The Washington State Department of Revenue published a special notice introducing a new business and occupation (B&O) tax exemption for child care businesses on 26 August 2024.
This new exemption goes into effect on 1 October 2024, and aims to support businesses that provide childcare services, specifically those generating over 50% of their revenue from these activities.
What is exempted from B&O tax?
Amounts received for providing care and supervision for less than 24 hours to children that are either:
- Under 13 years of age;
- Under 19 years of age with a verified special need or under court supervision as determined by the Department of Children, Youth, and Families under chapter 43.216 RCW.
How to claim the B&O tax exemption?
Businesses that qualify must report the amounts received under the Child Care B&O tax classification and then take a deduction under “Child Care for Children Under 13, Under 19 with Verified Special Need or Under Court Supervision.”
This exemption expires on 31 December 2034.
