H.R. 10815: Bright Beginnings Act

This bill would create a new federal tax credit for certain child care providers that spend money to make their facilities and services more accessible to children with developmental disabilities.

What the credit would do

• It would add a new tax credit to the Internal Revenue Code for eligible child care providers.
• The credit would equal up to $10,000 per taxable year for eligible expenditures.
• The credit would be part of the general business credit, meaning providers could use it against federal business taxes.
• The bill also allows the credit to be taken as an elective payment in some cases, which can allow eligible providers to receive the value of the credit even if they do not have enough tax liability to use it normally.

Who would qualify

The bill defines an eligible child care provider as a center-based child care provider that:

• charges for its services,
• operates for less than 24 hours a day,
• serves children who are under age 14, and
• is legally operating under state law and meeting applicable state and local requirements.

What expenses would count

The credit would apply to money spent to “advance innovation and access” for children with developmental disabilities receiving child care services. The bill defines these terms broadly:

• Innovation includes designing and using flexible environments, tools, and practices that reflect different developmental, sensory, and learning needs and reduce barriers.
• Access refers to physical, sensory, communication, social, and structural conditions that help a child participate in the environment in a way that works for them.
• Developmental disability includes diagnosed developmental delays in areas such as cognitive, physical, communication, social, emotional, or adaptive development, as well as conditions likely to cause such delays.

Other rules

• Businesses in the same controlled corporate group or under common control would generally be treated as one taxpayer for purposes of the credit.
• A provider could not also claim another deduction or credit for the same expenses used to calculate this new credit.
• The Treasury Department would be allowed to issue regulations or guidance to carry out the law.

Timing

• The credit would apply to amounts paid or incurred after December 31, 2026.
• The credit would expire for amounts paid or incurred after December 31, 2031.

Relevant Companies

None found