By: Mary Steurer (ND Monitor)
With the goal of supporting working families, state lawmakers this session passed a new tax credit that subsidizes child care for North Dakota businesses.
Senate Bill 2282 applies specifically to child care stipends. The tax credit allows employers that offer this benefit to write off 50% of their child care contributions off their income taxes. Businesses can claim up to $1,000 in child care subsidies per employee toward this total.
Andrea Pfennig, vice president of government affairs for the Greater North Dakota Chamber, called the tax credit a “step in the right direction.”
In written testimony submitted in favor of the bill, Pfennig said in a 2024 survey of chamber members nearly 70% of respondents saw child care as an issue.
Some feel the tax credit doesn’t do enough. North Dakota Human Rights Coalition Executive Director Dalton Erickson said it will leave out many North Dakota families.
“A modest tax credit was passed, but it only applies to businesses that offer child care stipends, a luxury workplace benefit that the majority of workers don’t receive,” Erickson said at a Thursday morning event outside the Capitol.
Gov. Kelly Armstrong signed the bill into law May 1. Businesses can start using the credit for their 2025 taxes.
Pfennig called the new tax credit an improvement over a previous child care program passed by the Legislature in 2023.
Under that program, businesses can apply for a state match for either $300 a month or $150 a month for child care subsidies.
Some businesses found the matching program bureaucratically complex as well as limited in scope, Pfennig said. It is also only available for kids ages 5 and under, and has income limits, according to the program’s website.
Pfennig said she’s glad that both programs are still an option for businesses so that they can choose what’s best for them.
The Legislature this session also passed House Bill 1119, which directs the Department of Health and Human Services to form a child care services advisory committee to study child care licensing.
The bill also invites Legislative Council to conduct a program evaluation of the Department of the Health and Human Services’ child care services.
