State Tax Relief
NY State Tax Relief Options
NY Employer-Provided Child Care Credit
(Onsite child care, contracting for child care, helping to find child care). Businesses can receive a 50% tax credit for expenses related to supporting access to child care for employees and a 20% tax credit for contracts with Child Care Resource Centers to help families find child care. The tax credit is capped at $500,000 per year.
For Employers & Parents: Federal Tax-Free Payments for Child Care
Businesses can set up Dependent Care Assistance Plans (DCAPs), which are flexible spending accounts that enable employees to set aside up to $5,000 per year in pre-tax salary for child care expenses.
NY Child Care Creation and Expansion Credit
Businesses can receive a tax credit for expanding the availability of infant and toddler care for employees (i.e., beyond that available in the community on April 1, 2023). Infant and toddler care can be onsite or through a contract with regulated providers locally. The tax credit is available for 2023 and 2024 (unless extended for future years by the NY State Legislature).
For Parents: Federal Child and Dependent Care Tax Credit (CDCTC)
When employers send employees their W-2 at tax time, remind them if they have children for whom they pay for child care services, they are able to claim the CDCTC.
NY Excelsior Child Care Services Tax Credit
The Excelsior Jobs Program has a credit for net new jobs and related child care services. The child care portion of the credit is available for up to 6% of net new child services expenditures.
For parents: NYS and NYC Child and Dependent Care Tax Credits
When employers send their employees their W-2 at tax time, remind them if they have children for whom they pay for child care services, they may also qualify for NYS and NYC child and dependent care tax credits. The NYS credit is more generous than the federal tax credit. The NYC tax credit is available for parents with income of $30,000 or below with children under age 4 for whom they have child care expenses.