Game Plan: Leveraging Federal Tax Incentives for Business Childcare Solutions

Empower your workforce with the enhanced Employer-Provided Child Care Credit (I.R.C. § 45F). Our Game Plan explains how employers, small-business consortia, chambers, and intermediaries can use new federal incentives to deliver child care solutions that attract talent, reduce turnover, and boost productivity—without becoming child care operators.

Why This Matters Now

• In 2026, the 45F credit expands significantly, making employer-supported child care more accessible and financially attractive.
• Small businesses can pool resources, and intermediary services are now an allowable expense—simplifying participation and execution.
• Employers can deliver outsized impact on recruitment, retention, and satisfaction for working parents.

At a Glance: The Expanded 45F

• Effective Jan 1, 2026
• Credit rates/caps: 40% up to $500k (general); 50% up to $600k (eligible small businesses; gross receipts < ~$31M)
• Qualified expenses: facilities, contracted slots, resource & referral (10%), intermediary/third‑party operator fees
• Small businesses can pool resources
• Claim via IRS Form 8882 (keep contracts, invoices, licensing)

What’s Inside

• Overview of expiring vs. expanded §45F + key FAQs
• The Big 3 Enhancements: higher caps/rates; small‑business pooling; intermediary eligibility
• Scenarios: large employer; small‑business consortium
• Action steps: organize, engage, connect, develop/monitor
• State credit snapshot (map + examples)

Who Should Read This

• CEOs, CFOs, CHROs, HR leaders
• Small/mid-sized businesses exploring pooled models
• Chambers and employer associations
• Licensed child care providers and intermediaries

Potential Business Impact

• Improved attraction, retention, and productivity among working parents
• Lower absenteeism and turnover
• Turnkey pathways via intermediaries and pooled purchasing
• Clear documentation roadmap to claim credits

Compliance Note: Consult your tax advisor before committing funds to ensure eligibility, documentation, and alignment with forthcoming IRS guidance. The IRS is expected to release additional guidance on the enhanced credit.

Download the guide to learn more about how to leverage federal tax incentives for childcare solutions.