Big News for Employers: Enhanced Child Care Tax Credit Under the One Big Beautiful Bill Act
- Bruce & Company, PSC
- Sep 19
- 1 min read
The recently passed One Big Beautiful Bill Act (OBBBA) brings a significant boost to the employer-provided child care tax credit, making it more valuable for businesses that support employees with child care benefits.
What’s Changing?
For eligible amounts paid or incurred after December 31, 2025:
The credit increases from 25% to 40% of qualified expenditures.
The maximum dollar amount rises from $150,000 to $500,000.
For qualifying small businesses, the credit jumps to 50% with a maximum of $600,000.
The OBBBA also permits eligible small businesses to pool resources to provide child care to employees and still claim the credit.
Why It Matters
Sponsoring child care can improve employee retention, satisfaction, and productivity. While the credit makes it more financially feasible, offering child care remains a complex decision involving logistics, costs, and planning.
Need Guidance?
Our team can help you navigate the rules, evaluate your options, and determine how your business can maximize this enhanced tax credit. Contact us to learn more and plan ahead for 2026.
About Bruce & Company, P.S.C.
Founded in 1976 by Gregory T. Bruce, Bruce & Company, P.S.C. is a full-service accounting firm proudly serving clients regionally, nationally, and globally, with our central office located in Madisonville, KY. For more than four decades, we’ve delivered trusted expertise in tax, financial planning, and auditing. Our knowledgeable team is dedicated to providing personalized service and practical solutions to help individuals and businesses achieve their financial goals. Contact us to learn more about how we can support you!
