Hey ,
Do you still remember me telling you about the Employer-Provided Childcare Tax Credit? Well, some businesses have not taken advantage of this, and it’s money and an opportunity to motivate staff going to waste!
About the Tax Credit
This tax credit is designed to help employers like you cover some of the costs associated with providing childcare services to your employees. The credit is worth up to $150,000 per year, offsetting 10% of qualified childcare resource and referral costs and 25% of qualified childcare facility costs.
Who is Eligible
To be eligible for the credit, you must have paid or incurred qualified childcare costs during the tax year to provide childcare services to your employees. Qualified childcare costs include:
- Costs associated with acquiring, constructing, rehabilitating, or expanding property used as a qualified childcare facility.
- Operating expenses, including amounts paid to support childcare workers through training, scholarship programs, and providing increased compensation to employees with
higher levels of childcare training.
- Qualified resource and referral costs, which include amounts paid or incurred under a contract with a qualified childcare facility to provide childcare services to your employees.
How to Claim the Credit
To claim the credit, employers should complete Form 8882, Credit for Employer-Provided Childcare Facilities and Services. The credit is part of the general business credit subject to the carryback and carryforward rule, allowing you to carry back unused credit one year and carry it forward for 20 years after the year of the credit. Taxpayers whose only source for the credit is from pass-through entities can report the credit directly
on Form 3800, General Business Credit.
If you have any questions or need assistance with this process, please feel free to reach out to
me.
Thanks,
Your favorite accountant and tax professional,
Folasade,
(202) 618-1295
[email protected]
