The Employee Child Care Assistance Partnership
In 2022, the Kentucky General Assembly passed legislation to create the Employee Child Care Assistance Partnership (House Bill 499). Through this program, employers can partner with the state to provide financial assistance to employees struggling with the cost of quality child care. The program offers employers a powerful employee attraction and retention tool and an opportunity to double the size of an employee benefit with assistance from the state.
Here’s how it works:
An employer agrees to assist an employee with the cost of child care through direct cash assistance paid to the employee’s child care provider. The amount of assistance is up to the employer.
The child care provider must be a licensed provider participating in the Kentucky All STARS quality-rating program.
The employer submits a contract agreed to by the employer, the employee, and the provider to the Kentucky Cabinet for Health and Family Services.
If approved, the Cabinet will match the employer’s contribution up to 100 percent and will make payments on the employee’s behalf directly to the child care provider. For example, if the employer commits $100 per month to the employee’s child care expenses, the state may match that contribution up to another $100, giving the employee up to a total of $200 in child care assistance for the duration of the contract.
Participation for employers, employees, and child care providers is 100% voluntary, and contracts may be cancelled at any time.
Restrictions and specific eligibility requirements apply.
To fund this program, the Kentucky General Assembly appropriated $15 million that will be made available from July 1, 2023, to June 30, 2024.
The Cabinet will begin accepting applications from employers in early April 2023.
Key Steps Employers Can Take Now:
As the Cabinet prepares to roll out the Employee Child Care Assistance Partnership in the coming weeks, there are several key steps employers should be taking NOW:
Assess the child care needs of your workforce. To assist with this, the Kentucky Chamber has developed a series of recommended survey questions for employers to use.
Develop familiarity with the rules of the program and determine your company’s ability to comply with its administrative guidelines and eligibility requirements. The Chamber is working to develop additional resources to assist interested employers. The original legislation can be read here. The regulations for the program can be read here. Additional information is forthcoming.
Employers should begin building relationships with child care providers in their region. Use the Cabinet’s child care provider database to find providers in your area.
Additional information and links will be provided on this page as they become available.
House passes priority legislation to further reduce individual income tax
On January 5, 2023, the House passed House Bill 1, which would enact the second income tax reduction envisioned by House Bill 8. House Bill 8 puts Kentucky on a path to eliminating the individual income tax. The first reduction has taken place. Effective January 1, 2023 the individual income tax was reduced from 5 percent to 4.5 percent and House Bill 1 clarifies this. House Bill 1 will also reduce the individual income tax another 0.5 percent to take effect January 1, 2024.
House Bill 1 passed through the House Appropriations and Revenue Committee earlier in the day.
In the committee meeting, there was discussion of how this bill will impact state revenues specifically during a recession. Bill sponsor Rep. Brandon Reed, vice chair of the committee, indicated it would help Kentuckians during recession because it will ensure people keep more of their income to spend.
House Bill 8, passed in the 2022 session, empowers the General Assembly to reduce individual income tax by 0.5 percent when certain economic and fiscal triggers are met. Specifically, when the budget reserve trust fund is at a certain level and when revenues exceed expenditures by a specific amount.
Rep. Myron Dossett, who represents a district on the border with Tennessee, a state with no individual income tax and a much faster growing population than Kentucky stated, “Our goal is to grow this commonwealth. By growing the population, we grow our revenue base.”
House Bill 1 passed committee 16-4 before passing 79-19 on the House floor
The committee and full House also took up and passed a bill to provide additional funds for the Bowling Green veterans center to cover cost overruns due to inflation.