(1) As used in this section: (a) "Eligible small business" means the same as that term is defined in Section 45F, Internal Revenue Code. (b) "Off-site qualified child care facility" means a qualified child care facility that an employer does not own, control, operate, or manage. (c) "On-site qualified child care facility" means a qualified child care facility that an employer owns, controls, operates, or manages, for the benefit of the employer's employees. (d) (i) "Qualified child care expenditure" means an amount an employer pays or incurs for: (A) the operating costs of an on-site qualified child care facility, whether the employer operates the on-site qualified child care facility or contracts with a third party provider to provide child care services at the on-site qualified child care facility; (B) entering into a contract with an off-site qualified child care facility to provide child care services for the employer's employees; or (C) entering into a contract with an intermediate entity that contracts with one or more off-site qualified child care facilities to provide child care services for the employer's employees. (ii) For an employer that operates an on-site qualified child care facility, "qualified child care expenditure" includes costs related to training employees and providing increased compensation to employees with higher levels of child care training. (e) "Qualified child care facility" means center based child care as that term is defined in Section 26B-2-401 that is located in the state. (f) "Qualified construction expenditure" means an amount an employer pays or incurs to acquire, construct, rehabilitate, or expand property: (i) for an on-site qualified child care facility; and (ii) with respect to which the employer is allowed a deduction for depreciation, or amortization in lieu of depreciation. (g) "Qualifying taxpayer" means a taxpayer that: (i) is an employer; (ii) qualifies for and claims the federal employer-provided child care tax credit described in Section 45F, Internal Revenue Code, for the current taxable year; and (iii) does not obtain payment from an employee or deduct from an employee's salary or wages for child care services, with respect to any qualified child care facility for which the taxpayer claims a tax credit under this section. (h) "Recapture event" means an employer fails to operate an on-site qualified child care facility for which the employer claims a tax credit under Subsection (2) as a child care facility for at least five consecutive taxable years after the taxable year on which the employer first claims a tax credit under Subsection (2). (i) "Third party provider" means: (i) a new child care provider; or (ii) an existing child care provider that can perform the contract without reducing the provider's existing child care services. (2) (a) A qualifying taxpayer may claim a nonrefundable tax credit equal to 20% of the qualified construction expenditures the qualifying taxpayer incurred during the taxable year. (b) A qualifying taxpayer may carry forward, to the next five taxable years, the amount of the qualifying taxpayer's tax credit described in this Subsection (2) that exceeds the qualifying taxpayer's income tax liability for the taxable year. (3) (a) A qualifying taxpayer may claim a nonrefundable tax credit equal to: (i) 30% of the qualified child care expenditures the qualifying taxpayer incurred during the taxable year, for a qualifying taxpayer that qualifies as an eligible small business for the taxable year; or (ii) 10% of the qualified child care expenditures the qualifying taxpayer incurred during the taxable year, for a qualifying taxpayer that does not qualify as an eligible small business for the taxable year. (b) A qualifying taxpayer may not carry forward or carry back the tax credit described in this Subsection (3) that exceeds the qualifying taxpayer's income tax liability for the taxable year. (4) (a) (i) If a recapture event happens within two taxable years after the first taxable year in which the qualifying taxpayer claims a tax credit under this section, a qualifying taxpayer shall repay 100% of the tax credit a qualifying taxpayer receives under this section for any taxable year. (ii) If a recapture event happens more than two taxable years but fewer than three taxable years after the first taxable year in which the qualifying taxpayer claims a tax credit under this section, a qualifying taxpayer shall repay 75% of the tax credit a qualifying taxpayer receives under this section for any taxable year. (iii) If a recapture event happens more than three taxable years but fewer than four taxable years after the first taxable year in which the qualifying taxpayer claims a tax credit under this section, a qualifying taxpayer shall repay 50% of the tax credit a qualifying taxpayer receives under this section for any taxable year. (iv) If a recapture event happens more than four taxable years but fewer than five taxable years after the first taxable year in which the qualifying taxpayer claims a tax credit under this section, a qualifying taxpayer shall repay 25% of the tax credit a qualifying taxpayer receives under this section for any taxable year. (b) A qualifying taxpayer shall make a payment for a recapture event for the taxable year in which the recapture event occurs.
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