Back-up and On-site or Near-site Child Care

Demand for backup care is on the rise. Backup and emergency child care programs allow employees to continue working despite temporary disruptions in normal caregiving arrangements or when a child is mildly ill. Typically, employers contract with national or local child care or HR service provider to offer backup care services. Backup care can be offered at an employer’s worksite, in local child care facilities, or in an employee’s home.

Providing backup child care options benefits employers by:

• reducing employee absences and “fill-in” costs;
• increasing productivity;
• improving retention; and
• improving recruitment.

Just 7% of employers in PA have on-site child care, yet on-site or near-site child care can be one of the best ways to attract and retain talent. On-site or near-site child care is an employer-sponsored child care facility at or near the employee’s office. Employers typically contract with child care providers or operate an in-house team to provide the care.

On-site or near-site child care benefits employers by:

• improving retention and reducing turnover costs;
• improves employee performance; and
• reducing absenteeism.

 

There’s also a potential financial benefit. Employers with qualifying expenditures toward child care facilities, resources or referrals for the benefit of their employees may be eligible to claim the Credit for Employer-Provided Child Care Facilities and Services, which falls under the provisions of general business credit. The credit is 25% of the qualified child care facility expenditures plus 10% of the qualified child care resource and referral expenditures paid or incurred during the tax year. The credit is limited to $150,000 per tax year. You can claim the credit at any time within three years from the due date of your return.