Originally published in the Winter 2023 Issue of Kansas Child Magazine.
The most common challenge parents face when searching for child care is cost. In Kansas, the average monthly cost for infant care is $680 per child in a home care environment and $1,259 in a child care center.
The 2022 Kansas Legislature took a great first step to help make child care more affordable. As of July 1, 2022, all Kansas businesses can apply to receive a state income tax credit for providing child care for employees or helping employees pay for other child care. This expanded tax credit allows businesses — small and large alike — to provide an additional benefit to employees, easing the child care burden for working parents and guardians.
all Kansas businesses can apply to receive a state income tax credit for providing child care for employees or helping employees pay for other child care
The expansion of the tax credit helps employers support their employees, even if they are not big enough to create a child care program on their own. It also helps support children’s need for a stable early learning environment during the most essential phase of brain development.
Credit Amounts
The credit amounts are:
- 30% of the total amount spent by an organization to help an employee pay for child care. The credit for this qualifying expense is capped at $30,000.
- 30% of the total amount spent by an organization to help employees locate child care. For example, this covers contributions to a child care resource and referral agency such as Child Start, The Family Conservancy, Child Care Aware® of Eastern Kansas, or Child Care Aware® of Kansas. The credit for this qualifying expense is capped at $30,000.
- 30% of the total amount spent operatinga child care facility primarily used by dependents of the organization’s employees, after excluding the amount of money received to provide child care services (i.e., tuition from parents). The credit for this qualifying expense is capped at $30,000.
- 50% of the total amount spent establishinga child care facility primarily used by dependents of the organization’s employees (i.e., employer-based or on-site child care). The credit is capped at $45,000.
- 50% of the total amount spent establishingand operating a child care facility, in conjunction with other businesses/organizations, primarily used by dependents of the organizations’ The credit is capped at $45,000.
As your business begins work planning and applying for this credit, you should consult your accounting and tax professionals to confirm your understanding of the credit and ensure that all allowable costs are claimed.
Claiming the Credit
To claim the credit, your business must complete Schedule K-56, which is filed with the state income tax return. With only $3 million available to be claimed each year, businesses receive the credit on a first-come, first-served basis when they file their tax returns in the spring
We hope that this financial incentive will help more Kansas businesses recognize how they benefit from their employees having reliable, high-quality child care — and lead them to support child care financially.
For years, parents and providers have been holding the child care system together with minimal resources and good intentions. It’s long past time for the rest of us to prioritize this investment in the next generations of Kansans.
