{"id":10751,"date":"2024-05-15T11:58:10","date_gmt":"2024-05-15T18:58:10","guid":{"rendered":"https:\/\/www.irs.com\/?p=10751"},"modified":"2024-05-15T12:08:54","modified_gmt":"2024-05-15T19:08:54","slug":"credit-for-employer-provided-childcare-facilities","status":"publish","type":"post","link":"https:\/\/www.irs.com\/en\/credit-for-employer-provided-childcare-facilities","title":{"rendered":"The Credit for Employer-Provided Childcare Facilities"},"content":{"rendered":"<h2>Providing Childcare For Your Employees? You may qualify for a huge credit<\/h2>\n<p>The Credit for Employer-Provided Childcare Facilities is <a href=\"https:\/\/www.irs.com\/en\/topics\/tax-credits\/\">tax credit<\/a> that encourages employers to provide childcare to their employees. An employer can get a tax credit up to $150,000 per year to offset 25% of qualified childcare facility expenses and 10% of qualified childcare resource and referral expenses.<\/p>\n<p>This general business credit is for companies that provide childcare services to their employees. This covers childcare facilities, childcare resources, and referrals.<\/p>\n<p><iframe loading=\"lazy\" title=\"Tax Credit for Employer-Provided Child Care Facilities &amp; Services\" src=\"https:\/\/www.youtube.com\/embed\/gwJItXuc3rY\" width=\"820\" height=\"600\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe><\/p>\n<p>For more detailed information, refer to Employer-provided childcare credit at IRS.gov, but here is the summary of eligibility requirements in order to claim this big credit.<\/p>\n<h3>Eligibility<\/h3>\n<p>A company can claim the credit if it pays or incurs qualified childcare expenses for its employees during the tax year.<\/p>\n<p>Expenditures on childcare are qualified if:<\/p>\n<ol>\n<li>Amounts paid to acquire, build, renovate, or expand a qualified childcare facility for the taxpayer.<\/li>\n<li>Tax-deductible childcare facility expenses include amounts paid for training and scholarships for employees with higher levels of childcare training, as well as increased compensation for these employees.<\/li>\n<li>Employee childcare services provided by a qualified childcare facility under a contract with the taxpayer.<\/li>\n<\/ol>\n<h3>Qualified Facility<\/h3>\n<p>In order to be qualified, a childcare facility needs to meet all the state and local laws and regulations. The facility needs to be licensed as a childcare center.<\/p>\n<p>There are also these requirements:<\/p>\n<ul>\n<li>Unless the facility is also the principal residence of the person operating the facility, the main use of the facility must be childcare assistance.<\/li>\n<li>Employees of the taxpayer must be able to enroll in the facility.<\/li>\n<li>At least 30% of the facility&#8217;s enrollees have to be dependents of the taxpayer&#8217;s employees if it&#8217;s their principal trade or business.<\/li>\n<li>You can&#8217;t discriminate against highly compensated employees in using the facility<\/li>\n<\/ul>\n<h2>Qualified Expenditures<\/h2>\n<p>Spending on childcare facilities qualifies as qualified expenditures if you pay or incur the following:<\/p>\n<ul>\n<li>Buying, building, renovating or expanding property that:\n<ul>\n<li>Qualified childcare facilities for taxpayers<\/li>\n<li>Property that can be depreciated (or amortized)<\/li>\n<li>Doesn&#8217;t count as the taxpayer&#8217;s principal residence or any employee&#8217;s principal residence<\/li>\n<\/ul>\n<\/li>\n<li>Provide childcare to taxpayers. Employees with higher levels of childcare training get paid more, training is available, and scholarships are available.<\/li>\n<\/ul>\n<p>Expenses over fair market value are not included in qualified childcare facility expenditures.<\/p>\n<h3>Qualified resource and referral expenditures<\/h3>\n<p>These are the costs you&#8217;re paying or incurred under a childcare resource and referral contract.<\/p>\n<p><strong>Note that you can&#8217;t get double benefits<\/strong>, these items must be reduced by the credit amount<\/p>\n<h2>How to claim the credit<\/h2>\n<p>You can claim the credit on <a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f8882.pdf\" target=\"_blank\" rel=\"noopener\">Form 8882<\/a>, Credit for Employer-Provided Childcare Facilities.<\/p>\n<p>You can&#8217;t claim more than $150,000 in credit. Expenses that exceed the credit amount can be deducted.<\/p>\n<h2>Sources<\/h2>\n<p>&#8220;<a href=\"https:\/\/www.youtube.com\/watch?v=gwJItXuc3rY\" target=\"_blank\" rel=\"noopener nofollow\">Tax Credit for Employer-Provided Child Care Facilities &amp; Services<\/a>&#8221; &#8211; <a href=\"https:\/\/www.youtube.com\/@civitasstrategiesearlystar2359\" target=\"_blank\" rel=\"noopener nofollow\">Civitas Strategies<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Providing Childcare For Your Employees? You may qualify for a huge credit The Credit for Employer-Provided Childcare Facilities is tax credit that encourages employers to provide childcare to their employees. An employer can get a tax credit up to $150,000 per year to offset 25% of qualified childcare facility expenses and 10% of qualified childcare [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":10757,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[161,34],"tags":[],"class_list":["post-10751","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-tax","category-tax-credits"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/10751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/comments?post=10751"}],"version-history":[{"count":5,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/10751\/revisions"}],"predecessor-version":[{"id":10758,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/10751\/revisions\/10758"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media\/10757"}],"wp:attachment":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media?parent=10751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/categories?post=10751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/tags?post=10751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}