Florida Extends Child Care Tax Credits Program

The Florida Department of Revenue recently issued Tax Information Publication 26ADM-04, announcing that Florida’s Child Care Tax Credits Program has been extended through state fiscal year 2027-28. The program provides tax incentives to employers that establish, operate, or financially support eligible child care facilities for employees. 

The extension was enacted through Section 34 of Chapter 2026-239, Laws of Florida, allowing eligible taxpayers to continue seeking tax credit allocations under the program. 

What Activities Qualify?

Florida’s Child Care Tax Credits Program is available to taxpayers that:

• Establish an eligible child care facility for employees;
• Operate an eligible child care facility for employees; or
• Make payments to an eligible child care facility in the name and for the benefit of an employee.

The program is intended to encourage employer investment in child care benefits while helping working families access child care services.

Taxes Eligible for the Credit

The credit may be applied against several Florida taxes, including:

• Corporate income tax;
• Excise tax on liquor, wine, and malt beverages;
• Gas and oil production tax, limited to 50% of the tax due on each return;
• Insurance premium tax; and
• Use tax due under a direct pay permit. 

Because the credit applies to multiple tax types, it may be relevant to a broad range of Florida businesses. 

Allocation Required Before Claiming the Credit

Taxpayers must obtain a tax credit allocation from the Florida Department of Revenue before earning the credit. The Department encourages applicants to use its online multi-tax credit application system, although certain taxpayers may still apply using Form DR556000.

Importantly, approval of a tax credit allocation does not automatically authorize a credit claim. Taxpayers must first incur qualifying startup costs, operate an eligible facility, or make qualifying payments before claiming a credit on a tax return. 

Additional Program Features

TIP 26ADM-04 highlights several administrative provisions that continue to apply under the program.

Unused credits may be carried forward for up to five years if they cannot be fully utilized in the year earned. Taxpayers may also rescind unused allocations, making those allocations available to other applicants. In addition, approved credits may be transferred to affiliated group members with Department approval. 

Why This Matters

Although the legislation does not significantly modify the existing credit structure, it preserves a tax incentive that may benefit employers providing child care assistance to employees. Businesses that currently participate in the program, or are considering employee child care initiatives, should evaluate whether available allocations may help offset qualifying costs. 

For employers already utilizing the program, the extension provides another year of potential tax benefits. For businesses exploring workforce support initiatives, the extension preserves an incentive that may help reduce the cost of providing eligible child care assistance.