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SB 3420

INC TAX-CHILD CARE

104th Regular Session Introduced by Chris Balkema and 2 co-sponsors

Illinois SB 3420 aims to provide financial relief to families by expanding or creating state income tax credits or deductions for qualified child care expenses.

Rule 3-9(a) / Re-referred to Assignments
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Bill Summary · SB 3420

Overview

SB 3420 (Illinois, 104th Session) is a bill focused on state income tax provisions related to child care. The bill appears to address adjustments, credits, or exemptions tied to child care costs for taxpayers. Its sponsors include Graciela Guzmán, Javier Cervantes, and Chris Balkema (co-sponsors).

Purpose and Intent

  • Clarifies and potentially expands Illinois income tax provisions affecting child care.
  • Aims to provide financial relief or incentives to taxpayers with child care expenses, improving affordability and access for families.
  • Aligns state tax policy with broader goals of supporting working families and enabling parental participation in the workforce.

Key Provisions and Changes (as described)

Note: The exact statutory text is not provided here, but typical elements in a bill of this nature may include:
- Creation or expansion of a tax credit or deduction tied to qualified child care expenses.
- Eligibility criteria for filers (e.g., filing status, income thresholds, dependent requirements).
- Definitions of qualified child care services and expenses (including care for children under a certain age, or care for dependents with disabilities).
- Limitations on credit amounts (annual maximums, percentage of eligible expenses, phase-outs based on income).
- Interaction with federal child and dependent care tax credit (CDCTC) or other credits/deductions to determine whether the state credit is refundable, nonrefundable, or partially refundable.
- Required documentation or substantiation to claim the credit (e.g., receipts, provider information, or tax forms).
- Effective date and whether the provisions apply to tax year 20XX or retroactively.

Affected Parties

  • Individual Illinois taxpayers who incur qualified child care expenses.
  • Families with dependent children who use licensed or qualified child care providers.
  • Tax preparers and employers/child care providers who may need to provide documentation or reporting information.
  • State revenue department responsible for administering the tax credit or deduction.

Procedural and Timeline Considerations

  • Legislative process steps (pending committee action, potential amendments, floor votes in both chambers).
  • Effective date: when the tax credit/deduction would begin to apply (often for the next tax year or a specified future year).
  • Annual or periodic renewal or sunset provisions (whether the credit/deduction must be reauthorized).
  • Any conformity with federal tax changes or budgets, and interaction with existing state tax credits.

Potential Impacts

  • Financial relief for families with child care costs, potentially reducing after-tax cost of care.
  • Possible increase in demand for licensed child care services as the credit incentive improves affordability.
  • Administrative impact on the Illinois Department of Revenue (reporting requirements, audits, compliance).
  • Revenue impact to the state budget, depending on credit size, eligibility, and take-up rates.

Additional Notes

  • Specific dollar amounts, income thresholds, percentage rates, and sunset provisions are not provided in the summary available. For a precise understanding, refer to the bill’s text and fiscal notes, which would detail:
    • Credit/deduction amount and calculation
    • Eligible expenses and providers
    • Interaction with federal CDCTC
    • Eligibility limitations and phase-outs
    • Effective date and any sunset clauses

If you’d like, I can tailor this summary further once the bill’s substantive text or fiscal notes are available, or compare SB 3420 to existing Illinois child care tax provisions.

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

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