Employer-Sponsored Child Care ROI & Tax Credit Calculator

Make the business case for child care. Estimate savings from reduced employee turnover, absenteeism, and the expanded 45F federal tax credit.

High ROI Leading firms see significant returns investing in employee care benefits. Source: Moms First 11% Drop MTM saw attrition drop by 11% overall after implementing care stipends. Source: NPR 86% Agree Of HR leaders say child care benefits are key to recruiting top talent. Source: Benefit News $500k+ New 2026 cap for 45F Tax Credits (up to $600k for small biz). Source: FFYF / IRS 84% Of owners believe employees struggle to pay for quality child care. Source: US Chamber

Why Child Care is the Ultimate Retention Tool

In a competitive labor market, child care is no longer an "extra"—it is a critical business imperative. Companies that fail to address the care gap face higher turnover, frequent absenteeism, and a massive loss in institutional knowledge.

What is "Duo-Share" vs. On-Site Care?

For decades, employer-sponsored child care meant building an expensive on-site center. Duo-Share is the modern alternative. It is a shared cost model where the employer provides a set monthly stipend or backup care days, allowing parents to choose the licensed care that works best for their family.

  • Flexibility: Supports remote, hybrid, and shift workers across multiple zip codes.
  • Scalability: Employers set a budget (e.g., $250/mo or 10 backup care days per parent) with no capital expenditures.
  • Speed: Programs can be launched in weeks, not years.

Industry-Specific Child Care Solutions

Every industry faces unique workforce challenges. A one-size-fits-all child care benefit isn't enough. We provide tailored solutions that address the specific pain points of your sector.

🏥 Healthcare

Challenge: High turnover among nurses, 24/7 shift coverage needs.

Solution: Flexible stipends and backup care that support non-traditional hours and reduce costly absenteeism.

🏭 Manufacturing

Challenge: Retaining hourly workers in "child care deserts."

Solution: Building local capacity through partnerships and subsidies that make care affordable on an hourly wage.

The 2026 Federal 45F Tax Credit Advantage:

The federal government provides a powerful incentive for businesses to solve the child care crisis. Under the updated 45F Tax Credit guidelines:

  • 25% Credit: On qualified child care expenditures.
  • Small Biz Bonus: Up to 50% credit for eligible small businesses.
  • Increased Cap: Up to $500,000 per year (or $600,000 for small businesses) starting in 2026.

What HR Leaders Are Saying

"Implementing a child care stipend was the single most impactful retention initiative we've ever launched. Our voluntary turnover in our nursing department dropped by 8 points within a year. The ROI was undeniable."

- VP of Human Resources, 750-Bed Hospital System

The Business Case for Retention

The cost of losing a single employee is estimated to be between 50% and 200% of their annual salary. When you provide child care support, you aren't just paying a bill—you are protecting your investment in human capital. Our ROI calculator helps you quantify exactly how much turnover is costing your firm today.

ROI & Savings Projection
--%

By clicking Calculate ROI & Email Report, I state that I have read and understood the Terms and Conditions.

Projected Annual ROI
0%
$0
Net Corporate Benefit (Year 1)
Current Cost of Loss
Attrition & Absenteeism 		$0
Turnover Savings$0
Productivity Gain$0
Gross Program Cost$0
Est. 45F Tax Credit$0
Net Annual Savings $0

America's Top Employers Offer Child Care Benefits

🇺🇸 State-by-State Employer Child Care Tax Incentives

Many states offer specific corporate tax credits that can be stacked with the federal 45F credit to further reduce benefit costs.

Alabama: Employers can receive up to 100% credit for eligible expenses incurred covering employee child care costs through licensed facilities.
Arizona: Businesses may claim a 30% credit for costs associated with providing employee child care or establishing a facility.
Arkansas: Offers a 20% income tax credit for the cost of building, operating, and maintaining an on-site child care facility.
California: Offers separate, application-based credits like the "Child Care Facilities Credit." Does NOT automatically match the federal 45F credit. Check with the California Franchise Tax Board for current programs.
Colorado: A 50% income tax credit is available for contributions made to licensed care providers, capped at $100k annually.
Connecticut: Employers can claim a 5% credit for expenses related to the development or acquisition of a childcare facility.
Delaware: Offers a 50% tax credit for eligible child care expenses, specifically targeting workforce retention.
Georgia: A massive 100% credit for eligible employee child care expenses or a 75% credit for donated property.
Idaho: No state-specific employer child care tax credit. Standard federal deductions apply. Consider the federal 45F credit as your primary incentive.
Illinois: Features a 30% credit for start-up costs and a 5% recurring credit for annual operating expenses.
Indiana: A 50% tax credit is available for employer child care expenditures through the FSSA grant program.
Iowa: Matches the federal benefit with a 25% credit of expenses, capped at $150k per year.
Kansas: 30% credit for direct payments or up to 50% for facility construction costs (Max $45k).
Kentucky: One of the few states with a 100% matching program for employer contributions through the ECCAP partnership.
Louisiana: Offers a 50% match of the federal credit with refundable options for eligible businesses.
Maine: Tax credits are available for documented child care expenses, capped at $30,000 per tax year.
Maryland: A 25% corporate tax credit (Max $150k) for facility construction or general operating costs.
Mississippi: 50% income tax credit for new or improved facilities, with a cap of $150,000 per year.
Missouri: A 30% tax credit for contributions to child care providers, specifically targeting regional care gaps.
Montana: Provides an income tax credit for all dependent care assistance provided to employees.
Nebraska: Non-refundable tax credit for 30% of eligible costs associated with workforce child care.
Nevada: Offers a modified business tax credit for contributions made to child care programs.
New Jersey: Targeted tax credits for the construction of physical child care facilities within the state.
New Mexico: A 50% tax credit for costs incurred for employer-provided child care.
New York: 20% credit for direct provider payments and a 10% credit for facility operations.
Ohio: Offers specific grant-funded credits for establishing child care centers in underserved regions.
Oklahoma: A 20% tax credit is available for all eligible corporate childcare expenditures.
Oregon: Features a 50% credit for start-up or operating costs, capped at $2,500 per employee.
Pennsylvania: Targeted tax credits for employer child care contributions to improve workforce stability.
Rhode Island: 30% credit (Max $30k) for qualified costs associated with employee care.
South Carolina: 50% credit for establishing a new child care program, capped at $100k.
Tennessee: Offers a 50% corporate credit for employer child care expenditures.
Texas: Franchise tax credits and deductions are available for child care assistance programs.
Utah: A 50% tax credit is available for corporate childcare costs and stipends.
Vermont: 30% tax credit for construction and operation of childcare facilities.
Virginia: A 25% credit (Max $25k) for employer costs, with additional grants available for small biz.
Washington: B&O tax credits are available for direct child care contributions.
West Virginia: A 50% credit for facility costs (Max $100k) to support workforce resiliency.
Wisconsin: The primary state-level support is the "Partner Up!" grant program for employers, not a permanent statutory tax credit. Check with the Wisconsin DCF for current grant availability.

Frequently Asked Questions

What is employer-sponsored child care?

Employer-sponsored child care refers to programs where employers help employees pay for child care costs. Modern options include on-site child care centers, backup care networks, monthly stipends (duo-share model), near-site centers, or partnerships with local providers. The goal is to reduce employee turnover, improve recruitment, and increase productivity by addressing child care challenges that cost employers an average of $9,350 per parent per year in lost productivity and absences.

What is the federal 45F tax credit for employer-sponsored child care?

The federal 45F tax credit (Employer-Provided Child Care Credit) allows employers to claim up to 25% of qualified child care facility expenditures and 10% of qualified child care resource and referral expenditures. Starting in 2026, the maximum annual credit increases to $500,000 per employer. Qualified expenditures include costs for acquiring, constructing, rehabilitating, or expanding a child care facility, as well as operating costs for a licensed facility. This credit can significantly offset the cost of implementing employer-sponsored child care programs.

What is a duo-share child care model?

Duo-share is a modern employer-sponsored child care model where the employer provides a set monthly stipend (e.g., $250/month) or backup care days (e.g., 10 days/year) per parent employee, allowing families to choose their own licensed child care provider. This model is highly scalable with no capital expenditures, offers maximum flexibility for employees, and typically costs 70-85% less than building an on-site center. It's ideal for distributed workforces, remote teams, or companies that want to offer child care benefits without facility management.

How much does employer-sponsored child care cost?

Costs vary significantly by model. On-site child care centers require $1-3 million in startup capital plus $500K-$2M in annual operating costs. Backup care networks cost $1,200-$2,500 per employee per year. Duo-share stipend models cost $3,000-$6,000 per parent per year ($250-$500/month stipends). Near-site partnerships cost $2,000-$4,000 per employee per year. The most cost-effective approach for most employers is the duo-share model, which provides meaningful support without facility management or large capital investments.

What is the ROI of employer-sponsored child care?

Studies show employer-sponsored child care delivers 125-425% ROI through reduced turnover (child care issues cause 20-30% of parent employee turnover), improved recruitment (60% of parents say child care benefits influence job decisions), increased productivity (parents with reliable child care miss 30% fewer workdays), and tax benefits. For example, a company spending $250K annually on duo-share stipends for 100 parent employees can save $400K-$600K in turnover costs alone.

Do all states offer employer child care tax incentives?

No, only about 39 states currently offer employer child care tax incentives beyond the federal 45F credit. These vary widely by state. Some states like Alabama offer up to 100% credit for eligible expenses, while others like California, New York, and Indiana offer percentage-based credits ranging from 30-50%. Employers should check their state's specific incentives and consider stacking federal and state credits for maximum tax benefit.

What size company should offer employer-sponsored child care?

Any size company can offer employer-sponsored child care, but the model should match company size. Small businesses (10-50 employees) work best with duo-share stipends or backup care partnerships. Mid-size companies (50-500 employees) can use facilitator hubs or regional backup care networks. Large enterprises (500+ employees) may consider blended approaches combining stipends with on-site or near-site centers at headquarters.