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Bill

HB 403

Income tax, state; credits for child care-related expenses.

2026 Regular Session Introduced by David Reid

Virginia would allow income tax credits for child care expenses, offsetting family costs but reducing state tax revenue by an amount detailed in the fiscal impact analysis.

Subcommittee recommends laying on the table (7-Y 2-N)
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Bill Summary · HB 403

Legislative bill overview

HB 403 would establish state income tax credits for Virginia residents who incur child care-related expenses. The bill aims to provide financial relief to families by allowing them to claim credits against their state income tax liability for costs associated with child care services. This represents a new tax expenditure for the state.

Why is this important

Child care costs are a significant financial burden for working families, often representing 10-20% of household income in Virginia. Tax credits could increase affordability and workforce participation, particularly for lower-income families. However, the fiscal impact statement suggests measurable costs to state revenue that warrant careful evaluation.

Potential points of contention

  • Revenue impact: The fiscal impact statement was requested, indicating concerns about the cost to state coffers and whether the state can afford this tax expenditure amid other budget priorities
  • Income eligibility thresholds: Questions likely exist about whether credits should be limited to lower-income families or available broadly, affecting both cost and fairness perception
  • Credit structure and adequacy: Debate over whether the credit amount meaningfully addresses actual child care costs or merely provides token relief while complicating tax administration

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

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