Amid a childcare crisis impacting thousands of Sarasota-Manatee families and businesses, advocates are busy getting the word out about new state tax credits available to employers who help their workers with childcare.
The childcare tax credits bill was passed by the Legislature this session and signed into law by Gov. Ron DeSantis.
The law, which takes effect Oct. 1, allows employers to receive tax credits by either creating a childcare facility for their employees on-site or by subsidizing their workers’ childcare costs at eligible centers.
The start of the tax credits comes on the heels of the Sarasota County Commission slashing $510,000 in childcare support for hundreds of local working families.
Early Learning Coalition educating Sarasota businesses about childcare tax credits
To assist in getting the word out about the tax credits, the Early Learning Coalition of Sarasota County has been hosting informational sessions this summer with Florida Representative Fiona McFarland (R-Sarasota), whose proposals for the tax credits were ultimately wrapped into the bill that became law.
Though all are welcome, the information sessions are geared to area employers to help answer their questions about the tax credits and possibilities of partnering with childcare providers.
“We are here to support every business as they navigate this new space,” said Brigid Kolowith, ELC’s chief operating officer.
The next session is planned for Monday, Aug. 19 at 10:30 a.m. at the Venice Area Chamber of Commerce at 597 S. Tamiami Trail.
How the Florida childcare tax credits for businesses work
There are two ways for businesses to receive tax credits for helping their employees with childcare.
First, if a company provides on-site childcare for its employees it can get a tax credit equal to 50% of the startup costs of the facility, according to an analysis by The Children’s Movement of Florida.
The maximum amount employers can claim for startup credits depends on the size of their business: $1 million for those with 1-19 employees; $500,000 for those with 20 to 250 employees; and $250,000 for those with more than 250.
In addition, a tax credit would apply for each enrolled child or grandchild of an employee – up to $300 a month per child.
Alternatively, employers can receive tax credits for making payments to eligible childcare facilities on behalf of their employees’ children (or grandchildren).
Those tax credits would amount to up to $300 a month per child (a maximum of $3,600 per child each year).
The types of Florida taxes upon which these credits can be applied include corporate income taxes; excise taxes on liquor, wine, and malt beverages; gas and oil production taxes; insurance premium taxes; and use taxes due under a direct pay permit.
Employers can find applications through the Florida Department of Revenue starting in October.
The need for quality childcare costs parents
These tax credits are one of many new initiatives to address a childcare crisis that was already building when the pandemic put it in overdrive – forcing centers to close and legions of women to quit the workforce.
Many studies back up the urgency, revealing how a severe shortage in quality and affordable childcare and preschools impacts children, parents, their employers and the overall economy.
Yet the current national model for quality childcare makes its annual cost, for many parents, about as expensive as buying a brand new car every year, according to reports.
Providers struggle, as well, grappling with razor-thin profit margins in an industry highly regulated to protect small children. With steep capital costs for equipment, buildings, rent and mortgages, they face challenges in offering high enough salaries to attract sufficient numbers of teachers, exacerbating shortages of slots for kids.
Meanwhile, parents are living paycheck to paycheck in an overlapping housing crisis, Kolowith said. Many of the calls to the ELC are from parents forced to stay home because they can’t afford or find quality childcare and early learning centers.
Sarasota businesses report major childcare issues for their employees
The consequences are felt throughout the entire economy. Statewide, the impacts of childcare shortages cost employers $4.47 billion each year, according to studies by the Florida Chamber Foundation.
Closer to home, a survey conducted this spring by the ELC’s Childcare Business Task Force in collaboration with area chambers found that an overwhelming majority of employers reported major problems among employees in finding available and affordable childcare that affects their turnover, recruitment and profits.
The Florida childcare tax credits are a ‘win-win for everyone’
To have employer-assisted childcare onsite benefits parents, children and employers, said Kathy Lehner, president and CEO of the Venice Chamber.
“Talk about a way to retain their employees, and a way to bring more people into the workforce,” Lehner added of businesses and employees. What’s more, aside from financial assistance with childcare, working parents will see another advantage that is priceless.
“To have that benefit of knowing where their little one is – that they are right near them, and they can check on them – it’s a peace of mind that will make them an even better employee,” she said.
“This is totally a win-win for everyone.”
This story comes from a partnership between the Sarasota Herald-Tribune and the Community Foundation of Sarasota County. Saundra Amrhein covers the Season of Sharing campaign, along with issues surrounding housing, utilities, child care and transportation in the area. She can be reached at samrhein@gannett.com.
