Child Care Refundable Tax Credit
Neb. Rev. Stat. §§ 77-7201 to 77-7205 Child Care Tax Credit Act (Act)
*LB 754 (Sections 1 through 5, Operative for taxable years beginning on or after January 1, 2024.)
The Child Care Tax Credit Act established a refundable tax credit for parents and legal guardians for tax years beginning on or after January 1, 2024.
Parents or legal guardians can now submit the Child Care Refundable Tax Credit Application using the Nebraska Department of Revenue’s (DOR) Electronic Document & Application Submission Hub (eDASH). Applying for the refundable child care tax credit is fast, easy, and secure using the eDASH portal. Click the eDASH link below to apply. Parents and legal guardians must apply for the tax credit and receive approval confirmation from DOR prior to claiming the credit on their individual tax return.
(eDASH is now open for submission)
Information that parents and legal guardians will be required to provide when submitting the Child Care Refundable Tax Credit Application can be found here.
Parents or legal guardians of children 5 years old or younger may apply to DOR to receive a refundable tax credit if their total household income is $150,000 or less. To qualify, the child must be age 5 years or younger as of December 31 of the calendar year (i.e., under age 6) for which the tax credit is being requested and must be claimed by the parent or legal guardian as a dependent for federal income tax purposes. Example: Your child turned 6 on December 30, 2024, and is claimed as a dependent on your return. You cannot use the child to claim the child care refundable tax credit for 2024 because the child was not under age 6 at the end of 2024.
The parent or legal guardian is eligible for the refundable tax credit:
- If the child is enrolled in a child care program licensed pursuant to the Child Care Licensing Act; or
- If the child receives care from an approved license-exempt provider enrolled in the child care subsidy program pursuant to Neb. Rev. Stat. §§ 68-1202 and 68-1206; or
- If the parent’s or legal guardian’s total household income is less than or equal to 100% of the federal poverty level.
The credit will equal:
- $2,000 per child, if the total household income is no more than $75,000; or
- $1,000 per child, if the total household income is more than $75,000 but no more than $150,000.
If the total household income is more than $150,000, the parent or legal guardian is not eligible for the child care refundable tax credit.
Total household income means federal modified adjusted gross income.
The parent’s or legal guardian’s application and supporting documentation will be used to certify the refundable tax credit. The applications will be used to reserve the tax credits for the individual to claim on their Nebraska individual income tax return. The applications will be processed in the order received until the annual limit reaches $15 million. Use the eDASH link above to submit the Child Care Refundable Tax Credit Application.
***Reminder: The Form 7203 can be electronically submitted using the eDASH link above. This application method is fast, easy, and secure.***
