Employer-Provided Childcare Credit Calculator
The Employer-Provided Childcare Credit, claimed through Form 8882, is a tax incentive that helps employers cover the cost of childcare facilities and referral services for their employees.
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About Form 8882: Credit for Employer-Provided Childcare
Benefits of the Credit
• 25% credit for qualified childcare facility expenditures
• 10% credit for qualified childcare resource and referral expenditures
• Credit is limited to $150,000 per tax year
• Part of the general business credit
• Can be claimed up to 3 years from the due date of your return
Qualified Childcare Facility Expenditures
• Acquiring, constructing, rehabilitating, or expanding property to be used as part of a qualified childcare facility
• Operating expenses of a qualified childcare facility
• Training employees, scholarship programs, and providing increased compensation to employees with higher levels of childcare training
• Contracts with qualified childcare facilities to provide childcare services to employees
Qualified Childcare Resource and Referral Expenditures
These are amounts paid or incurred under a contract to provide childcare resource and referral services to employees of the taxpayer. They qualify whether provided in-house or outsourced.
Examples include:
• Subscriptions to childcare search platforms for employees
• Contracting with a service to help employees locate appropriate childcare
• Staff time dedicated to helping employees navigate childcare options
• Creating and maintaining a database of local childcare providers
• Educational materials about selecting quality childcare
• Costs for hosting childcare information sessions for employees
Important Notes
- A qualified childcare facility must meet all requirements of applicable state and local laws and regulations, including licensing requirements.
- The principal use of the facility must be to provide childcare (unless it's also the personal residence of the operator).
- Enrollment must be open to employees of the taxpayer during the tax year.
- If a child care business seeks to claim this tax credit to its own employees, at least 30% of enrolled children must be employees dependents.
- The use of the facility must not discriminate in favor of highly compensated employees.
Additional Resources
This application is for informational purposes only and does not constitute tax, legal, or accounting advice.
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