ERIC Number: ED472530
Record Type: Non-Journal
Publication Date: 2002-Nov
Reference Count: N/A
The Little Engine That Hasn't: The Poor Performance of Employer Tax Credits for Child Care.
FitzPatrick, Christina Smith; Campbell, Nancy Duff
An increasingly popular approach to addressing child care needs of Americas families is to give state tax credits to employers that provide child care assistance to their employees, thereby permitting the employer to offset part of its child care expenditures against its state tax liability. Currently, 28 states have such tax credits, and a federal tax credit becomes effective in the 2002 tax year. This report examines employer child care tax credits in 20 states, assesses the effect these credits have had, and analyzes the reasons for their lack of impact. Utilization data were collected from state departments of revenue. Interviews were conducted with national and state-level child care experts, tax policy specialists, and employers to determine why the credits have not been better used, to find additional research and data sources, and to learn about the history of tax credits at the state level. Following the report's introductory section, Section 2 describes employer child care tax credits and discusses variations in their size, scope, reach, and overall strength. Findings noted reveal that in 16 states, five or fewer corporations claimed the credit and in 5 states, no corporation claimed the credit. Section 3 analyzes possible reasons for the low utilization rates, including weakness of the credits and lack of corporate state tax liability. Section 4 examines the new federal tax credit and maintains that it is similar to state credits and could suffer from many of the same problems. Section 5 contends that encouraging private-sector child care investment may prove more effective than employer tax credits and describes alternative models in Colorado, Florida, and Oregon. The report's four appendices include the statutory citations, a summary of the provision of the 20 employer child care tax credits analyzed for the report, and lists of individuals providing information for the report. (Contains 145 footnotes.) (KB)
Descriptors: Child Care, Employer Supported Child Care, Federal Legislation, Investment, Models, Policy Analysis, Public Policy, State Programs, Tax Credits
National Women's Law Center, 11 DuPont Circle, N.W., Washington, DC 20036. Tel: 202-588-5180; Fax: 202-588-5185; Web site: http://www.nwlc.org.
Publication Type: Reports - Descriptive
Education Level: N/A
Sponsor: George Gund Foundation, Cleveland, OH.; A.L. Mailman Family Foundation, Inc.; David and Lucile Packard Foundation, Los Altos, CA.; Beatrice R. and Joseph A. Coleman Foundation, Inc., New York, NY.; Ford Foundation, New York, NY.; Ms. Foundation for Women, Inc., New York, NY.; Rockefeller Family Fund, Inc., New York, NY.
Authoring Institution: National Women's Law Center, Washington, DC.