Employer-Provided Child Care Credit — BIG Changes Coming

Right now, businesses can claim a credit equal to 25% of child care expenses, up to $150,000 per year.

But starting in 2026:

– The credit jumps to 40% for regular businesses- And up to 50% for eligible small businesses- The annual credit cap increases to $500,000 or even $600,000

That means up to a $600k tax credit for helping employees with child care.

Why this matters in construction

Many crews are losing great workers because parents can’t find affordable child care. This credit lets you:

Offer a benefit your competitors aren’t offering

Improve retention and reduce turnover costs

Support your workforce without taking a huge hit to cash flow

Potentially save hundreds of thousands in taxes

How contractors can qualify

You can get the credit if you:

Help pay for employees’ child care, or

Help fund a child care facility or partnership your employees can use

If you’ve ever said “we’d grow if we could keep the workers,” this is a tax incentive built exactly for you.

If you want to plan ahead so you’re ready to take advantage of the 2026 rules, reach out.