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Access to affordable, quality child care is crucial for parents working to provide for their families’ basic needs and supply the labor requirements of Nebraska employers. As much as 74% of our state’s children under age 6 have all available parents in the workforce. As the costs of raising young children increase, so do the challenges facing child care providers struggling with low wages and the prohibitive cost of operating financially viable programs. Since 2019, Nebraska has seen a 12% decrease in licensed child care programs, while 30% of the total early childhood workforce turned over between 2022 and 2023. 

The new tax credits include: 

• Child Care Tax Credit – Refundable (CCTC-R): Helps offset some of the financial pressures on families with young children under age 5 by offering either a $1,000 or $2,000 credit per child depending on the family’s annual household income and other eligibility requirements.  

• Child Care Tax Credit – Nonrefundable (CCTC-NR): Encourages private sector contributions to help grow child care availability, especially in economically challenged areas. Taxpaying individuals or organizations can apply for a nonrefundable credit equal to either 75% or 100% of a qualifying contribution if the recipient of the contribution operates a child care program in a Nebraska Opportunity Zone or serves children on the Child Care Subsidy.  

• School Readiness Tax Credit – Refundable (SRTC-R): Offers a refundable tax credit between $2,300 and $3,500 to individual child care staff members or self-employed child care providers (such as licensed Family Child Care Home providers). Intended to encourage career development for child care professionals, the amount of the credit is based on professional classification criteria set by the Nebraska Department of Education. 

• School Readiness Tax Credit – Nonrefundable (SRTC-NR): This credit encourages providers to grow the quality and availability of child care programs serving families in greatest need. The amount of the credit, ranging between $400 and $1,200 per child, is determined by the program’s Step Up to Quality rating and the average monthly number of children enrolled in the Nebraska Child Care Subsidy program and served during the tax year.