Tia Sauls
Tia Sauls is an early education specialist who helps families and educators navigate the child care, early education, and K–12 landscapes.
Child care is a common challenge for working families across the United States, impacting both employees and employers. When employees don’t have access to reliable care, it can lead to increased absenteeism and make it harder for businesses to retain their workforce.
One way employers can address this challenge is through the Employer Provided Child Care Credit (Section 45F), a federal tax incentive designed to support investment in child care solutions. This credit encourages businesses to partner with local providers and helps offset the cost of offering child care benefits, making it more feasible to support working families.
Jump To:
What Is the Employer Provided Child Care Credit (45F)?
Key Details About the 45F Credit
What Expenses Qualify for the Credit?
Recent Updates to the 45F Credit
Why This Matters for Childcare Providers
Why This Credit Is a Win for Child Care Providers
How Winnie Helps Connect Providers and Employers
What Is the Employer Provided Child Care Credit (45F)?
The Employer Provided Child Care Credit (45F) is a federal tax incentive that allows businesses to claim a percentage of qualified child care expenses. The goal of the credit is to encourage employers to help their employees find and pay for child care, often by working with local childcare providers.
Key Details About the 45F Credit
The 45F credit includes several important provisions that employers should understand:
|
Category |
Details |
|
Maximum Credit |
Up to $150,000 per year |
|
Qualified Expenses (25%) |
Costs for constructing, acquiring, or operating a child care facility, including staffing and training |
|
Referral Expenses (10%) |
Costs for services that help employees find child care |
|
Eligibility Requirements |
Facilities must be licensed and available to employees broadly |
|
Carryforward/Carryback |
Unused credits can be carried back 1 year and forward up to 20 years |
|
How to Claim |
File IRS Form 8882 |
What Expenses Qualify for the Credit?
Employers can use the credit for different types of child care costs. This includes:
- On-Site or Near-Site Child Care: Employers may build or support child care centers near the workplace, often run by experienced providers.
- Partnerships with Local Providers: Businesses can reserve spots at local daycare or preschool programs for their employees’ children.
- Child Care Subsidies: Employers may give employees money (stipends) to help pay for child care at approved providers.
- Child Care Navigation Tools: Employers can offer tools that help employees find licensed providers and available child care, including websites like Winnie.
Recent Updates to the 45F Credit
The Employer Provided Child Care Credit (45F) was updated in 2025 to make it more useful for employers. These updates increased how much employers can claim and expanded the types of child care expenses that qualify. This makes it easier and more worthwhile for businesses to invest in child care support.
In simple terms, the updates mean employers can get more money back when they help pay for child care. This encourages more companies to partner with childcare providers or offer benefits that help employees find care.
Why This Matters for Childcare Providers
The Employer Provided Child Care Credit (Section 45F) matters because it helps make child care support financially feasible for employers while directly addressing a major barrier for working families. By offsetting the cost of child care investments, it lowers the risk for businesses to offer meaningful benefits like provider partnerships or on-site care.
For employers, this can lead to stronger retention, reduced absenteeism, and a more stable workforce. For employees, it provides access to reliable care, reducing stress and allowing them to be more present and productive at work. Ultimately, the credit creates a win-win by aligning business incentives with the real needs of working families.
Why This Credit Is a Win for Child Care Providers
The Employer Provided Child Care Credit (Section 45F) also creates meaningful opportunities for child care providers. By encouraging employers to invest in child care solutions, it increases demand for provider partnerships and can lead to more consistent enrollment and revenue.
Providers may benefit from employer-sponsored slots, referral partnerships, or direct contracts, which can help stabilize their business and reduce reliance on unpredictable enrollment cycles. In many cases, these partnerships also allow providers to expand their reach, fill open capacity, and build long-term relationships with families connected to local employers.
How Winnie Helps Connect Providers and Employers
Platforms like Winnie make it easier for employers and childcare providers to connect and build long-term partnerships.
With Winnie, providers can be seen by employers who offer child care benefits, fill open spots, and build partnerships with companies investing in child care. Explore how to connect with employers offering childcare benefits on Winnie for Employers and grow your program.
How Employers Can Get Started
Employers interested in using the 45F credit can begin with a few practical steps:
- Assess employee child care needs
- Identify potential solutions (on-site care, partnerships, or subsidies)
- Estimate eligible expenses and potential tax benefits
- Consult a tax professional for guidance
- File IRS Form 8882 to claim the credit
Taking these steps can help employers design a child care strategy that supports employees while managing costs.
Frequently Asked Questions
What is the Employer Provided Child Care Credit (45F)?
It is a federal tax credit that helps employers offset the cost of providing child care services or support to employees.
How can childcare providers benefit from the 45F credit?
Providers can partner with employers to fill enrollment, secure consistent revenue, and grow their programs.
Do employers need to build a child care center to qualify?
No. Employers can qualify through partnerships, subsidies, or referral services.
What expenses qualify for the credit?
Qualified expenses include facility costs, operational expenses, and resource and referral services.
How do employers claim the credit?
Employers must file IRS Form 8882 with their federal tax return.
