Supporting Affordable Child Care for Employees
According to a Child Care Aware of America report about the price of child care throughout the United States , in 2017, the average annual cost of infant center-based care in Idaho was $7,296. That’s nearly $50 higher than the average annual cost of college tuition in Idaho. The average annual cost of center-based care for a 4 year-old was $6,300. Family child care homes in Idaho are somewhat less expensive, but not much. In 2017, the average annual cost of infant care in a family child care home was $6,264. The average annual cost of care for a 4 year-old in a family child care home was $5,676.
Employers can help make child care more affordable for families:
Federal Tax Relief:
- Offering on-site child care. Businesses can receive a federal tax credit equal to 25 percent of expenses for employee child care. The maximum credit allowed per year is capped at $150,000.
- Contracting for child care. Businesses can contract with a child care program to provide child care for their employees. Like on-site child care, the federal credit is limited to 25 percent of expenses and capped at $150,000.
- Helping families find child care. Businesses can receive a 10 percent federal tax credit for contracting with Child Care Resource and Referral Agencies like Idaho’s Child Care Resource Centers, to help families find child care within their budget.
- Offering Employees Tax-Free Payments for Child Care. Employers can set up Dependent Care Assistance Plans, which are flexible spending accounts, that enable employees to set aside up to $5,000 per year in pre-tax salary for child care expenses.
- Tell Your Employees about the Child and Dependent Care Tax Credit (CDCTC). When you send your employees their W-2 at tax time, remind them that if they have children for whom they pay for child care services, that they should claim the CDCTC. Let them know more information is available about the tax credit on the IRS child care web page.
For more information about child care tax incentives, see our tax summary for employers and tax summary for families.
Child Care Subsidies
Low wage earning families may be eligible for child care subsidies through the Idaho Child Care Program (ICCP), which is operated through the Idaho Department of Health and Welfare. Eligible families can earn up to about 130 percent of the federal poverty level and still potentially qualify for child care subsidies.
In 2019 in Idaho, qualifying families with annual income up to $21,408 for a family of two, $27,024 for a family of three, $32,640 for a family of four and $38,256 for a family of five may be eligible for a subsidy to help make child care more affordable. In 2018, an average of 8,619 children in Idaho each month received a subsidy to help pay for the cost of child care. Nearly 60 percent of the children whose care is paid for with a subsidy are under age five. More information about the Idaho Child Care Program, is located here.
Idaho's Strategy for Quality Child Care
Ask your employees to look for programs that participate in Idaho’s Steps to Quality Child Care Program, Idaho’s system to provide parents a way to differentiate among the quality of child care settings. It’s hard to find child care. It’s even harder to know how to compare child care programs and understand the quality of the settings. Idaho’s Steps to Quality system is designed to take the guess work out of looking for quality child care for parents.
- Employer Tax Incentives for Child Care Summary
- Employee Tax Incentives for Child Care Summary
- Employee Tips, Resources & Definitions Summary for Finding Quality Child Care
- Information about Idaho’s Steps to Quality child care programs
- Information about the Idaho Child Care Program (for child care financial assistance)
- The Business Case for Early Education Investments (One Pager)