08/13/2026
New tax rules may significantly reduce the cost of providing child care to your employees. Starting in 2026, the employer-provided child care credit generally equals 40% of qualified facility expenses (up from 25%), plus 10% of qualified resource and referral costs, up to $500,000 (up from $150,000). Small businesses may qualify for a 50% rate on qualified facility expenses and a $600,000 limit. The credit may apply to operating your own facility, contracting with a qualified provider or participating in a jointly operated arrangement. But eligibility, additional limits and recapture rules require careful review. Contact us at (812) 474-1015 for help evaluating your options and projecting the credit’s value.