The First Five Things to Know About: Employer-Provided Child Care Credit (45F)

45F is designed to encourage employer participation in child care solutions. Through the credit, businesses can be reimbursed for part of the cost when they build, operate, or contract for child care to support their workforce.

Employers have multiple pathways to use 45F. Companies may operate an on-site child care program or partner with a licensed provider to offer child care slots or expanded capacity for employees’ children. These partnerships can help stabilize providers by offering predictable enrollment and revenue.

The credit amount is substantial, and larger for small businesses. Large businesses can apply up to $500,000 of qualified child care expenses toward the credit, while small businesses can apply up to $600,000 (up from $150,000 in previous years). Small businesses also have the option to pool resources to jointly fund child care options.

45F supports both child care supply and workforce participation. By helping employers invest in child care options, the credit can increase the number of available child care slots and help parents remain in the workforce, benefiting families, employers, and local economies.

45F is part of a broader strategy to strengthen child care nationwide. When paired with strong federal programs and other family-focused tax provisions, 45F plays a key role in expanding access, reducing costs, and supporting the child care providers who form the backbone of communities.