Child Care Tax Credit

Child care credits range from 100 percent to 75 percent of costs. Employers who purchase or build qualified child care facilities are eligible to receive Georgia income tax credits equal to 100 percent of the cost of construction. Employers who provide or sponsor child care for employees are eligible for a credit against Georgia income tax equal to 75 percent of employers' direct costs.

The credits are available to all businesses in the state. The child care program must be licensed by the state.

All child care credits can be used against 50 percent of taxpayer's income tax liability in a given year. Unused child care credits from the purchase or construction of a child care facility can be carried forward three years. The credit for the cost of construction over 10 years [10 percent each year]. Credits that are related to the operating cost of the facility may be carried forward five years.

Example: Taxpayer has direct child care cost of $400,000 in a given year; and is eligible to receive $300,000 tax credit [75% x $400,000]. Taxpayer invests $1 million in a building for the childcare and is eligible for a credit in the first year of $100,000 [10% x $1 million]. Taxpayer can add the $300,000 tax credit and the $100,000 credit if the total credits do not exceed 50% of the tax liability in a given year.

2008 Job Tax Credit Map