Employer Childcare Tax Credit
Description
The Iowa Employer Childcare Tax Credit can save employers with eligible expenses by offsetting tax liability.
The Iowa Economic Development Authority will administer the program pursuant to Iowa Code section 237A.31.
Iowa employers must apply for the tax credit within 90 days of the close of tax year during which qualified expenditures are paid or incurred.
The tax credit amount is equal to the proportion of the federal employer-provided child care tax credit for which the employer was eligible in the same tax year attributable to expenditures made in Iowa.
To be eligible for the tax credit, Iowa employers must be eligible for the federal tax credit for employer-provided child care expenditures and complete a CPA examination verifying expenditures are eligible under Iowa Code and administrative rules.
Authorized expenditures include:
o Acquire, Construct, Rehabilitate, or Expand property to be used as part of a qualified childcare facility.
o Operating Costs of a Qualified Child Care Facility
o Contract with a Qualified Child Care Facility to provide services to employees.
o Contract for Resource and Referral Services to improve employee access.
Administrative rules for the program can be found at 261.57.pdf (iowa.gov)
Description of qualified expenditures can be found at 26 USC 45F: Employer-provided child care credit (house.gov)
Employer Childcare Tax Credit
Description
The Iowa Employer Childcare Tax Credit can save employers with eligible expenses by offsetting tax liability.
The Iowa Economic Development Authority will administer the program pursuant to Iowa Code section 237A.31.
Iowa employers must apply for the tax credit within 90 days of the close of tax year during which qualified expenditures are paid or incurred.
The tax credit amount is equal to the proportion of the federal employer-provided child care tax credit for which the employer was eligible in the same tax year attributable to expenditures made in Iowa.
To be eligible for the tax credit, Iowa employers must be eligible for the federal tax credit for employer-provided child care expenditures and complete a CPA examination verifying expenditures are eligible under Iowa Code and administrative rules.
Authorized expenditures include:
Acquire, Construct, Rehabilitate, or Expand property to be used as part of a qualified childcare facility.
Operating Costs of a Qualified Child Care Facility
Contract with a Qualified Child Care Facility to provide services to employees.
Contract for Resource and Referral Services to improve employee access.
Administrative rules for the program can be found at 261.57.pdf (iowa.gov)
Description of qualified expenditures can be found at 26 USC 45F: Employer-provided child care credit (house.gov)
Additional Requirements
Must provide documentation of federal tax credit amount with application
Must complete and submit a CPA examination with application showing that qualified child care expenditures meet rules of Iowa Code
For questions, contact: 515-452-0442, childcaretaxcredit@iowaeda.com
