Relating to tax credits by creating the maternity group home and the strong families tax credits available against the individual, corporate, franchise, insurance premium, and moneys and credits taxes, and including applicability provisions

This bill creates maternity group home and strong families tax credits available against the individual, corporate, franchise, insurance premium, and moneys and credits taxes. MATERNITY HOME TAX CREDIT. The bill defines “maternity group home” to mean a community-based residential home that provides room and board, personal care, supervision, training, support, and education in a family environment for women who are either pregnant or who have given birth within the preceding 24 months and live with their children, and includes overnight room accommodations and administrative and office space for those persons who provide such services. The amount of the credit shall equal 100 percent of a person’s donation to a maternity group home. The bill specifies that the amount of the donation for which the tax credit is claimed shall not be deductible for state income tax purposes. Any credit in excess of the tax liability is not refundable but the excess for the tax year may be credited to the tax liability for the following five years or until depleted, whichever is earlier.5 million. The maximum amount of tax credits granted for donations to an organization operating a maternity group home shall not annually exceed $500,000. The bill requires the department of revenue to administer the credit and to approve applications on a first-come, first-served basis until the maximum amount of tax credits authorized for the year has been reached. A taxpayer must submit an application to the department for each separate and distinct donation within six months following the tax year of the donation in such a manner approved by the department. The bill also requires the department to develop a wait list in the order the applications are received if applications for the credit exceed the annual maximum amounts authorized. The department shall adopt rules to administer the tax credit. The tax credit applies to tax years beginning on or after January 1, 2027. STRONG FAMILIES TAX CREDIT. The bill creates a strong families tax credit available against the individual, corporate, franchise, insurance premium, and moneys and credit taxes. The strong families tax credit is equal to 100 percent of the amount of a voluntary cash contribution made by the taxpayer to an organization that is exempt from taxation under section 501(c)(3) of the Internal Revenue Code that provides comprehensive case management services for at-risk families or fatherhood parenting services in this state. To be eligible to claim the credit, all of the following must apply: (1) a deduction is not taken for any amount of the contribution for state tax purposes, (2) the contribution is not designated to personally benefit the taxpayer, (3) the organization does not receive more than 50 percent of revenues from governmental entities, (4) 95 percent of annual revenues are allocated to providing core services, (5) the organization has provided services in this state for at least three consecutive years, and (6) the organization does not provide abortion services. Any credit in excess of the tax liability is not refundable but the excess for the tax year may be credited to the tax liability for the following five tax years or until depleted, whichever is the earlier. In order for the taxpayer to claim the strong families tax credit, a taxpayer must submit an application to the department of revenue (department) detailing the contribution made to the organization. The application must be approved by the department in order to claim the tax credit. The application must be filed with the department by December 31 of the tax year for which the credit is claimed. The department shall accept and approve applications on a first-come, first-served basis until the maximum amount of tax credits that may be claimed pursuant to the bill is reached. If for a tax year the maximum value of tax credits applied for exceeds the maximum amount, the department is required to establish a wait list for the tax credit. The cumulative value of tax credits approved by the department annually pursuant to the bill shall not exceed $5 million. The department shall not approve applications made to any organization that exceed $1 million in the aggregate in a calendar year, unless credits from the $5 million maximum remain unclaimed. The bill requires an organization to initially register with the department. The organization’s registration shall include proof of section 501(c)(3) status, a list of the services the organization provides, and the members of the governing board of the organization. Once the organization has registered, it is not required to subsequently register unless the services provided change or members of the organization’s governing board change. Beginning January 31, 2028, and each January 31 thereafter, the department shall report information about the tax credit to the general assembly the name of each organization that has registered with the department, the number of families receiving services from each organization, and the amount of tax credits approved from contributions made to each organization. The department is required to adopt rules to administer the tax credit. The tax credit applies to tax years beginning on or after January 1, 2027.