SECTION 1: Chapter 62 of the General Laws is hereby amended by inserting after section 6N, the following section:- 

Section 6O. (a) For a taxable year, a taxpayer with a child under the age of 5 shall be allowed to receive a refundable credit against the taxes imposed under this chapter in the amount of the cost of the eligible child care expenses up to:- (i) $2,000 for each child who has not attained the age of 3 by the end of the taxable year; or (ii) $1,500 for each child who has attained the age of 3 by the end of the taxable year.

(b) Credits under this section shall not be applicable to taxpayers with adjusted gross incomes exceeding an amount equal to 400 per cent of the federal poverty level in a taxable year.

(c) For the purposes of this section, eligible child care expenses shall be expenses paid for care that a child receives in a facility that meets licensing requirements as determined by the department of early education and care.

(d) The department of revenue shall promulgate regulations to implement this section.