Supporting Affordable Child Care for Employees
According to a Child Care Aware of America report about the price of child care throughout the United States , in 2012, the average annual cost of infant center-based care in Georgia was $7,200. That’s just $200 less than the average annual cost of college tuition in Georgia. The average annual cost of center-based care for a 4 year-old was $6,234. Family child care homes in Georgia are somewhat less expensive, but not much. In 2012, the average annual cost of infant care in a family child care home was $5,700. The average annual cost of care for a 4 year-old in a family child care home was $5,200.
Employers can help make child care more affordable for families by:
Federal Tax Relief:
- Offering on-site child care. Businesses can receive a federal tax credit equal to 25 percent of expenses for employee child care. The maximum credit allowed per year is capped at $150,000.
- Contracting for child care. Businesses can contract with a child care program to provide child care for their employees. Like on-site child care, the federal credit is limited to 25 percent of expenses and capped at $150,000.
- Helping families find child care. Businesses can receive a 10 percent federal credit for contracting with Child Care Resource and Referral Agencies, like Quality Care for Children, to help families find child care within their budget.
- Offering Employees Tax-Free Payments for Child Care. Employers can set up Dependent Care Assistance Plans, which are flexible spending accounts, and enable employees to set aside up to $5,000 in pre-tax salary for child care expenses.
- Tell Your Employees about the Dependent Care Tax Credit (DCTC). When you send your employees their W-2 at tax time, remind them that if they have children for whom they pay for child care services, that they should claim the DCTC.
Georgia Tax Relief:
- Offering On-Site child care. Businesses can receive a 100 percent credit (10 percent per year over 10 years) for land acquisition, improvements, buildings, building improvements, furniture and equipment used for the construction, expansion, improvement or operation of an employer provided child care program.
- Contracting for child care. Businesses that provide or sponsor child care for employees are eligible for a tax credit of up to 75 percent of the employers’ direct costs. In sponsoring child care for employees, businesses contract for child care slots with local child care programs.
- Tell Your Employees about the Georgia Child Care Tax Credit. This credit offers families an additional 30 percent of the federal DCTC, when families file state taxes.
Child Care Subsidies:
Low wage earning families may be eligible for child care subsidies through the Childcare and Parent Services (CAPS) program operated through the Georgia Department of Early Care and Learning. Eligible families can earn up to about 150 percent of the federal poverty level and still potentially qualify for child care subsidies. In 2014 in Georgia, qualifying families with annual income up to $22,404 for a family of two, $28,164 for a family of three, $33,924 for a family of four and $39,684 for a family of five may be eligible for a subsidy to help make child care more affordable. The most recent data shows that an average of 45,800 children in Georgia each month receive a subsidy to help pay for the cost of child care. More than half of the children whose care is paid for with a subsidy are under age five. More information about the CAPS program, is located here.
Georgia’s Strategy for Quality Child Care
Ask your employees to look for quality rated care, Georgia’s new system to provide parents a way to differentiate among the quality of child care settings. It’s hard to find child care. It’s even harder to know how to compare child care programs and understand the quality of the settings. Georgia’s Quality Rated system is designed to take the guess work out of looking for child care for parents.
Georgia SHAPE programs demonstrate excellence in nutrition and physical activity measures as reported on their Quality Rated Assessments. Check out the latest list of Georgia SHAPE programs.
- Child care providers can participate in Let’s Move: Child Care!, a nationwide effort to improve nutrition and physical activities in child care. It’s free!
- Employer Tax Incentives for Child Care Summary
- Employee Tax Incentives for Child Care Summary
- Employee Tips, Resources & Definitions Summary for Finding Quality Child Care
- Information about Georgia’s Quality Rated child care programs
- Quality Rated Brochure
- Information about Georgia’s Childcare and Parent Services (CAPS) subsidy program
- For Businesses: Support shared services to promote child care program economics (economies of scale for products & services used by small child care programs to better make ends meet)
- The Business Case for Early Education Investments (One Pager)