LINCOLN — First Five Nebraska (FFN) today launched an educational campaign to promote child care and school readiness.

The refundable and non-refundable tax credits are designed to help address key challenges facing child care providers and the families, employers and communities that depend on them. They are the result of LB754, a bill introduced last year by Senator Eliot Bostar (District 29) and passed with significant bipartisan support. FFN worked closely with Senator Bostar to develop and advance the tax credit package, which will take effect in tax year 2024.

At a morning press conference, FFN Deputy Director Elizabeth Everett, Senator Bostar and Bryan Slone, President of the Nebraska Chamber of Commerce and Industry, joined together to discuss the rationale for the tax credits, how they work and the statewide messaging initiative currently underway.

Access to affordable, high-quality child care is critical for working parents to meet the basic needs of their families and the workforce needs of Nebraska employers. With 74% of children under 6 in our state, all available parents are working. As the costs of raising young children rise, so do the challenges for child care providers, who struggle with low wages and the prohibitive costs of operating financially viable programs. Since 2019, Nebraska has seen a 12% decline in licensed child care programs, while 30% of the total early childhood education workforce transitioned between 2022 and 2023.

The new tax credits include:

• Child Care Tax Credit (CCTC-R): Helps offset some of the financial pressure on families with young children under age five by providing a credit of $1,000 or $2,000 per child, depending on the family’s annual household income and other eligibility requirements.
• Child Care Tax Credit – Non-Refundable (CCTC-NR): Encourages private sector contributions to improve child care services, particularly in economically depressed areas. Taxpaying individuals or organizations may claim a non-refundable credit equal to 75% or 100% of a qualifying contribution if the recipient of the contribution operates a child care program in a Nebraska Opportunity Zone or provides child care with a child care subsidy.
• School Readiness Tax Credit-Refundable (SRTC-R): Provides a refundable tax credit of between $2,300 and $3,500 for individual child care center employees or self-employed child care providers (such as licensed family child care providers). The goal is to promote professional development for child care professionals. The amount of the credit is based on occupational classification criteria established by the Nebraska Department of Education.
• School Readiness Tax Credit-Nonrefundable (SRTC-NR): This credit encourages providers to improve the quality and availability of child care programs for families with the greatest need. The amount of the credit is based on the program’s Step Up to Quality rating and the average monthly number of children enrolled in the Nebraska Child Care Subsidy program and served during the tax year, and ranges from $400 to $1,200 per child.

Senator Bostar emphasized the importance of a robust child care industry to Nebraska’s strong economy. “We count on Nebraska’s working parents to build strong families, jobs and communities. And those parents count on Nebraska’s child care providers to have their backs,” he said. “The Child Care Tax Credit and the School Readiness Tax Credit can ease the financial burden on families with young children while helping to expand our state’s supply of high-quality child care and the skilled labor needed to provide it.”

Slone said the non-refundable tax credits provide businesses with an opportunity to make a difference in addressing challenges in their own communities. “Our members are committed to a collaborative effort to strengthen our state’s workforce, and these credits help businesses take a stronger role in supporting access to quality child care, a critical industry that maintains the productivity and employability of Nebraskans.”

First Five Nebraska has created separate websites for the Child Care Tax Credit (NebraskaChildCareTaxCredit.org) and the School Readiness Tax Credit (SchoolReadinessTaxCredit.org) that explain eligibility requirements and how to apply. The websites link directly to more information from the Nebraska Department of Education and to application forms and resources from the Nebraska Department of Revenue. Messaging partners can also access social media toolkits, fact sheets and other materials through a free print-on-demand service. Radio and television public service announcements will air statewide in November through the Nebraska Broadcasters Association’s Public Education Program (PEP) and through certain streaming services. All messaging resources will be available in English and Spanish.

While First Five Nebraska is co-coordinating the campaign with the Nebraska Children and Families Foundation, Everett stressed that a broad range of communications partners are needed, including nonprofits and service providers, community centers, schools, tax and accounting services, employers and chambers of commerce, community and economic development organizations, public libraries and other community entities.

“Creating the tax credits was just the first step,” Everett said. “Regardless of how desperately this assistance is needed in our state, its impact will depend entirely on how widely it is understood and used by those it is intended to help. We look forward to working with our partners to spread the message.”