Bill > LC1234

This bill establishes the Montana Child Care Savings Account Act, which creates a new tax-advantaged savings account for child care expenses. Individuals and employers can establish these accounts, with annual contribution limits of $5,000 (adjusted annually for inflation), and contributors can exclude the contributions and account earnings from Montana state income tax as long as the funds are used for eligible child care expenses. The accounts can be administered by various entities like banks, CPAs, attorneys, and financial institutions, with specific rules governing their operation. Withdrawals for non-child care purposes are permitted only on the last business day of the account administrator's business year and are subject to ordinary income tax plus a 10% penalty. The bill includes detailed provisions for account management, including requirements for documenting eligible expenses, reporting account balances, and transferring accounts between family members. It also establishes penalties for submitting false claims, with fines and potential imprisonment depending on the amount of the false claim. The tax provisions will apply to income tax years beginning after December 31, 2025, and the accounts are intended to help working parents manage child care costs by providing a tax-efficient way to save and pay for these expenses.

https://bills.legmt.gov/#/lc/bill/2/LC1234