Federal Tax Benefits
Federal Tax Benefits to Support Employee Child Care
On Site Child Care
Contracting for Child Care
Help Families Find Child Care
Businesses can receive a federal tax credit equal to 25% of expenses for employee child care. The maximum credit allowed per year is capped at $150,000. Note: Legislation enacted in July 2025 increases the credit to 40% of expenses and the cap is $500,000 beginning in 2026. (Small businesses will be allowed 50% of expenses and the cap increases to $600,000 annually).
Businesses can contract with a child care program to provide child care for their employees or help make it more affordable. Similar to on-site child care, businesses can receive a tax credit of up to 25% of expenses, with an annual cap set at $150,000. Note: Legislation enacted in July 2025 increases the credit to 40% of expenses and the cap is $500,000 beginning in 2026. (Small businesses will be allowed 50% of expenses and the cap increases to $600,000 annually).
Businesses can receive a 10% tax credit for contracting with Child Care Resource and Referral agencies. In Idaho, contact your IdahoSTARS regional Child Care Resource Center to help families find child care that works within their budget.
Child Care Search Help
IdahoSTARS provides a fully coordinated statewide Child Care Resource Center (CCRC) network, with 7 regional offices, to help parents and to support child care providers. Parents can speak to a child care specialist directly and receive a list of child care providers meeting family priorities for care. Let parents know to call 2-1-1 to get in touch with a local Resource Specialist who can help.