Yes, there are several tax credits and government funds available to employers who support their employees with child care. These can be found at both the federal and state levels.
The primary federal tax credit available is the Employer-Provided Child Care Credit (Internal Revenue Code Section 45F). This credit allows employers to claim:
- Up to 25% of qualified child care expenditures
- Up to 10% of qualified child care resource and referral expenditures
The total credit is capped at $150,000 per taxable year.
For more information and insight into additional federal tax credits, check out the
U.S. Chamber of Commerce’s Employer Guide to Child Care Assistance & Tax Credits
Qualified expenditures include:
- Costs to build, renovate, or expand a child care facility
- Operating costs of a child care facility
- Contracting with a licensed child care program to provide child care services to employees
Many states offer additional tax credits or incentives for employers who provide child care support. These vary widely by state and can include:
- Tax credits for child care facilities
- Grants for starting or improving child care programs
- Subsidies for employee child care expenses
We recommend consulting a tax professional with these incentives and researching the specific offerings in your state, as they can significantly enhance the benefits available at the federal level.
Additionally, you can check with your state's Department of Revenue or Economic Development office for state-specific programs and consider exploring partnerships with local child care resource and referral agencies for additional guidance.