Employer-Provided Child Care Credit: Everything You Need to Know
As a working parent, finding quality and affordable child care can be a challenge. The good news is that your employer may be able to help. The employer-provided child care credit is a tax credit that is designed to help employers offset the cost of providing child care services for their employees. In this article, we’ll take a deep dive into what it is, how it works, who is eligible to take advantage of it, and how you can use it to your benefit.
What is the EPCC credit?
It is a tax credit that is available to employers who provide child care services for their employees. This credit is designed to help offset the cost of providing these services and encourage employers to offer this benefit to their employees.
How does it work?
The credit is a non-refundable, which means that it can only be used to offset the amount of tax that an employer owes. The credit is calculated based on the amount that the employer spends on child care services for its employees. The credit is equal to 25% of the qualifying expenses for the first $150,000 of expenses, and then 20% of any expenses over that amount.
What expenses are eligible?
Expenses that are eligible include the cost of operating a child care facility, such as rent, utilities, supplies, and salaries for employees. In addition, the cost of providing child care services for employees, such as on-site care or referral services, may also be eligible for the credit.
Who is eligible to take advantage?
To be eligible an employer must provide child care services for its employees. The services must be available to all employees, and the cost of the services must be paid for by the employer. The employer must also meet certain other requirements, such as being a for-profit organization and operating a qualified child care facility.
How can you use the program to your benefit?
If your employer offers the program, you can take advantage of it by using the child care services that are provided by your employer. This can help to reduce the cost of child care, which can be a significant expense for many families. In addition, if you use the services of a qualified child care provider, you may also be eligible for additional tax benefits, such as the dependent care tax credit.
In conclusion, the EPCC is a valuable benefit that can help working parents offset the cost of child care. If you are a working parent and your employer offers this credit, be sure to take advantage of it to help ease the burden of child care expenses.
If you have questions or would like to learn more about how it can help you, book a call with one of our tax credit specialists today. Our specialists have the expertise and experience to help you understand this credit and how to use it to your advantage.