IRS Launches Hub for Employer-Provided Childcare Tax Credit

Written By Alex Santos

The IRS website homepage.

The IRS has introduced a dedicated webpage offering comprehensive information on the Employer-Provided Childcare Tax Credit, a beneficial incentive for businesses providing childcare services to their employees.

Tax Credit Details

The Employer-Provided Childcare Tax Credit assists employers in offering childcare services and facilities to their workforce. IRS Commissioner Danny Werfel emphasizes its significance in supporting businesses to provide essential child-care services, underscoring the creation of a user-friendly information hub on IRS.gov/employerchildcare.

How It Works

This tax credit aims to aid employers in covering qualified childcare facility and resource expenditures. A qualified childcare facility complies with all applicable laws and regulations at the state or local level. The credit is capped at $150,000 annually, offsetting 25% of qualified childcare facility expenditures and 10% of qualified childcare resource and referral expenditures.

Claiming the Credit

To avail the credit, employers must complete Form 8882, specifically designed for the Credit for Employer-Provided Child Care Facilities and Services. This credit falls under the general business category, adhering to the carryback and carryforward rule. Unused credit can be carried back one year and carried forward up to 20 years.

Reporting and More Information

For taxpayers relying on pass-through entities for the credit, reporting can be done directly on Form 3800, General Business Credit. The IRS's Employer-Provided Childcare Tax Credit homepage on IRS.gov offers additional details on claiming the credit, encompassing requirements for qualified childcare expenditures and facilities.

Q&A Section

Q1: What are qualified childcare facility expenditures?

Qualified childcare facility expenditures pertain to costs associated with maintaining a childcare facility, subject to state or local regulations.

Q2: Can the tax credit be carried forward indefinitely?

No, the carryforward period for unused credits is limited to 20 years after the year of the credit.

Q3: Where can employers find more information about the Employer-Provided Childcare Tax Credit?

Detailed information, including requirements for qualified childcare expenditures and facilities, is available on the Employer-Provided Childcare Tax Credit homepage on IRS.gov/employerchildcare.

Alex Santos
As Managing Member of Collabor8 Learning, my role is to build and execute learning and development strategies for organizations seeking to improve the return they are getting from their training programs. We focus on four core areas: performance analysis, instructional design, e-learning development, and learning management. As a hybrid HR/instructional design consultancy, Collabor8 Learning partners with your team to leverage today's training technologies to increase the productivity of your people. I am a senior human resources and training executive with over 17 years of progressive experience. My work in private industry has focused heavily on the development of learning and development systems that transform employee performance from ordinary, to remarkable. I accomplish this by combining organizational development strategies and tactics to blended learning programs with line of sight alignment to clearly defined performance goals. Additionally, I launched Miami Payroll Center in conjunction with my brother and sister-in-law in 2004 to meet the payroll needs of small to mid-size organizations. Our consultative approach to guiding new entrepreneurs as well as more seasoned business owners in alleviating the pain of payroll processing has created a very successful and growing payroll processor in the market. Specialties: Instructional Systems Design, E-Learning, Learning Management Systems, Payroll, Organizational Development, Employee engagement, HR Strategic Planning, Talent Acquisition & Management, Leadership Development, Coaching & Mentoring, Employment Branding Proposition & Positioning, Workforce Planning, Performance Management, and Leadership Development.
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