By Matthew Henry.
The final return has been filed. The deadline has passed. But now — right now — is when the most strategic work begins.
For CPAs, accountants, and tax professionals, post-tax season is more than a breather. It’s an opportunity to shift gears — from compliance to consulting. It’s when clients need more than filings. They need guidance. Insight. And bold solutions to the growing challenges keeping their businesses. One powerful strategy you can add to your advisory playbook: Child Care tax credits and incentives.
Yes, Child Care. It’s more than a personal issue for working parents — it’s a major business and economic one. And right now, it’s a tax opportunity hiding in plain sight.
Why This Matters Now
Across the country, businesses are still struggling to hire and retain talent. Working parents — especially women — are opting out of the workforce or reducing hours because they can’t find or afford reliable Child Care. The U.S. Chamber of Commerce reports that this crisis costs the economy $122 billion annually in lost productivity and revenue.
Your business clients feel this, even if they haven’t named it. Missed shifts. High turnover. Rising costs from constant rehiring.
But here’s the upside: the IRS and many state governments want to reward businesses that help solve the Child Care challenge. The tax code already offers incentives, and some are surprisingly generous. Yet most businesses aren’t taking advantage — because they don’t know they exist, or they don’t have an advisor pointing them in the right direction.
That’s where you come in.
The Power of Section 45F—and Beyond
One of the most overlooked tax credits on the books is the Employer-Provided Child Care Credit (IRC §45F). It allows employers to claim up to $150,000 in annual federal tax credits for supporting Child Care — whether that means building a facility, contracting with Child Care Benefit solution companies, or offering direct subsidies.
Beyond the federal level, more than two dozen states offer additional credits and incentives to businesses that invest in Child Care support. Some provide corporate income tax credits, others offer grants or payroll tax offsets. In a growing number of cases, states are aligning these incentives with economic development programs — making them even more strategic for your clients.
To help you and your clients navigate this evolving landscape, this state-by-state guide breaks down the current business Child Care tax credits and incentives available nationwide.
What This Means for You—and Your Clients
You already help your clients make smart, compliant decisions. But helping them retain top talent, improve productivity, and unlock new tax savings? That’s where you become a trusted strategic partner.
By proactively identifying whether a client is eligible — or could become eligible — for Child Care tax credits, you’re:
- Helping them recover dollars they’re leaving on the table
- Positioning them as an employer of choice in a tough labor market
- Guiding them to long-term solutions that reduce churn and absenteeism
- Strengthening your own client relationships with year-round, value-added insight
This isn’t about offering a one-size-fits-all benefit. It’s about working with clients to assess their workforce, crunch the numbers, and design the right-fit solution that makes business and financial sense.
Make It Actionable: 4 Steps to Get Started
- Review Your Client Roster
Identify clients with a sizable working-parent population or hiring challenges. These are your best candidates. - Evaluate Missed Opportunities
Did any of your clients invest in care support — formally or informally — this year? If so, were those efforts credit-eligible? Could they be next year? - Map the Incentives
Use the incentives guide to identify what’s available in your clients’ states. Many of these programs have open enrollment or planning cycles that start mid-year. - Initiate the Conversation
Don’t wait for clients to ask. Frame it as part of workforce and tax strategy planning: “Would you be interested in exploring ways to improve retention and qualify for tax credits by supporting working parents?”
The Bottom Line
You don’t need to become a Child Care expert. You just need to recognize the role it plays in your clients’ bottom line — and the value of the tax tools already available to support it.
This is more than a benefit conversation. It’s about resilience. Stability. And the ability for your clients to build a workforce that works.
As their CPA, you’re not just their tax preparer. You’re their pathfinder. And when you help them navigate toward smarter solutions — like Child Care credits — you don’t just save them money. You help them invest in people, in potential, and in a more sustainable future.
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Matthew Henry is the Senior Director of Government Solutions at TOOTRiS, a technology platform transforming the way parents, providers, and employers access and offer Child Care Benefits to their workforce. With a background in information systems and workforce innovation, he champions public-private solutions that improve access to affordable care and drive economic growth. Learn more at tootris.com.
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Tags: Income Taxes, Small Business
