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Employer Child Care Tax Credit

Investing in Child Care

The Iowa Employer Child Care Tax Credit encourages businesses to address talent recruitment and retention efforts through child care benefits. The program offsets the expenses related to the employer's child care services and projects.

The State of Iowa is authorized to award $2 million annually in tax credits, with a maximum of $150,000 in tax credits per employer.

Authorized expenditures include:

  • Acquisition, construction, rehabilitation or property expansion as part of a qualified child care 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.
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. Eligible employers must apply for the tax credit within 90 days of the tax year during which qualified expenditures are paid or incurred.

Qualifying employers are businesses in Iowa that are eligible for the federal tax credit for employer-provided child care expenditures. Businesses interested in the credit should discuss their eligibility with a qualified tax professional.

Applicants must:
  • Provide documentation of federal tax credit amount
  • Complete and submit a CPA examination, which must conclude that the qualified child care expenditures meet the requirements of Iowa Code section 237A.31 as amended by 2023 Iowa Acts Senate File 181 and 261 Iowa Administrative Code 261.57
The application will be available January 2024.

Applications will be submitted through
For more information, contact: