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Bill

HF 1563

Individual income and corporate franchise taxes; subtraction for employer-provided dependent care assistance allowed, and tax credit for employer-provided child care expenses established.

2025-2026 Regular Session Introduced by Andrew Myers and 4 co-sponsors

Minnesota bill creates employer tax incentives—income subtractions and tax credits—for providing dependent care assistance and child care expenses to employees.

Author added Zeleznikar
#children-childcareandfacilities #corporationsandpartnerships #taxation-income
0
WeVote Research Nonpartisan
Bill Summary · HF 1563

Legislative bill overview

HF 1563 creates two tax incentives for employers who provide childcare support to their employees: a subtraction from taxable income for employers offering dependent care assistance programs, and a new tax credit for employers providing child care expenses. The bill aims to make childcare more affordable and accessible while incentivizing employers to offer these benefits.

Why is this important

Childcare costs represent a significant financial burden for working families, with expenses often consuming 10-30% of household income. By reducing employer tax obligations for providing these services, the bill could increase childcare access and affordability while potentially improving employee retention and workplace productivity. This addresses both workforce development and family economic security.

Potential points of contention

  • Tax revenue impact: The bill reduces state tax collections by allowing both subtractions and credits, creating budget pressure that may require offsetting cuts or revenue sources elsewhere
  • Equity concerns: Tax incentives primarily benefit employers with capacity to offer these programs; small businesses and lower-wage employers may lack resources to participate, potentially widening inequities
  • Program effectiveness: No spending cap or performance metrics specified; unclear whether tax incentives will meaningfully increase childcare availability or primarily benefit employers already offering these benefits

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

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