On-Site Day Care Tax Credit Act of 1986

On-Site Day Care Tax Credit Act of 1986 - Amends the Internal Revenue Code to allow an income tax credit to employers for the expenses of establishing and operating an on-site dependent care facility. Sets the amount of such credit at: (1) 18 percent of the qualified first year dependent care expenses; (2) ten percent of the qualified second year dependent care expenses; and (3) ten percent of the qualified third or fourth year dependent care expenses. Allows an increased credit where cost reductions are provided to employees with low or moderate incomes.

Defines "qualified dependent care expenses" as expenses paid or incurred during the first and second year of operation and wages paid to individuals performing dependent care services during the third or fourth year of operation of such a facility.

Limits such credit to taxable years beginning after December 31, 1986, and before January 1997.