Unlock Up to $600,000 in Childcare Tax Credits

The §45F credit is a federal tax incentive designed to encourage employers to provide childcare benefits to their employees. Under the 2026 OBBBA guidelines, businesses can receive 40-50% of qualified childcare expenses, with annual caps up to $600,000.

The One Big Beautiful Bill Act (OBBBA) significantly enhanced the credit: rates increased from 25% to 40-50%, annual caps rose from $150,000 to $500,000-$600,000, and coverage now includes third-party contracted providers.

A business qualifies as 'small' if its average gross receipts for the preceding three tax years do not exceed $31 million. Small businesses receive the higher 50% credit rate and $600,000 annual cap.

For most businesses: Qualified expenses are employer-paid childcare tuition paid to a licensed third-party provider for employees' children. This includes paying a licensed center to reserve slots, or paying part of employees' tuition under contract.

Additional qualified expenses: Building/improving childcare facilities, operating costs of in-house facilities, and referral services to help employees find childcare.

Note: Unlicensed or non-compliant facilities do not qualify.

We provide comprehensive support including eligibility assessment, credit calculation, documentation guidance, and filing assistance. Our team stays current with all IRS regulations and the latest OBBBA guidelines to maximize your credit.

The credit is claimed on your annual business tax return. For 2026 tax year benefits, you'll claim them when filing your 2026 return in 2027. However, planning ahead ensures you can maximize qualifying expenses.

If your primary business is childcare, there's a special rule called the 30% test: at least 30% of the children enrolled must be dependents of your employees. However, if you own a separate non-childcare business, that business may still qualify for the credit.

If you own a childcare center and another business that is not childcare, your non-childcare business may qualify for the §45F credit—even if the childcare is provided at your own center. The 30% rule only applies when childcare is the taxpayer's primary business.

Generally, no. The §45F credit is designed for tax-paying entities. Nonprofits and government-funded organizations typically don't have federal tax liability to offset, so they cannot utilize this credit.

Yes! Multiple employers can share a childcare facility. Each employer claims credits based on their individual qualified expenses. This makes on-site or near-site childcare more feasible for smaller businesses.