Every employer in the country now gets a large share of what it spends on employees' licensed child care back from the federal government. What a state adds on top ranges from a lot to nothing. This map shows which is which.
Since January 2026, the federal government reimburses 40% of what employers spend on employees' licensed child care, 50% for smaller companies. That part is the same in every state. The IRS explains it on its own page, and the Bipartisan Policy Center has a plain-English 2026 guide. The usual catches apply everywhere too: the care has to be licensed, the benefit has to be broadly available across the workforce, and credits mostly help companies that owe taxes.
What differs is what the state adds. Five states have a substantial credit of their own on the same spending, led by New York, whose credit is the strongest state companion to the federal one in the country. Fifteen more have a credit that stacks but comes with a catch: a small statewide pool that runs out in January, a low per-employer cap, a C-corporation-only rule, or a facility-only design. Fifteen have no employer credit but run something else useful, such as a state match, a three-way cost share, or a donation credit. The remaining sixteen, counting the District of Columbia, add nothing on the employer side, and a few of those repealed a credit recently.
Hover over or tap a state for the short version. Each state's longer note, with a link to the official page or a good independent explainer, is further down.
The short notes below are meant to orient, not to advise. Each state with a program links to the state's own page for the full terms, and every state's rules turn on details that only a current-year check of the statute and forms can settle. For a side-by-side of the credits themselves, see the Bipartisan Policy Center's state tracker or the Policy Institute for Children's 2026 comparison of federal and state credits (PDF).
A large state credit on the same spending the federal credit covers, usable by most employers that owe state tax.
New York's employer-provided childcare credit is computed from the federal credit and is refundable, which makes it the strongest state companion to the federal credit in the country. It applies to spending on care at New York facilities and has an annual cap. How far it reaches for a given employer depends on facts and open questions worth working through with your advisors.
Wisconsin's 2025 Act 183, signed in April 2026, creates a state credit equal to the federal credit an employer actually claims on care at Wisconsin facilities and services, so the federal rates and caps carry straight through. The employer has to claim the federal credit to get it, the federal rules are locked in as they stood in April 2026, and the credit is not refundable. It starts with tax year 2026.
West Virginia offers a credit for 50% of the annual cost of providing child care for employees, net of anything employees pay, with no dollar cap and a five-year carryforward. A 2026 amendment, effective July 1, 2026, extends it to third-party licensed centers anywhere in the state that an employer supports through direct payments, contracts, or subsidies. A separate credit for 50% of the cost of a facility, spread over five years, still applies only to employer-run facilities. Both are nonrefundable, and the Tax Division has not yet issued updated forms.
Georgia's credit covers 75% of an employer's direct cost of providing or sponsoring employee child care, and 100% of the cost of child care property spread over ten years. It is generally limited to half of the employer's Georgia tax in a year, with carryforwards.
Starting with tax year 2026 there is also a separate per-child credit for employers that pay at least $1,000 a year directly to a licensed facility for an employee's child under six. It requires preapproval from the Department of Revenue, draws first-come on a $20 million annual statewide cap, has no carryforward, and runs through 2030.
Georgia Department of Revenue on the employer child care credits
South Carolina offers 50% of the capital cost of establishing an employee child care program, up to a cap, plus a credit on payments made for employees' care with a per-employee limit. Both stack with the federal credit. The caps keep the state piece modest for larger programs.
South Carolina Department of Revenue Form TC-9, credit for child care program (PDF)
A state credit that stacks with the federal one, but with a catch: a small statewide pool, a per-employer cap, a C-corporation-only rule, a facility-only design, or a no-cost-sharing rule.
Alabama's credit, created in 2024, returns 100% of eligible child care spending for employers with fewer than 25 employees and 75% for larger ones, up to a per-employer cap, and includes direct payments to licensed facilities and employee stipends. The catch is a statewide pool (about $17.5 million in 2026, rising to $20 million in 2027) reserved first-come through the state's tax portal, plus a quality-rating requirement for providers. It is scheduled to sunset at the end of 2027.
Alabama Department of Revenue on the employer child care credit
Alaska's credit covers 50% of in-state facility operation, contributions to nonprofit facilities, or direct payments to employees for child care. It shares a $3 million cap with the state's education credit and applies to corporate income tax and several industry taxes, so pass-through businesses generally cannot use it. It sunsets at the start of 2028.
Connecticut's human capital investment credit gives corporations 25% back on child care spending: establishing an in-state facility, donating to nonprofit child care organizations, or subsidizing employees' in-state care directly. It is available only against the corporation business tax, with a carryforward. Some of what it covers is not spending the federal credit recognizes, and the reverse is also true.
Connecticut Department of Revenue Services on the human capital investment credit
Florida's 2024 credit program covers 50% of startup costs for a facility (with caps that are larger for smaller employers), a monthly per-child credit for operating one, and 100% of payments made to a facility on an employee's behalf up to an annual per-child limit. Applications open on the first business day of January against a $5 million statewide pool that goes quickly. It applies to corporate income and a handful of other business taxes, not personal income tax, so most pass-through employers are left out. A 2026 law extended the pool through the state fiscal year ending June 30, 2028; after that, no new credits are available unless the legislature acts again.
Florida Department of Revenue on the child care tax credits program
Illinois gives corporate taxpayers 30% of the startup cost of an employee child care facility and 5% of its annual operating cost. The facility must be in Illinois. A 2026 bill to raise both rates stalled in committee.
Indiana's credit returns 50% of qualified child care spending up to $100,000 per employer, drawn from a $2.5 million annual statewide pool in the order returns are filed. Legislation signed in 2026 opened it to employers with up to 500 employees and broadened eligible spending to include operating costs, contracts with existing programs, and scholarships. The state revenue department said in September 2026 that no employer has claimed it yet.
Indiana Department of Revenue bulletin on the employer child care expenditure credit (PDF)
Kansas amended its child care assistance credit in April 2026. Beginning with tax year 2027 it covers 75% of an employer's child care spending up to $100,000 per employer, within a $3 million statewide cap that is likely to bind. The older, smaller regime applies through 2026.
Louisiana's workforce child care credits, effective 2026, return 50%, 40%, or 30% of eligible spending depending on the center's quality rating, and are refundable. Eligible spending includes payments to centers on employees' behalf, slot purchases, and construction, each with its own annual limit. A statewide pool of about $1 million (growing if fully used) is allocated first-come through an application window early each year, the first running January 1 through February 28, 2027.
Louisiana Department of Revenue workforce child care tax credit guide (PDF)
Mississippi gives employers a credit for 50% of the cost of dependent care provided for employees during working hours, or of child care stipends paid directly to licensed Mississippi providers. A 2026 law, effective July 1, 2026, lowered the minimum stipend to $2,000 per child, capped the credit at $3,000 per child per year, and put the whole credit under a $1 million statewide annual cap. Employers also have to certify each employee, stipend, and provider to the state.
It still sits alongside the federal credit on the same spending, but the per-child cap and the pool keep it small. The Department of Revenue has not yet said how the pool will be allocated.
New Hampshire's 2026 law creates a 50% credit against the business profits and business enterprise taxes for investment that builds or expands child care capacity, including the first two years of operating costs. Seats must be created on or after January 1, 2027, expansions must add a minimum number of seats, and awards come from a $5 million annual pool by application, for tax periods ending on or after December 31, 2027. It fits building or partnering on new capacity, not paying for existing slots.
North Dakota's 2025 credit gives employers 50% of what they pay licensed North Dakota facilities (or reimburse employees) for child care, on the first $1,000 per employee per year. Every entity type can use it, there is no per-employer or statewide cap, and it must be offered to all employees on equal terms. The per-employee amount is small but the design is simple.
North Dakota Tax Commissioner on the employer child care credit
Pennsylvania's contribution credit returns 30% of what an employer contributes toward employees' child care, but only on the first $500 per employee per year, with certified providers and an all-employees requirement. It stacks with the federal credit in principle. In practice the amount is small.
Applications for a year's contributions open October 1 and close January 31 of the following year. Bills pending in both chambers would raise the credit to 100% of contributions up to $10,000 per employee, which would make it one of the largest state employer credits in the country. They lapse at the end of November 2026 unless passed.
Pennsylvania Department of Revenue on the employer child care contribution credit
Rhode Island's credit covers 30% of purchased day care for employees' dependents or of establishing and operating a facility, each with a cap. Since 2011 it cannot be taken against personal income tax, so it helps C corporations and a few other entity types only, and a facility must accept subsidized children.
Utah's 2026 credit, retroactive to January 1, 2026, gives eligible small businesses 30% of qualified child care spending (10% for other employers), plus 20% for on-site construction. It requires the employer to claim the federal credit and the care to be provided at no cost to the employee, which rules out cost-sharing designs. There are no per-employer or statewide caps, and it is available to pass-through businesses.
Utah Governor's Office of Economic Opportunity on the employer child care credits
Virginia's credit covers 25% of the cost of planning, building, renovating, or acquiring an employee child care facility, up to $25,000 per taxpayer, within a $100,000 annual statewide program cap. It requires approval from the Tax Commissioner, and the pool is small enough that it rarely matters in practice.
No credit on an employer's own employee care, but something else that can lower the cost of a program: a state match, a three-way cost share, grants, a donation credit, or a provider-side tax break.
Arkansas offers a credit based on the salaries of employees who work exclusively in an employer-operated child care facility, plus a one-time first-year credit. It does not apply to tuition assistance or payments to outside providers. A broader 50% employer credit was proposed in 2025 and did not pass.
Arkansas Department of Finance and Administration, business incentives and credits
Colorado's employer child care investment credits expired for tax years beginning on or after January 1, 2026. What remains is a contribution credit for 50% of monetary donations that promote child care, extended in 2026 through 2037, which is a donation channel rather than a credit on an employer's own employee care.
Colorado Department of Revenue on the child care contribution credit
Kentucky's Employee Child Care Assistance Partnership matches what an employer contributes toward an eligible employee's child care, with the match rate sliding from 100% for lower-income households to 50% for higher ones, up to a household income limit. The match is paid directly to providers. There is no state tax credit, but for eligible employees the match can cover a large share of the cost of a given benefit.
Maryland has no employer-side child care credit. Its 2026 legislative action was on family scholarships and copays, not employer incentives.
Massachusetts offers competitive grants rather than an employer credit. A bill to create an employer-provided child care credit pilot was reported favorably in March 2026, the furthest an employer credit has gotten in the state in years, but it did not advance before formal sessions ended in July. Expect it to be refiled in January 2027.
Commonwealth Corporation on the Employer Child Care Innovation Fund
Michigan's Tri-Share program splits the cost of an eligible employee's child care three ways, with regional facilitator hubs handling enrollment and payments. A July 2026 law made the program permanent and added a version open to employees at any income level. There is no tax credit, but it cuts an employer's cost of sponsoring care by roughly two-thirds.
Minnesota funds child care through Department of Employment and Economic Development grants rather than an employer credit. An employer child care credit bill has been introduced but not enacted.
Nebraska's child care contribution credit returns 75% of qualifying contributions (100% in certain areas) up to a per-taxpayer cap, from a $2.5 million statewide pool. Tuition assistance for an employer's own employees does not count as a contribution, so it is a donation channel.
Nebraska Department of Revenue on the child care contribution credit
North Carolina runs a Tri-Share pilot through Smart Start, opened to businesses statewide in 2025, that splits eligible employees' child care costs three ways. The state's old employer credits were repealed long ago, so this cost share is the employer-side channel today.
New Jersey has no employer child care credit today, only child care facility improvement grants through the state economic development authority. A bill to create a 50% employer credit with a per-employer cap cleared a Senate committee with amendments in February 2026 and now sits with the Senate Budget and Appropriations Committee. The session runs to January 12, 2027, so the lame-duck months are the ones to watch.
New Jersey Economic Development Authority child care facilities improvement program
Ohio's Child Care Cred program, funded in the 2025 state budget, has the state cover roughly a fifth of an eligible employee's child care cost with the employer and employee splitting the remainder. There is no employer tax credit. A bill to create one has sat in committee since 2025 and expires at the end of 2026 unless it moves in the lame-duck session.
Oregon's employer child care credit sunset in 2016, leaving only carryforwards. A contribution credit for donations to child care remains, with a small statewide pool, so there is effectively no state credit on an employer's own employee care.
Tennessee has no enacted employer child care credit. Its 2026 Promising Futures Fund instead funds a CareShare TN employer cost-share pilot and workforce scholarships, so the employer-side channel is a cost-share program rather than a tax credit. CareShare TN is expected to launch in 2027.
Tennessee General Assembly page for the Promising Futures Act (SB 2062)
Texas has no state income tax and no employer child care credit. Its 2023 law lets local governments exempt qualifying child care providers from property tax, which matters for provider economics rather than for employers.
Texas Legislature analysis of the child care property tax exemption (SB 1145, 2023)
Washington has no employer child care credit against its business and occupation tax. A 2025 exemption relieves child care providers of B&O tax, a provider-side benefit.
Washington Department of Revenue notice on the child care B&O exemption
No employer-side state incentive. The federal credit still applies in full. A few of these states repealed a credit recently, and a few have live bills to create one.
Arizona has no employer child care credit. Recent state action has been on the family side.
California repealed its employer child care credits around 2012 and has not revived them. A 2026 bill for a contribution credit was held in committee, and the state has not conformed to the 2025 federal changes.
Delaware has no employer child care credit. Its child care credit, and a 2026 bill to expand it, are on the family side.
The District of Columbia has no employer child care credit. Its Keep Child Care Affordable credit is an individual credit.
Hawaii has no employer child care credit. Recent legislation has been on the family side.
Idaho has no employer child care tax credit. The Workforce Development Council runs child care expansion grants, and recent tax action was a family child tax credit.
Iowa's employer child care credit was one of only two in the country computed from the federal credit, but it saw almost no use and was repealed in 2025. There are no awards for tax years beginning on or after January 1, 2026. Existing carryforwards run off.
Iowa Department of Revenue form for the credit's final year (PDF)
Maine's old employer-assisted day care credit ended for tax years after 2015. A 2026 bill for a refundable 50% employer credit died when the session ended and is a strong candidate to come back.
Missouri has no employer child care credit. A package including a 30% employer credit passed the House in April 2026 and died in the Senate, the fourth consecutive year. If enacted in a future session it would likely apply from tax year 2027.
Montana repealed its employer child care credit in 2021. A 2025 law funds provider grants instead, and a 2025 credit package died in committee.
Nevada has no income tax and no child care credit against its payroll or commerce taxes.
New Mexico repealed its corporate child care credit effective July 1, 2025, as the state moved to state-funded universal child care. No replacement credit was enacted in 2026.
Oklahoma's old employer child care credit was repealed in 2014 and its provider-side credit sunset in 2016. A 30% employer credit passed the House in 2025 and died in the Senate. A House interim study of state incentives for employer child care, approved in July 2026, must be heard by October 31, 2026, which makes Oklahoma one to watch for the 2027 session.
South Dakota has no income tax and nothing employer-side. Child care bills in 2025 failed or were vetoed.
Vermont has no employer credit. Since 2023, employers pay a 0.44% child care contribution payroll tax that funds the state's child care financial assistance program, so the employer-side obligation runs the other way.
Wyoming has no income tax, no employer credit, and no state match. Only philanthropic startup grants exist.
Where your employees work decides which of these applies. Tell us the state and the rough size of the program you have in mind and we will tell you what the federal and state pieces look like, and what the catch is.
No obligation. We answer questions from employers, brokers, and accountants alike.
This page is a general orientation, not legal, tax, or financial advice, and it is not a substitute for reading a state's current statute and forms. Care Assembly is not a law firm or CPA firm. State programs change during every legislative session. If you spot something out of date, tell us. Tier placements reflect our reading of how each state's program interacts with the federal credit for a typical employer; a particular employer's result can differ.