An Act to Provide an Income Tax Credit for Employer-supported
Maine Legislature, Session 132, LD 0203
Committee: Taxation
Sponsors: STEWART
Amends: 36 MRSA §5217, 36 MRSA §5217-G

Legislative Document
No. 203
S.P. 90
In Senate, January 14, 2025
An Act to Provide an Income Tax Credit for Employer-supported 
Child Care
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator STEWART of Aroostook.
Cosponsored by Senators: BENNETT of Oxford, BICKFORD of Androscoggin, LIBBY of 
Cumberland, Representative: GUERRETTE of Caribou.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5217, as amended by PL 2015, c. 267, Pt. DD, §22, is repealed.
Sec. 2.  36 MRSA §5217-G is enacted to read:
§5217-G.  Employer-supported child care credit
1.  Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Employing unit" has the same meaning as in Title 26, section 1043, subsection 10.
B.  "Providing child care services" means expending funds or providing in-kind 
resources to build, furnish, license, staff, operate or subsidize a child care center 
licensed by the Department of Health and Human Services to provide early care and 
education services to children of employees of the employing unit at no profit to the 
employing unit or to contract with a child care facility licensed by or registered with 
the department to provide early care and education services to children of employees 
of the employing unit. "Providing child care services" includes payments made by an 
employing unit to an employee for purposes of paying for early care and education 
services for children of the employee under a dependent care assistance program and 
the provision of child care resource and referral services to employees.
2.  Credit allowed for child care expenses. For tax years beginning on or after January 
1, 2026, an employing unit is allowed a refundable credit against the tax otherwise due 
under this Part for each tax year in an amount equal to the lesser of:
A.  Fifty percent of the costs incurred in providing child care services; and
B.  Three thousand dollars for each child of an employee of the employing unit for 
which the employing unit is providing child care services.
3.  Carry-over. Any unused credit under this section may be carried over to the 
following year or years for a period not to exceed 15 years.
4.  Evaluation; specific public policy objectives. Beginning in 2030, the credit 
provided under this section is subject to ongoing legislative review in accordance with Title 
3, chapter 37. In developing evaluation parameters to perform the review, the Office of 
Program Evaluation and Government Accountability, the joint legislative committee 
established to oversee program and government accountability matters and the joint 
standing committee of the Legislature having jurisdiction over taxation matters shall 
consider whether the specific public policy objectives and economic benefit of the credit 
provided under this section outweigh the loss of revenue to the State.
SUMMARY
This bill repeals the law governing the employer-assisted day care income tax credit, 
which by its own terms does not apply to tax years beginning on or after January 1, 2016.  
The bill authorizes, for tax years beginning on or after January 1, 2026, a refundable tax 
credit for an employer that pays or provides in-kind resources for child care for the children 
of its employees. The amount of the annual credit is 50% of the amount expended or $3,000 
per child, whichever is lower. The bill also provides that the credit is subject to ongoing 
legislative review.