The full $15 million reserved by the State of Nebraska for the refundable Child Care Tax Credit has been reserved within just seven weeks of the application period opening in January. Parents and legal guardians of young children have requested more than $19.3 million for the tax credit as of February 18, according to the Nebraska Department of Revenue, demonstrating the overwhelming demand for financial relief in covering child care expenses.
“This response underscores how important this tax credit is for Nebraska families, especially the working parents that employers in all sectors of business and industry depend on,” said Elizabeth Everett, deputy director of First Five Nebraska. “The rising cost of child care is a significant burden on parents who are struggling to provide for their families. The refundable Child Care Tax Credit offers an essential financial support that makes it easier for parents to stay in the workforce and contribute to our state’s economy while making sure their kids are receiving the quality care they need.”
Aimed at families with young children in child care
The refundable Child Care Tax Credit was created in 2023 as part of a larger package of child care-related tax credits introduced in the Unicameral by State Senator Eliot Bostar (Dist. 29). The package also included credits to incentivize private sector contributions to child care, encourage early childhood educators to build their careers in child care and help support quality improvement in child care programs serving families through the child care subsidy. The refundable Child Care Tax Credit was specifically targeted at families with young children in care and an annual household income of $150,000 or less. It offered qualifying parents and legal guardians $1,000 or $2,000 per child if those children were 5 years old or younger at the end of the 2024 tax year. The credit included special provisions for families at or below 100% of the Federal Poverty Level.
“No parent should have to ask themselves whether they can afford to start a family in Nebraska or stay in the workforce simply because of the high cost of child care,” said Senator Bostar. “Similarly, no community can afford to say child care makes it too expensive for hardworking Nebraskans to put down roots and grow their families and hometowns. The Child Care Tax Credit is a step in the right direction for our state, but it’s part of a longer journey ahead of us to make child care more affordable. Unfortunately, this isn’t a journey we can afford to make slowly. Families need help sooner rather than later, especially those who didn’t have the opportunity to benefit from the tax credit before the 2024 limit was reached. It’s up to those of us in public office to find ways to respond to that need. I’m looking forward to working with my colleagues in the Legislature to make the refundable Child Care Tax Credit program available to more Nebraskans as we move forward from here.”
Statewide public education effort
The success of the tax credit was due in part to a statewide public education effort led by First Five Nebraska alongside more than 30 partner organizations and initiatives that helped share information and offer application support to families. “We thank Senator Bostar for his leadership in making this opportunity possible for thousands of Nebraskan families,” said Everett. “And we especially commend the Tax Credit Alliance of Nebraska, the University of Nebraska Tax Institute, the Nebraska Chamber of Commerce & Industry, the Sixpence Early Learning Fund, Communities for Kids, Nebraska Appleseed and dozens of other partners who were instrumental in getting the word out in communities throughout the state.”
“The Tax Credit Alliance of Nebraska (TCAN) and UNL’s Center on Children Families and the Law was proud to have been involved in making sure many hardworking Nebraskans had access to the resources and assistance they needed to take advantage of this credit,” said Katharina Stokes, Project Director for TCAN at the University of Nebraska-Lincoln. “This credit is essential to help families alleviate the cost of child care. We look forward to continuing our work to promote the refundable Child Care Tax Credit when it renews for the 2025 tax year.”
The $15 million cap for this credit renews for 2025, with the next application period set to open in early 2026. First Five Nebraska urges parents to be prepared to take full advantage of this opportunity when the next round of applications becomes available. For additional information, visit NebraskaChildCareTaxCredit.org.
