Help for Child Care Programs
Your child care program is a crucial asset in your community. That’s especially true for providers who put quality care within the reach of families and children in greatest need. The nonrefundable School Readiness Tax Credit encourages child care owners to keep growing the quality of their programs and improve the reach and impact of the child care subsidy.
Important Changes for the 2025 tax credit
- All applications for the nonrefundable School Readiness Tax Credit will be submitted electronically through the Nebraska Department of Labor's (NDOR) online eDASH system. This will simplify and improve the efficiency of the application review process. The eDASH portal for the nonrefundable tax credit will open in January 2026.
- Beginning in February 2026, the Nebraska Department of Health and Human Services (NDHHS) will issue a new, annual Explanation of Payments (EOP) report of child care subsidy claims reimbursed for each provider during the previous calendar year. Child care program owners can use either the new annual EOP report or their existing monthly EOP reports as supporting documentation for completing the nonrefundable School Readiness Tax Credit application.
- Who is this tax credit for?
- Which programs are eligible?
- What’s a non-refundable tax credit?
- How much is the non-refundable tax credit?
- Are eligible programs guaranteed a tax credit if they apply?
- When should programs apply for the non-refundable tax credit?
- Where can I find additional resources and information?
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Who is this tax credit for?
The nonrefundable School Readiness Tax Credit is available to qualifying owner-operators of child care programs including taxpaying individuals, partnerships, limited liability companies (LLCs), S-corporations and others. The program must have served children through the child care subsidy during 2025.
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Which programs are eligible?
Applicants may be eligible for the nonrefundable tax credit if:
1. The applicant’s program must be rated at Step 1 or above in Step Up to Quality
2. The applicant must have a child care subsidy contract with the state and have served subsidy-eligible children during 2025. -
What’s a non-refundable tax credit?
Nonrefundable tax credits are subtracted from the tax liability of a taxpaying individual or organization. If the amount of the tax credit is larger than the tax liability, the difference is not refunded to the taxpayer.
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How much is the non-refundable tax credit?
The size of the non-refundable School Readiness Tax Credit is based on:
1. The Step Up to Quality rating of the applicant’s program
2. The average monthly number of children the applicant’s program has served through the child care subsidy during 2025.
Example: An applicant whose program is rated at Step 3 and served an average of 5 children per month through the subsidy would be eligible for a nonrefundable credit of $4,000. (5 children x $800 = $4,000).
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Are eligible programs guaranteed a tax credit if they apply?
Last year, applications totaling nearly $11 million were submitted for the School Readiness Tax Credit (SRTC), far exceeding the $7.5 million available. The earlier you submit your tax credit application after the application window opens in January, the better your chances are of receiving the credit before the $7.5 million cap is reached—but unfortunately there is no guarantee.
When the annual cap for the SRTC is reached, the Nebraska Department of Revenue (NDOR) will not issue any more refundable or nonrefundable School Readiness Tax Credits until the following year. Applications are processed by NDOR strictly in the order in which they are received.
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When should programs apply for the non-refundable tax credit?
The online eDASH application portal will open on the Nebraska Department of Revenue's (NDOR) website in January. NDOR has not yet indicated specific deadlines, but we strongly recommend submitting your tax credit application as early as possible to maximize your chances of getting the credit before the $7.5 million cap is reached.
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Where can I find additional resources and information?
Nebraska Department of Revenue (NDOR)
-- 2024 School Readiness Tax Credit Application for Childcare and Education Provider Form
-- Instructions for completing and mailing your application
How to Apply
- GATHER INFORMATION: To successfully complete your nonrefundable School Readiness Tax Credit application, you must have access to either (1) your monthly Explanation of Payments (EOP) for the child care subsidy OR the new, annual EOP report that will be issued by NDHHS by February 1, 2026. You must also have information about each partner, shareholder or beneficiary of your program including their names, Social Security Numbers or Nebraska ID numbers, percentage share of income and amounts of the tax credit to be allocated to them.
- SUBMIT YOUR TAX CREDIT APPLICATION: Use the Nebraska Department of Revenue's online eDASH portal to submit your completed nonrefundable tax credit application. Upload any required documentation showing your program's subsidy reimbursements. Remember, it's likely that it won't take long to hit the $7.5 million cap on the School Readiness Tax Credit, so don't delay.
- CLAIM THE TAX CREDIT: Allow four weeks for NDOR to process your application. If your tax credit application is approved, you will receive a certification number and approved credit amount. Enter the certification number and total amount of the credit in the appropriate space on your 2025 state income tax return.
