Child care credits range from 75 percent to 100 percent of the employer's direct costs. These 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 to offset up to 50 percent of a taxpayer's income tax liability in a given year.

Credit for Purchasing or building a Child Care facility

Employers who purchase qualified child care property will receive a credit totaling 100% of the cost of such property. The credit is claimed at the rate of 10% a year for 10 years. Any

unused credit may be carried forward for three years. Recapture provisions apply if the property is transferred or committed to a use other than child care within 14 years after the property is placed in service. This credit should be claimed on Form IT-CCC100.

Credit for Providing or Sponsoring Child Care

Employers who provide or sponsor child care for employees are eligible for a tax credit of up to 75% of the employers’ direct costs. Any credit claimed but not used in any taxable year may be carried forward for five years from the close of the taxable year in which the cost of the operation was incurred. This credit should be claimed on Form IT-CCC75.

Example: A taxpayer has direct child care costs of $400,000 in a given year; and is eligible to receive $300,000 tax credit [75% x $400,000]. The 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]. The 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.

For more information, refer to O.C.G.A. §48-7-40.6.