§ 45F. Employer-provided child care credit
(a)
In general
For purposes of section
38, the employer-provided child care credit determined under this section for the taxable year is an amount equal to the sum of—
of the taxpayer for such taxable year.
(b)
Dollar limitation
The credit allowable under subsection (a) for any taxable year shall not exceed $150,000.
(c)
Definitions
For purposes of this section—
(1)
Qualified child care expenditure
(A)
In general
The term “qualified child care expenditure” means any amount paid or incurred—
(i)
to acquire, construct, rehabilitate, or expand property—
(II)
with respect to which a deduction for depreciation (or amortization in lieu of depreciation) is allowable, and
(III)
which does not constitute part of the principal residence (within the meaning of section
121) of the taxpayer or any employee of the taxpayer,
(2)
Qualified child care facility
(A)
In general
The term “qualified child care facility” means a facility—
(ii)
which meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including the licensing of the facility as a child care facility.
Clause (i) shall not apply to a facility which is the principal residence (within the meaning of section
121) of the operator of the facility.
(B)
Special rules with respect to a taxpayer
A facility shall not be treated as a qualified child care facility with respect to a taxpayer unless—
(d)
Recapture of acquisition and construction credit
(1)
In general
If, as of the close of any taxable year, there is a recapture event with respect to any qualified child care facility of the taxpayer, then the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of—
(B)
the aggregate decrease in the credits allowed under section
38 for all prior taxable years which would have resulted if the qualified child care expenditures of the taxpayer described in subsection (c)(1)(A) with respect to such facility had been zero.
(2)
Applicable recapture percentage
(A)
In general
For purposes of this subsection, the applicable recapture percentage shall be determined from the following table:
The applicable
If the recapture event
recapture
occurs in:
percentage is:
Years 1–3
100
Year 4
85
Year 5
70
Year 6
55
Year 7
40
Year 8
25
Years 9 and 10
10
Years 11 and thereafter
0.
(3)
Recapture event defined
For purposes of this subsection, the term “recapture event” means—
(A)
Cessation of operation
The cessation of the operation of the facility as a qualified child care facility.
(B)
Change in ownership
(i)
In general
Except as provided in clause (ii), the disposition of a taxpayer’s interest in a qualified child care facility with respect to which the credit described in subsection (a) was allowable.
(ii)
Agreement to assume recapture liability
Clause (i) shall not apply if the person acquiring such interest in the facility agrees in writing to assume the recapture liability of the person disposing of such interest in effect immediately before such disposition. In the event of such an assumption, the person acquiring the interest in the facility shall be treated as the taxpayer for purposes of assessing any recapture liability (computed as if there had been no change in ownership).
(4)
Special rules
(A)
Tax benefit rule
The tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section
39 shall be appropriately adjusted.
(B)
No credits against tax
Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section
55.
(C)
No recapture by reason of casualty loss
The increase in tax under this subsection shall not apply to a cessation of operation of the facility as a qualified child care facility by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary.
(e)
Special rules
For purposes of this section—
(1)
Aggregation rules
All persons which are treated as a single employer under subsections (a) and (b) of section
52 shall be treated as a single taxpayer.
(2)
Pass-thru in the case of estates and trusts
Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section
52 shall apply.
(f)
No double benefit
(1)
Reduction in basis
For purposes of this subtitle—
(A)
In general
If a credit is determined under this section with respect to any property by reason of expenditures described in subsection (c)(1)(A), the basis of such property shall be reduced by the amount of the credit so determined.
(B)
Certain dispositions
If, during any taxable year, there is a recapture amount determined with respect to any property the basis of which was reduced under subparagraph (A), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term “recapture amount” means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (d).