Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 20 - TAX CREDITS/DEDUCTIONS
Part 13 - Daycare Assistance and Development Tax Credit (280-RICR-20-20-13)
Section 280-RICR-20-20-13.5 - Establishment/Operation of daycare facility

1. The credit for establishing and/or operating a Rhode Island licensed daycare facility is measured at 30% of the sums expended to a maximum of $30,000. The taxpayer may establish and/or operate the daycare facility alone or with other taxpayers; but the daycare facility must be used primarily by the taxpayer's employees' children or the children of the employees of the commercial tenants during the employees' hours of employment.

2. Effective January 1, 1995, the above provisions have been extended to include daycare facilities for depending adult family members.

1. Calculation of the sums expended for the establishment and/or operation of each licensed daycare facility must be made separately from calculation of other daycare items available under R.I. Gen. Laws 44-47.

2. For example: Life Insurance Company established its own licensed daycare facility and paid $20,000 for equipment and $30,000 for staff; Life owes gross premiums tax under R.I. Gen. Laws 44-17 of $20,000.

1. Any monies paid by the employee to the employer as part of the child daycare program offered to employees at a facility established and/or operated and for which a credit is being claimed under R.I. Gen. Laws Chapter 44-47 should be subtracted from the "sums expended" by the employer before calculation of the credit. Similarly, these provisions have been extended to daycare for dependent adult family members effective January 1, 1995.

1. The credit claimed for a child daycare facility established and/or operated should be made in the year in which the facility is first placed in service. Property is considered first placed in service by the taxpayer in the tax year in which under the taxpayer's depreciation practice, the period for depreciation for the property begins or the year in which the property is placed in a condition or state of readiness and availability for a specifically assigned function, whichever is earlier. In the event that the facility is considered to be first placed in service in a year prior to the issuance of its Rhode Island Daycare License, the facility will be considered to be first placed in service in the year concurrent with the license.

2. Effective January 1, 1995, the credit has been extended to include facilities certified by the Rhode Island Department of Elderly Affairs for the care of dependent adult family members.