Compilation of Rules and Regulations of the State of Georgia › Department 560 - RULES OF DEPARTMENT OF REVENUE › Chapter 560-7 - INCOME TAX DIVISION › Subject 560-7-8 - RETURNS AND COLLECTIONS › Rule 560-7-8-.38 - Child Care Credit, Definitions and Description

Current through Rules and Regulations filed through June 27, 2024
(1)
Definitions.
As used in this
				regulation:
(a)
Child
. The term
				"child" means a person under the age of 13 when the child care is provided who
				is a dependent of an employeeand for whom the employee can claim an exemption
				for Georgia income tax purposes.
(b)
Cost of Operation.
The term
				"cost of operation" means the reasonable, direct, operational costs incurred by
				an employer as a result of providing employer provided or employer sponsored
				child care facilities for such employer's employees. Such costs include, but
				are not limited to, salaries, supplies, rent, food, transportation, educational
				and special activities, and payments made to a qualified child care facility
				pursuant to a contractual arrangement. Such costs, however, do not include the
				cost to the employer of any property that is qualified child care
				property.
(c)
Employee.
"Employee" means any person employed full-time or part-time by an
				employer, whose actions are directed by the employer and who is subject to the
				payroll tax provided for in Article 5 of Chapter 7 of Title 48.
(d)
Employer.
"Employer" means
				any employer upon whom a Georgia income tax is imposed or who is otherwise
				required to file a Georgia income tax return.
(e)
Employer Provided.
The term
				"employer provided" refers to child care provided by the employer, offered to
				employees of the employer, and provided on the premises of the employer.
				However, the term "employer provided" does not include child care provided on
				the premises owned by the employer which are in turn leased to a third party
				providing the child care.
(f)
Employer Sponsored.
The term "employer sponsored" refers to child
				care provided for by the employer and offered to employees of the employer
				pursuant to a contractual arrangement between the employer and a party which
				operates a qualified child care facility in Georgia but only if the cost of the
				child care is paid for by the employer directly to the entity providing the
				child care.
(g)
Premises of
				the Employer.
The term "premises of the employer" means a location in
				Georgia which constitutes the workplace premises of the employer providing the
				child care or one of the employers providing the child care in the event that
				the child care property is owned jointly or severally by the taxpayer employer
				and one or more other employers. The term may also include a facility located
				within a reasonable distance from the workplace premises of the employer if
				such workplace premises are deemed by the Commissioner after application by the
				employer to be impracticable or otherwise unsuitable for the on-site location
				of the qualified child care facility. Factors to be considered in making this
				determination may include, but shall not be limited to:
1. The relative size of the qualified child
				care facility when compared to the size of the workplace premises
				site;
2. The presence of hazardous
				substances or other dangerous conditions, materials or structures on or near
				the workplace premises; or
3. Any
				other factor deemed relevant by the Commissioner to the safety and well-being
				of the children for whom the care is provided.
(h)
Qualified Child Care Facility.
The term "qualified child care facility" means any child-caring
				institution as defined under O.C.G.A. Section
				 49-5-3 which is licensed or commissioned as a "child welfare agency" by the Georgia
				Department of Human Services pursuant to O.C.G.A. Section
				 49-5-12, or approved by any successor agency having regulatory authority over child care
				services. This definition includes state regulated after school
				programs.
(i)
Qualified Child
				Care Property.
The term "qualified child care property" means all real
				and tangible personal property purchased or acquired on or after July 1, 1999,
				or which property is first placed in service on or after July 1, 1999, for use
				exclusively in the construction, expansion, improvement, or operation of an
				employer provided child care facility and for which applicable depreciation has
				been claimed for federal income tax purposes (except that depreciation is not
				required for any land that is qualified child care property). Such property may
				include amounts expended on land acquisition, improvements, buildings, and
				building improvements and furniture, fixtures, and equipment used for such
				facility when the facility is either owned or leased by the employer. Where
				property, previously owned by the taxpayer, is converted for use as a qualified
				child care facility, only those costs involved in the conversion to such
				qualified child care use shall be included. No such property shall be
				considered "qualified child care property" unless:
1. The facility is licensed or commissioned
				by the Department of Human Services pursuant to O.C.G.A. Section
				 49-5-12, or approved by any successor agency having regulatory authority over child care
				services;
2. At least 95 percent of
				the children who use the facility are children of the employees of the taxpayer
				and other employers if the child care property is owned jointly or severally by
				the taxpayer and one or more other employers; or a corporation that is a member
				of the taxpayer's "affiliated group" within the meaning of Section 1504(a) of
				the Internal Revenue Code. For the purposes of meeting the 95% requirement
				contained in this subparagraph, the number of children attending the facility
				should be reasonably representative of each employer's capital contribution to
				the facility; and
3. The taxpayer
				has not previously claimed any tax credit for the cost of operation for such
				qualified child care property placed in service prior to taxable years
				beginning on or after January 1, 2000.
(j)
Recapture Amount.
The term
				"recapture amount" means, with respect to property as to which a recapture
				event has occurred, an amount equal to the applicable recapture percentage of
				the aggregate credits claimed under O.C.G.A. Section
				 48-7-40.6(d) 
				 for all taxable years preceding the year of recapture, whether or not such
				credits were used, which amount must be added back in the tax year in which the
				recapture event occurs.
(k)
Recapture Event.
The term "recapture event" refers to any
				disposition by sale of qualified child care property by the taxpayer, or any
				other event or circumstance under which property ceases to be qualified child
				care property with respect to the taxpayer, except for:
1. Any transfer by reason of death;
2. Any transfer between spouses or incident
				to divorce;
3. Any transaction to
				which Section 381(a) of the Internal Revenue Code applies;
4. Any change in the form of conducting the
				taxpayer's trade or business so long as the property is retained in such trade
				or business as qualified child care property and the taxpayer retains a
				substantial interest in such trade or business;
5. Any accident or casualty; or
6. Any instance where qualified child care
				property can no longer function because of its structural or mechanical failure
				or its obsolescence.