School Readiness Tax Credit would recognize, support child care providers

by | May 3, 2023

School Readiness Tax Credit

LB754, the Child Care Tax Credit Act (formerly LB318), is on Select File, the second of three rounds of debate in the Nebraska Legislature. It includes a provision to reinstate the School Readiness Tax Credit Act, which would provide tax credits for eligible child care providers and programs.

The measure would provide refundable tax credits for child care employees or self-employed providers ranging from $2,300 to $3,500 to help them improve the quality of their programs and pursue professional development.

A nonrefundable credit would be available for programs that are rated at Step 1 or higher in Step Up to Quality and serve children and families through the child care subsidy.

The School Readiness Tax Credit was originally introduced in 2016 and ended with the 2021 tax year. We asked child care providers how receiving the tax credit contributed to their efforts to improve their program quality and why they support reinstating the tax credit program with passage of LB754.

Kim Chase

Kim Chase | Chase’s Child Care Corner | Papillion
Most early childhood education programs in Nebraska are not publicly funded programs—they are family child care homes or child care centers. As a licensed family child care home providing care and education to children from birth to age 5, I do not have the same benefits as my public school counterparts despite having the same college degree as many of them. I don’t have access to health insurance or retirement benefits or any of the other “perks” that come along with being employed by a school district or other public entity.

The School Readiness Tax Credit would help me feel like the work I am doing is appreciated and respected. It would allow me the opportunity to use those funds in an IRA, pay for health-related expenses or for capital improvements to my child care program. I think the tax credit would go a long way to equalize the early childhood profession while promoting quality at the same time!

Denita Julius

Denita Julius | Little Sprouts Child Care | Chadron
I was able to purchase more materials and furnishings for my program with this tax credit. As an early childhood educator, there’s little extra compensation for the long hours we put in, and most of us in the field are always pouring back into our programs.

This helps encourage growth in the profession by recognizing and providing compensation for education and quality. I also feel that the reimbursement for parents (also included in LB754) will help them out with the cost of child care at tax time.

Dayna Hamel

Dayna Hamel | Muddy Creek Daycare | Arapahoe
LB754 is important because it helps those who need it most. Families need child care to be able to contribute to the workforce, and those with lower income, but not “low enough,” have a hard time meeting the financial obligations of child care. Many must budget to be able to afford it to allow them to work. This bill would alleviate some of that burden on families.

Child care providers work long hours to provide the best care possible to the children entrusted to them. Many providers strive to exceed normal expectations by attending hundreds of hours of training each year, far surpassing the required 12 hours to maintain a Nebraska Department of Health and Human Services child care license. Many of those superstar child care providers are rated highly in Step Up to Quality, Nebraska’s quality rating system. Still more providers have obtained or are working on obtaining degrees and/or endorsements related to early childhood education and providing quality care. Passing this bill provides a financial incentive to continue providing quality child care and most definitely is a bonus to those who strive for excellence in the work they do.

Michelle Rasmussen | Lighthouse Preschool | LaVista 
The tax credit most importantly helps me feel appreciated and respected for choosing to dedicate my career to family child care. I have my degree in elementary education and early childhood education, and when my oldest child was born I decided to leave my teaching position to stay at home with my daughter and open a family child care program. My youngest went to kindergarten this year and I have fallen in love with family child care and have decided to make this my lifelong profession. The tax credit gives me a little token of appreciation for all the long hours and hard work I pour into my program to be able to provide a quality environment and program for children year-round. I feel recognized for everything I have done to achieve Step 5 with Step Up to Quality.

Learn more about the Child Care Tax Credit Act


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