45F Child Care Tax Credit: Up to $500,000–$600,000 for Employer Child Care Costs

The federal 45F employer-provided child care tax credit can help businesses recover part of the cost of providing or supporting child care for employees. Recent guidance says the expanded credit can be worth up to $500,000 for most employers and up to $600,000 for eligible small businesses.

What the Funding Covers

• Costs tied to qualified child care facilities used by employees
• Qualified expenses for operating, contracting for, or supporting employer-provided child care
• Eligible child care resource and referral services that help employees find care

Who Can Apply

This is a business tax credit for employers, not a grant paid directly to employees. Employers may qualify when they spend money on eligible child care facilities or services for their workforce. The IRS notes that the services must be available to employees generally and cannot favor highly compensated employees.

How to Claim the Credit

• Credit amount: Up to $500,000 for many employers, and up to $600,000 for eligible small businesses under the expanded 2026 guidance summarized by the Bipartisan Policy Center.
• Claim method: File IRS Form 8882, Credit for Employer-Provided Childcare Facilities and Services, with the business tax return.
• Window: Claim during the applicable business tax filing cycle for the tax year when eligible expenses were paid or incurred.
• Apply: Review the IRS instructions and claim the credit through IRS employer-provided child care credit guidance.

Why It Matters

Child care access is a real workforce issue for many employers. For businesses already helping employees with child care, this credit may reduce after-tax costs and make those benefits easier to sustain.

Source: Bipartisan Policy Center 45F FAQ; Internal Revenue Service