School Readiness Tax Credit for Childcare and Education Provider (Nonrefundable Tax Credit)
The Nebraska Department of Revenue (DOR) will begin accepting applications for the School Readiness Refundable Tax Credit for Staff Members and the School Readiness Nonrefundable Tax Credit for Childcare and Education Providers in DOR’s Electronic Document & Application Submission Hub (eDASH) beginning February 2, 2026, at 8:30 a.m. Central Time for tax year 2025. Applications will only be accepted through eDASH. DOR will provide an email update if the opening date changes.
The DOR will process completed applications in the order received until the annual limit has been reached. 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 for the School Readiness Tax Credit for Childcare and Education Provider will be submitted electronically through the Electronic Document & Application Submission Hub (eDASH).
Neb. Rev. Stat. §§ 77-3601 to 77-3607
The School Readiness Tax Credit Act, as amended by LB 754 (2023), provides two separate income tax credits beginning with tax year 2024 that require taxpayers to submit an application to DOR. A nonrefundable provider credit as listed below and a refundable staff member income tax credit.
Credit for an Eligible Program. A nonrefundable income tax credit is available to individuals, partnerships, limited liability companies (LLCs), S corporations, corporations, or fiduciaries who owned or operated an eligible childcare and education program that served children who participated in the childcare subsidy program established in Neb. Rev. Stat. § 68-1202. The tax credit to the provider is equal to the average monthly number of children, age 5 or under, who participated in the childcare subsidy program and who attended the provider’s program, multiplied by a dollar amount based on the quality scale rating of the eligible program. Steps One through Five qualify for the credit:
A) $400 for a Step One program;
B) $600 for a Step Two program;
C) $800 for a Step Three program;
D) $1,000 for a Step Four program; and
E) $1,200 for a Step Five program.
Applications will be submitted using DOR’s eDASH. Each year the DOR will publish the application submission date on the DOR’s website. The application must be properly filled out and supported to be considered a complete application. The Form SR-3604 requires the provider to enter their information from the Nebraska Department of Health and Human Services (NDHHS) Tax Credit Report (Report) for children younger than six years of age. The NDHHS Report includes a Provider Number assigned by NDHHS and provides a year end summary of the subsidized child care days and partial days for each month. The entered information must match the information from the NDHHS Report.
To claim or distribute this tax credit, a completed application must be submitted to the DOR with the required information. Partnerships, LLCs, S corporations, and fiduciaries may distribute the approved tax credit by completing the Schedule K-1N for each partner, shareholder, member, or beneficiary with the certificate number and amount of the distributed credit. If the tax credit was received from a distributing entity, enter the certificate number and credit amount from the Schedule K-1N and attach the Schedule K-1N to your income tax return.
DOR will process the staff member and provider applications in the order received. The tax credit may only be claimed after your application has been approved in writing by DOR. Please allow four weeks for DOR to process and respond to your application.
The total amount of tax credits available is shared by the staff member and provider programs and limited to $7.5 million per tax year.
For the 2025 tax year, the School Readiness Tax Credit for Childcare and Education Providers will apply using the eDASH portal. When the eDASH portal is open, you can apply by clicking the eDASH link below. The eDASH system is fast, easy, and secure.
DOR will open beginning February 2, 2026, at 8:30 a.m. Central Time for tax year 2025. DOR will provide an email update if the opening date changes to GovDelivery subscribers.
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