Employer Child Care Tax Credit
Investing in Child Care
The Iowa Employer Child Care Tax Credit encourages businesses to address talent recruitment and retention efforts through child care benefits. The program offsets the expenses related to the employer's child care services and projects.
The State of Iowa is authorized to award $2 million annually in tax credits, with a maximum of $150,000 in tax credits per employer.
Authorized expenditures include:
- Acquisition, construction, rehabilitation or property expansion as part of a qualified child care facility
- Operating costs of a qualified child care facility
- Contract with a qualified child care facility to provide services to employees
- Contract for resource and referral services to improve employee access.
Who Qualifies?Qualifying employers are businesses in Iowa that are eligible for the federal tax credit for employer-provided child care expenditures. Businesses interested in the credit should discuss their eligibility with a qualified tax professional.
- Provide documentation of federal tax credit amount
- Complete and submit a CPA examination, which must conclude that the qualified child care expenditures meet the requirements of Iowa Code section 237A.31 as amended by 2023 Iowa Acts Senate File 181 and 261 Iowa Administrative Code 261.57
How Do I Apply?The application will be available January 2024.
Applications will be submitted through IowaGrants.gov.