Revenue

Child care, affordable housing tax credit changes advance

A bill intended to create additional investment in affordable housing and child care programs in Nebraska received first-round approval from lawmakers Jan. 30.

Sen. Eliot Bostar
Sen. Eliot Bostar

Under a measure passed by the Legislature in 2023, individuals, businesses and other entities subject to state income tax may apply for a nonrefundable credit of up to $100,000 for contributions they make to eligible child care programs.

Lincoln Sen. Eliot Bostar, sponsor of LB182, said his proposal would lead to more private contributions by allowing insurance companies and financial institutions — which are subject to premium and related retaliatory taxes and franchise taxes, respectively — to qualify for the credit.

The bill also would make certain nonprofit corporations eligible for Nebraska affordable housing tax credits and allow a taxpayer to transfer, sell or assign the credits to another taxpayer.

Bostar said the changes would make affordable housing tax credits easier to use for smaller and midsized investors, increasing their value and driving investment without additional cost to the state.

The Nebraska Investment Finance Authority, which distributes the credits, estimates that the changes will create an additional $8 million to $10 million in affordable housing investment each year, he said.

Sen. Mike Moser of Columbus supported the bill. Making affordable housing tax credits easier to sell would make them more valuable to investors and institutions that use them to offset their tax liability, he said. Affordable housing developers then could sell the credits for a higher price and put more money into their projects, making the program more effective, Moser said.

LB182 advanced to select file on a vote of 37-0.

Bookmark and Share
Share