Kansas Child Care Tax Credit Aims to Support Working Families and Employers

Kansas is offering new incentives to help businesses support working parents through the state’s Child Day Care Assistance Credit. The refundable tax credit allows eligible taxpayers and corporations subject to Kansas corporate income tax to claim up to 50 percent of the federal child care credit beginning in tax year 2024 and beyond. State lawmakers designed the credit to encourage businesses to play a more active role in helping employees access reliable child care—an issue that has become increasingly important for workforce participation and economic growth. The credit specifically encourages companies to invest in child care solutions for their employees. Businesses may qualify by purchasing or providing child care services for employees’ children or by helping employees locate suitable child care providers. Companies that choose to directly provide child care facilities and equipment may receive substantial tax relief. However, the credit does have limits. For businesses establishing or supporting child care facilities, the maximum credit is capped at $45,000 in the first year. In subsequent taxable years, the credit can not exceed $30,000.Because the credit is refundable, qualifying businesses may still receive the benefit even if their tax liability is lower than the credit amount. Supporters say the program could help address two major challenges at once: improving access to child care and strengthening Kansas’ workforce. Child care availability is often cited as a barrier preventing many parents—especially mothers—from fully participating in the labor market. By incentivizing employers to help fill the gap, Kansas hopes to make it easier for families to remain in the workforce while ensuring children have access to safe and reliable care. The program is one of several initiatives aimed at making Kansas more attractive for businesses and workers alike, while also supporting families across the state.