Child Care Tax Credit FAQs
A parent or legal guardian qualifies for the Child Care Refundable Tax Credit if all the following are met:
- The parent or legal guardian has a child who is five years old or younger as of December 31 of the calendar year (i.e., under age 6) for which the tax credit is being requested and the child will be claimed by the parent or legal guardian as a dependent for federal income tax purposes;
- The parent’s or legal guardian’s total household income is equal to or less than $150,000; and
- One of the following applies:
- The child is enrolled in a childcare program licensed through the Child Care Licensing Act;
- The child received care from an approved license-exempt provider enrolled in the childcare subsidy program under Neb. Rev. Stat. § 68-1202 and 68-1206; or
- The parent or legal guardian’s total household income is less than or equal to 100% of the federal poverty level.
If the foster parent claims the foster child for federal income tax purposes, they may qualify for the tax credit.
The foster child and foster parent must meet all other qualifications for the tax credit with regard to the child's age, the foster parent's total household income, and the enrollment of the child in a qualified child care program if applicable.
The dependent 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.
No. If you do not have the adjusted gross income from your federal return, you may use the Child Care Refundable Tax Credit Total Household Income Calculation worksheet to estimate your total household income for the Child Care Refundable Tax Credit Application, Form 7203.
NOTE: Any approved, reserved credit amount may be reduced or disallowed if the total household income information provided in the application the does not match the actual information reported on your income tax return when claiming the credit.
The applicant’s total household income must be equal to or less than $150,000 for the tax year for which the credit is being requested.
If approved, the reserved 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.
The amount of the reserved credit is limited to the amount indicated in the Estimated Credit Authorization section of the approved Form 7203 and may be reduced or disallowed based on the actual amounts and information reported on the Nebraska individual income tax return.
The amount of the reserved credit is limited to the amount indicated in the Estimated Credit Authorization section of your approved Form 7203 and may be reduced or disallowed based on the actual amounts and information reported on your Nebraska individual income tax return. Do not submit an additional Form 7203 to adjust the estimated total household income reported on your original Form 7203 application unless the change would result in eligibility of an increased credit amount.
For example, the original Form 7203 indicated $75,250 for total household income but upon further review you determine the total is only $74,000. This change in total household income could increase the total credit amount available per child from $1,000 to $2,000 if credits are still available to reserve. However, if the annual limit has been reached, additional credits cannot be approved and only the original approved credit amount could be claimed.
Yes.
No. Parents and legal guardians who qualify for the tax credit must submit the Child Care Refundable Tax Credit Application, Form 7203, to the Nebraska Department of Revenue (DOR) and receive confirmation of approval prior to claiming the tax credit on their Nebraska individual income tax return.
Apply for Child Care Refundable Tax Credit Application, Form 7203, electronically using DOR’s Electronic Document and Submission Hub (eDASH).
Yes. If a person (submitter) other than the applicant is submitting Form 7203 in eDASH on behalf of the applicant, they must indicate this when prompted in eDASH. This includes unpaid preparers and family members submitting on behalf of the applicant.
When a submitter starts the application in eDASH, they will be asked "Are you submitting this application for yourself or on behalf of the applicant?" After selecting "on behalf of the applicant", the submitter will be required to certify that the applicant has authorized them to submit the application. The submitter will then be prompted to enter their own name and phone number.
When the submitter reaches the application page titled "Parent's or Legal Guardian's Name and Address", they will enter the relevant information for the taxpayer who is applying to reserve and claim the credit.
No. The Form 7203 allows for up to 10 dependent children per application submission. If you claim more than 10 qualifying, dependent children, you will need to submit an additional Form 7203. Note: The parent or legal guardian must claim the dependent child on their federal income tax return in order to claim the child for this tax credit.
The applications are used to reserve the tax credits for the individual to claim on their Nebraska individual income tax return. If the tax credit is approved, the applicant will receive confirmation from the Nebraska Department of Revenue (DOR) that their Child Care Refundable Tax Credit Application, Form 7203, has been approved and certified.
To claim the credit, you must complete the applicable line on your Nebraska individual income tax return. You will need the Certification Number and Reserved Credit Amount from the Estimated Credit Authorization section of your approved Form 7203 when claiming the credit on your Nebraska individual income tax return.
Yes. Applications can be approved under the Act until the total amount of credits approved for the tax year reaches $15 million. The applications will be processed in the order received.
The total annual statutory limit is $15 million. DOR must consider applications in the order received and may approve tax credits for the tax year until the total amount of credits approved reaches the annual statutory limit.
Applications that are received on the date the total annual statutory limit is reached will be approved for a prorated tax credit based on the total amount remaining and the total amount of credit requests received that day.
All completed applications received on the same calendar date will be considered equally towards the annual limit regardless of the time the application was submitted on that date. Application submissions are date and time stamped using Central Time zone. An application will be considered complete when all the information requested for the application has been submitted in eDASH.
Applications received from parents or legal guardians who are eligible for the tax credit and apply after the statutory limit is reached will be held. Parents or legal guardians will receive an email notification from the eDASH system indicating that their credit request has not been approved due to the total annual statutory limit being reached. DOR will contact these taxpayers if funds become available.
No, only the parent or legal guardian that is claiming the child as a dependent on their federal income tax return can claim the Nebraska tax credit.
Once the credit has been reserved, the taxpayer must file their income tax return within the statute of limitations, generally three years from the due date of the return, in order to claim the credit.
Yes. The program qualifies if the dependent child was enrolled in a preschool, nursery or school-age child care program that is not required to be licensed under the Child Care Licensing Act because the program is operated or contracted by a public school district and subject to the rules and regulations of the Nebraska Department of Education pursuant to Neb. Rev. Stat. § § 71-1910 and 71-1916(4).
In eDASH select the option “A program operated or contracted by a public school district and subject to the rules and regulations of the Nebraska Department of Education pursuant to Neb. Rev. Stat §§ 71-1910 and 71-1916(4)” for the applicable child when prompted. Then, select the public school district program name from the drop-down list provided.
In eDASH select the option “A child care program or provider licensed by the Department of Health and Human Services (DHHS)” for the applicable child when prompted. Then, select the child care program or provide name from the drop-down list provided.”
In eDASH select the option “An approved license-exempt provider through the child care subsidy program pursuant to Neb. Rev. Stat. §§ 68-1202 and 68-1206” for the applicable child when prompted. Then, enter the provider name and authorization number as they appear on the last DHHS Authorization Notice received for the tax year for which you are applying for the credit. You must upload a copy of the front page of the DHHS Authorization Notice which is available in the parent's or legal guardian's ACCESSNebraska or iServe Nebraska account. If more than one dependent child is included in the authorization, you only need to upload one copy of the authorization.
Yes, an SSN or ITIN are both acceptable for parents or legal guardians to use when applying for the tax credit.
Yes.
