Help for Child Care Programs
Your child care program is a crucial asset in your community. That’s especially true for providers who put quality care within the reach of families and children in greatest need. The nonrefundable School Readiness Tax Credit encourages child care owners to keep growing the quality of their programs and improve the reach and impact of the child care subsidy.
Who is this tax credit for?
The nonrefundable School Readiness Tax Credit is available to qualifying owner-operators of child care programs including taxpaying individuals, partnerships, limited liability companies (LLCs), S-corporations and others.
What’s a non-refundable tax credit?
Nonrefundable tax credits are subtracted from the tax liability of a taxpaying individual or organization. If the amount of the tax credit is larger than the tax liability, the difference is not refunded to the taxpayer.
Which programs are eligible?
Applicants may be eligible for the nonrefundable tax credit if:
- The applicant’s program must be rated at Step 1 or above in Step Up to Quality
- The applicant must have a child care subsidy contract with the state and have served subsidy-eligible children during the tax year.
How much is the non-refundable tax credit?
The size of the non-refundable School Readiness Tax Credit is based on:
- The Step Up to Quality rating of the applicant’s program
- The average monthly number of children the applicant’s program has served through the child care subsidy during the tax year.
| Program Step Up to Quality Rating | Tax Credit Amount (per monthly average number of children served through the subsidy) |
| 5 | $1,200 |
| 4 | $1,000 |
| 3 | $800 |
| 2 | $600 |
| 1 | $400 |
Example: An applicant whose program is rated at Step 3 and served an average of 5 children per month through the subsidy would be eligible for a nonrefundable credit of $4,000. (5 children x $800 = $4,000).
Are eligible programs guaranteed a tax credit if they apply?
The Nebraska Legislature has authorized a total of $7.5 million each year for the refundable and nonrefundable School Readiness Tax Credits combined. Once the total 7.5M limit is reached, no further refundable or nonrefundable School Readiness Tax Credits will be awarded until the following tax year. Please note that applications will be processed by the Nebraska Department of Revenue (NDOR) in the order in which they are received.
When should programs apply for the non-refundable tax credit?
Applications for the nonrefundable School Readiness Tax Credit must be submitted between January 1, 2025 (the close of the 2024 tax year) and March 1, 2025.
Where can I find additional resources and information?
Nebraska Department of Revenue (NDOR)
- 2024 School Readiness Tax Credit Application for Childcare and Education Provider Form
- Instructions for completing and mailing your application
How to Apply
- CALCULATE THE TAX CREDIT: Use the 2024 School Readiness Tax Credit Act – Application for Childcare and Education Provider form on the Nebraska Department of Revenue (NDOR) website to calculate the size of your tax credit. If your program has multiple partners, shareholders and beneficiaries, indicate how the credit will be distributed between them.
- MAIL YOUR TAX CREDIT APPLICATION: BY MARCH 1, 2025, mail the completed nonrefundable tax credit application and a copy of your program’s Step Up to Quality rating issued by NDE. Allow up to four (4) weeks for NDOR to process your application.
- CLAIM THE TAX CREDIT: Attach the tax credit certification you receive from NDOR when you file your 2024 state income tax return.
Help Get the Word Out
Want to make sure child care providers in your community are benefitting from the School Readiness Tax Credits? Find out how you or your organization can become a campaign messaging partner.
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