a. Definitions. For purposes of this section:
1. Child care program. The term "child care program" means a child care program for which a permit to operate such program has been issued by the department of health and mental hygiene pursuant to article forty-seven of the health code.
2. Child care rate. The term "child care rate" means the weekly child care subsidy market rates, based on the sixty-ninth percentile of the 2017-18 New York state child care market rate survey, for infant and toddler care provided by a permitted day care center in county cluster five, as reflected in the 2019 child care market rate survey report published by the New York state office of children and family services in compliance with section 98.45 of title forty-five of the code of federal regulations, provided that the department of finance may, by rule, revise such rates based on subsequent editions of the child care market rate survey report, as published by such office, or any other similar report published by such office in compliance with such section.
3. Child care seats. The term "child care seats" means the maximum number of children to be allowed on the premises of a child care program at any time that such program is in operation as specified on the permit issued for such program by the department of health and mental hygiene.
4. Child care seats that are occupied. The term "child care seats that are occupied" means, for each service year in which a child care program is in operation, the average daily number of children in attendance on the premises of such child care program.
5. Creates child care. The term "creates child care" means the making available of child care seats in a child care program by a taxpayer, directly or through a third party, for employees of such taxpayer, where such child care program was not available prior to April first, two thousand twenty-two, provided that the costs imposed on such employees for such child care program do not exceed forty percent of the child care rate.
6. Expands child care. The term "expands child care" means the increase in the number of child care seats in a child care program made available by a taxpayer, directly or through a third party, for employees of such taxpayer, provided that such increase requires a new or amended permit issued by the department of health and mental hygiene pursuant to article forty-seven of the health code on or after April first, two thousand twenty-two, and, provided, further, that the costs imposed on such employees for such child care program do not exceed forty percent of the child care rate.
7. Service year. The term "service year" means the twelve-month period commencing on October first and ending on September thirtieth in the subsequent calendar year.
b. Credit allowed. A taxpayer that creates child care or expands child care shall be allowed a credit against the tax imposed by chapter five, or by subchapter two or three-a of chapter six, of this title to be credited or refunded, without interest, in accordance with the provisions of subdivision (q) of section 11-503, subdivision twenty-three of section 11-604 and subdivision twenty-three of section 11-654 of this title. The amount of such credit shall be, for the portion of the service year in which the child care program was in operation, the sum of: (i) the product of the number of infant child care seats that have been created or expanded and twenty percent of the child care rate for such infant child care seats; and (ii) the product of the number of toddler child care seats that have been created or expanded and twenty percent of the child care rate for such toddler child care seats; provided that such infant and toddler child care seats are child care seats that are occupied. Notwithstanding the preceding sentence, a credit shall not be allowed for more than twenty-five child care seats that are occupied, and the amount of such credit may be reduced as a result of an allocation of available funds, as described in subdivision e of this section, for such credit.
c. Application process. A taxpayer must submit an application for such credit by November first of the calendar year in which the service year has ended.
1. Such application shall include but not be limited to:
(a) a permit issued by the department of health and mental hygiene to operate a child care center indicating the number of child care seats or, in the case of a child care center that has experienced an expansion of child care seats, a permit issued by such department demonstrating such expansion; and
(b) a certification from an independent certified public accountant that provides:
(1) the total number of child care seats that are child care seats that are occupied during such service year;
(2) of such total number of child care seats that are occupied, the number of infant child care seats that are occupied and the number of toddler child care seats that are occupied; and
(3) to the extent the taxpayer has expanded child care, the number of child care seats in existence before such expansion and the number of such child care seats that were occupied before such expansion.
2. No later than January thirty-first of the calendar year following the calendar year in which the application was submitted, the department of finance shall approve or deny such application and provide a calculation of the amount of such credit as determined by subdivision e of this section for any application that has been approved.
d. Application of credit to tax year. The credit, as approved and calculated by the department of finance pursuant to paragraph two of subdivision c of this section, shall be applied to the tax year in which the service year concludes, except that: (i) for a taxpayer whose tax year concludes on or after September thirtieth and before December thirty-first, the credit shall be applied to the tax year immediately following the tax year in which the service year concludes; and (ii) to provide the credit in a tax year consistent with this subdivision, the department of finance may establish procedures governing the application of such credit where the tax year of a taxpayer who has applied for such credit is less than twelve months, or where such tax year varies in accordance with subsection f of section four hundred forty-one of the internal revenue code.
e. Maximum amount of credit available. For each of the three tax years in which the credit authorized by this section is available, the aggregate amount of such credit shall be a maximum of twenty-five million dollars. To the extent that the department of finance has determined that the aggregate amount of such credit, as calculated pursuant to subdivision b of this section, would exceed twenty-five million dollars, such department shall reduce the amount of credit to be granted to each taxpayer who has applied for such credit in accordance with a process to be developed in rules promulgated by such department. In developing such process, the department may consider factors including, but not limited to, the date of application, the number of child care seats in a child care program that are occupied, and the extent to which the taxpayer bears the cost of the child care that is provided to the employees of such taxpayer.
(2022 N.Y. Laws Ch. 59, 4/9/2022, eff. 4/9/2022)
Editor's note: Part II, § 5 of 2022 N.Y. Laws Ch. 59 provides: "This act shall take effect immediately, provided that the credit authorized by section 11-144 of the administrative code of the city of New York, as added by section one of this act, shall be available to be applied to the tax year beginning between January 1, 2023 and December 31, 2023, inclusive of those dates, and to the two tax years immediately following such initial tax year."