Section 280-RICR-20-20-13.4 - Purchased DaycareA. Calculation and Documentation 1. The credit for purchased daycare is measured at 30% of the sums expended. Purchased daycare has a maximum credit of $30,000 per year and the yearly limit is calculated per individual taxpayer. Taxpayers purchasing daycare for or at one or more locations must obtain and retain appropriate documentation for each location (including the amount expended by the taxpayer, the name and address of the Rhode Island licensed daycare facility and, in the case of the owner of commercial property, the name of the commercial tenant and the names of the commercial tenants' employees for whose children the daycare is being purchased). Taxpayers claiming credits must also obtain written certification from the facility that it agrees to accept children whose child care services are paid in full or in part by the Rhode Island Department of Human Services. Taxpayers should aggregate the sums expended for the various locations and then perform the mathematics prior to determining the $30,000 limit. (Purchases of daycare for dependent adult family members on or after January 1, 1995 are subject to the same provisions above.) 2. EXAMPLE: Big Corporation has two major plants in Rhode Island and purchases daycare for its employees at two different Rhode Island licensed daycare facilities. Big Corporation pays $100,000 for daycare at facility A and $75,000 for daycare at facility B. Big Corporation's credit for purchased daycare is computed as follows: a. Daycare Purchased: Center A $100,000 Center B $ 75,000 Total $175,000
b. Credit = 30% x $175,000 but not more than $30,000 = $52,500 but subject to the $30,000 maximum credit If Big Corporation's tax was less than $30,000, Big Corporation would have amounts of excess credit. Such excess credit cannot be carried forward to future years.B. Direct Payment or Reimbursement1. Purchased daycare must be paid directly by the employer or by the commercial landlord to the Rhode Island licensed daycare facility. Reimbursements to employees for daycare from employers whose employee benefit packages contain such provisions do not qualify as sums expended for the purposes of purchased daycare provisions. Any monies reimbursed by the employee to the employer as part of the daycare purchased should be subtracted from the sums expended by the employer before calculation of the purchased daycare. With the extension of the credit to daycare for depending adult family members for payments made on or after January 1, 1995, the requirements above are likewise extended. The facility must be certified by the Department of Elderly Affairs. 280 R.I. Code R. § 280-RICR-20-20-13.4