Section 1. It is the goal of the Commonwealth to promote economic development through workforce improvements and retention, ultimately leading to a strong and sustainable economy that supports all citizens of Massachusetts. The early childhood education field employs an estimated 60,000 workers and contributes $1.5 billion to the state economy annually. Support of this sector will benefit all.
Section 2. (a) Section 6 of Chapter 62 of the Massachusetts General Laws is hereby amended to include an earned income tax credit for eligible child care workers, hereby referred to as “early educators.” The early educator earned income tax credit will be based on the existing tax code governing the earned income tax credit, reducing potential implementation and administrative costs. An early educator earned income tax credit shall equal 30 percent of the federal earned income tax credit received by the taxpayer for the taxable year. If the amount of the credit allowed exceeds the early educator’s liability, the commissioner shall treat such excess as an overpayment and shall pay the early educator the amount of the excess, without interest.
(b) “Eligible early educator” shall mean any person who meets each of the following requirements: (1) the person has been approved by the Department of Early Education and Care for the regular care and education of children unrelated to the educator in a location outside the children’s own home for all or part of the day, regardless of the early educator’s level of certification; (2) the person has been employed continuously for six months of the tax year for an average of twenty hours or more per week in an eligible child care program; and (3) the person qualifies for the existing federal earned income tax credit. The Department of Early Education and Care shall consult its records to verify the eligibility of early educators. This information will be shared with the Department of Revenue with the goal of reducing potential administrative costs to the state created by an early educator earned income tax credit.
(c) An early educator earned income tax credit will provide an average, estimated credit of $570 to eligible early educators annually, while costing the state an estimated $7.5 million annually.
Section 3. An early educator’s earned income tax credit will be reviewed five years after the tax code is amended for its inclusion. This review will assess the tax credit on the following merits: (1) its use by early educators; (2) its effectiveness in promoting job retention in the early education field; and (3) the continued need of the earned income tax credit. If it is found that there is a significant decrease in the need for an early educator earned income tax credit, the bill will be subject to sunset.
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