AB 1118

This bill converts the additional child and dependent care credit into a refundable tax credit. Under the bill, beginning with the 2026 tax year, if the additional child and dependent care credit exceeds a claimant’s tax liability, the claimant will receive the difference as a refund. Currently, the additional child and dependent care credit provides a nonrefundable state income tax credit equal to the amount that the claimant could claim for the federal child and dependent care credit when using higher employment-related expense limitations authorized under current law.