Child Care Affordability
Supporting Affordable Child Care for Employees
Employers can help make child care more affordable for families
- Federal Tax Relief:
- Offering on-site child care. Businesses can receive a federal tax credit equal to 25 percent of expenses for employee child care. The maximum credit allowed per year is capped at $150,000.
- Contracting for child care within the community. Businesses can contract with a licensed child care program (a center or a family child care home) to provide child care for their employees. Like on-site child care, the federal credit is limited to 25 percent of expenses and capped at $150,000.
- Helping families find child care. Businesses can receive a 10 percent federal tax credit for contracting with Child Care Resource and Referral Agencies. Contact your county Early Learning Coalition to be connected with child care resource and referral services to help support families to find child care within their budget.
- Offering Employees Tax-Free Payments for Child Care. Employers can set up Dependent Care Assistance Plans, which are flexible spending accounts, that enable employees to set aside up to $5,000 per year in pre-tax salary for child care expenses.
- Tell Your Employees about the Child and Dependent Care Tax Credit (CDCTC). When you send your employees their W-2 at tax time, remind them that if they have children for whom they pay for child care services, that they should claim the CDCTC. Let them know more information is available about the tax credit for parents on the IRS child care web page.
- Responsive caregiving
- Emotional and behavioral support
- Support for learning and classroom organization, and
- Instructional support
- Employer Tax Incentives for Child Care Summary
- Employee Tax Incentives for Child Care Summary
- Quality Checklist for Evaluating Child Care Programs
- Early Learning Coalition Locator
- School Readiness Program (child care subsidy for low income parents)
- The Business Case for Early Education Investments (One Pager)