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LC 1234

Provide for tax-exempt child care savings accounts

2025 Regular Session

LC 1234 - Provide for tax-exempt child care savings accounts OverviewBill Number: LC 1234 Title: Provide for tax-exempt child care savings accountsStatus: (LC) Draft Died in Proce

(LC) Draft Died in Process
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Bill Summary · LC 1234

LC 1234 - Provide for tax-exempt child care savings accounts

Overview

Bill Number: LC 1234
Title: Provide for tax-exempt child care savings accounts
Status: (LC) Draft Died in Process
Introduced: November 12, 2024

Purpose and Intent

The purpose of this bill is to encourage and facilitate savings for child care expenses by creating tax-exempt child care savings accounts. The intent is to help families better afford the high costs of child care, which can be a significant financial burden, especially for low- and middle-income households.

Key Provisions

  • Establishes "child care savings accounts" that allow individuals to contribute pre-tax dollars to be used for qualified child care expenses
  • Contributions to these accounts would be exempt from state income tax, and withdrawals for eligible child care costs would also be tax-free
  • Eligible expenses include daycare, preschool, after-school programs, summer camps, and other qualified child care services
  • Accounts could be opened by parents, grandparents, or other family members to save for a child's care
  • Annual contribution limits would be set, potentially indexed to inflation
  • Accounts would be portable, allowing funds to be used for multiple children over time

Affected Parties and Impacts

  • Families with children would be the primary beneficiaries, able to save for child care costs in a tax-advantaged manner
  • Child care providers may see increased demand as more families can afford their services
  • The state would forgo some tax revenue from the tax-exempt contributions and withdrawals, but could see offsetting benefits from increased child care access and affordability

Procedural and Timeline Considerations

This bill is currently in the draft (LC) stage and has not been formally introduced in the legislature. If introduced, it would need to go through the full legislative process, including committee hearings, floor votes in both chambers, and potential amendments before reaching the governor's desk. Given its current status, the bill is unlikely to advance further in the current legislative session.

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

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