Employer Provided Child Care Credit – 45F

Overview

Employers rely on affordable, quality child care to support a robust workforce – but it’s often out of reach for too many working parents. The Employer-Provided Child Care Credit (45F) encourages businesses to provide child care to their employees by offering companies a tax credit to help cover some of the associated costs of child care.

This includes costs associated with purchasing, building, or updating property that can be used as a child care facility, and for the operating costs, including supporting child care professionals through training, scholarships, and wages.

In July 2025, 45F was permanently expanded and reformed for the first time since 2001. The new law increases the maximum credit and credit rate (which was previously 25%) to 40% for large businesses and 50% for small businesses, providing more of an incentive for them to participate. It also indexes the credit to inflation and simplifies the process for multiple employers to jointly contract with a qualified child care provider.