Child Care Provider Tax Credit

R.S. 47:6105

Child care providers who own and operate a facility where care is given to foster children in the custody of the DCFS or to children who participate in the Child Care Assistance Program administered by the LDE are eligible for the refundable School Readiness Child Care Provider tax credit.

The tax credit is based on the average monthly number of children who attend the facility multiplied by the applicable credit amount based on the quality rating of the child care facility.

Percentage of Tax Credit per Elilgible Child from Child Care Facility Rating Quality Rating of Child Care Facility Tax Credit Per Eligible Child Five Star $1,500 Four Star $1,250 Three Star $1,000 Two Star $750 One Star or not participating in Quality Start 0

The LDE will provide certification by March 1 to qualifying child care providers regarding the average number of children participating in the program. The certificates must be retained in the Child Care Provider’s records and be available to LDR on request.

The credit can be taken against individual income tax, corporation income tax, or corporation franchise tax depending on the child care facility’s entity type as follows:

Individual income tax credit — If the child care facility is owned by a sole proprietor, or a flow-through entity such as a Limited Liability Company (LLC), Partnership, or Subchapter S corporation, the credit will be claimed on the Resident Individual Income Tax return, Form IT-540, Schedule F, or the Nonresident and Part-Year Resident Individual Income Tax Return, Form IT-540B, Schedule F-NR. Partners and shareholders should apportion the credit based on each partner's or shareholder’s percentage of ownership.

Corporation income or franchise tax credits — If the child care facility is owned by a corporation, the credit will be claimed on the Corporation Income and Franchise Tax Return, Form CIFT-620, Schedule RC.

Nonprofit Organizations — If the child care facility is owned by a nonprofit organization, the tax credit will be taken on the Corporation Income and Franchise Tax Return, Form CIFT-620, Schedule RC. Nonprofit organizations that are not registered with LDR because they are exempt from tax must register with LDR for corporation income tax and obtain a Louisiana revenue account number to be able to claim the credit.