authorities so public school lunches can be offered at no cost to students “to the extent funds are available.” Allocation criteria must be developed and must consider average daily membership, counts of students eligible for free/reduced price meals, estimated National School Lunch Program receipts, prior‑year expenditures, nutrition and local sourcing, and other relevant cost/operation factors.

  • Public child care at community colleges: Appropriates funds (text indicates appropriations to support public child care provided by community colleges — the bill directs funding to this purpose; specific dollar amounts are included elsewhere in the bill package).

  • Apprenticeship feasibility study: Requires a report on the feasibility and advisability of a high‑school child care apprenticeship program to explore pathways into the childcare workforce.

Who is affected

  • Families with young children (particularly low‑ and moderate‑income) — through expanded Pre‑K slots, higher childcare subsidy funding, and reduced lunch costs.
  • Early childhood providers, Pre‑K programs, and community colleges — through new state funding and program expansion.
  • School food authorities and local school systems — required to implement allocation criteria and provide no‑cost lunches where funded.
  • State agencies — DHHS (Division of Child Development and Early Education) and the State Board of Education will administer appropriations and allocation mechanisms.
  • State taxpayers / budget — increased recurring appropriations.

Fiscal and timeline notes

  • Direct appropriations in the bill text: $200 million recurring per year for Pre‑K expansion and $35 million recurring per year for child care subsidy (for the 2025–2027 biennium).
  • The bill reenacts an expired tax credit provision and sets administration rules for claiming the credit.
  • Implementation will require agency rulemaking, allocation methodology development, and program expansion logistics (provider capacity, workforce recruitment, and contracting).
  • Next procedural steps: after first reading, the bill proceeds through committee and calendar stages; appropriations and program roll‑out are subject to enacted budget and administrative timelines.

Potential impacts and considerations

  • Increased access to Pre‑K and subsidized child care could reduce family childcare costs, improve school readiness, and increase parental labor force participation.
  • Significant recurring state cost (at least $235M/year as specified for two line items); additional costs may follow for school lunch allocations and community college childcare operations.
  • Operational challenges include rapidly expanding program capacity, recruiting/retaining childcare workers, and ensuring equitable distribution of school lunch funds.
  • Outcomes and workforce implications may be informed by the required feasibility report on a high‑school childcare apprenticeship model.

If you want, I can:
- Extract the exact statutory language for the reenacted child credit (including the percentage table) and present it in plain language; or
- Prepare a one‑page fiscal impact checklist for state and local agencies to aid implementation planning.

Compiled from official sources — confirm details with the bill’s official record.

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