Alaska Child Care Tax Incentives
Current for 2026 Tax Year • Last Updated: January 24, 2026
Strategic 45F stacking for Alaska employers and Small Business Coalitions
The 2026 Alaska "Stack"
Alaska employers can achieve a "Double Win" by combining the expanded federal Section 45F credit with the state's own child care tax credit.
Claim a tax credit for 40% (Large Business) or 50% (Small Business) of qualified child care expenses, up to $600,000 annually.
SB189 (2024) and SB96 (2025) provide a tax credit for operating child care facilities, donations to nonprofits, or direct payments to employees, capped at $3M per employer.
💡 Alaska Strategy
Alaska's child care tax credit can be stacked with the federal 45F—but only for businesses that pay specific Alaska taxes. Most small businesses will only benefit from the federal credit. See critical caveats below.
⚠️ Critical: The "No Tax, No Credit" Problem
Alaska has no personal income tax. The Alaska Child Care Tax Credit can only be applied against these specific taxes:
- Corporate Income Tax
- Oil & Gas Production/Property Tax
- Mining License Tax
- Fisheries Business Tax
- Insurance Premium Tax
The "LLC Trap": Most small businesses in Alaska are LLCs, S-Corps, or Sole Proprietorships. These are "pass-through" entities that do not pay Corporate Income Tax. If you own a local bakery, tech startup, or retail shop organized as an LLC, you likely have $0 in eligible state tax liability. Since the credit is non-refundable, obtaining a $100,000 credit does nothing for you—you cannot use it.
SB 96 Update (June 2025): The original SB 189 primarily focused on contributions (donations). It was SB 96 (passed June 2025) that explicitly added "expenditures made to operate a child care facility" to the eligible list. Make sure to reference the updated statutes.
$3M Aggregate Cap: The $3 million cap is an aggregate cap across all Education Credits (including donations to universities). Large corporations already maxing out their Education Credits may have less room for child care credits than expected.
Alaska-Specific Example: The "Remote Workforce" Scenario
An oil and gas company in Anchorage with 250 employees establishes a new on-site child care facility to support its remote workforce.
| Expense Category | Annual Investment | Federal 45F Credit (40%) |
|---|---|---|
| On-site Facility Operation | $400,000 | $160,000 |
| Employee Child Care Vouchers | $100,000 | $40,000 |
| Referral Services | $20,000 | $2,000 (10% rate) |
| Total | $520,000 | $202,000 |
🏔️ The Alaska Advantage (For C-Corps)
This example works because oil and gas companies pay Corporate Income Tax and Oil & Gas Production Tax in Alaska. The company can claim the state credit against these tax liabilities. For C-Corps in eligible industries (oil/gas, mining, fishing, insurance, banking), the Alaska credit provides meaningful additional savings on top of the federal 45F.
🚫 For Most Small Businesses
If you're an LLC, S-Corp, or sole proprietorship (bakery, tech startup, retail shop, etc.), you likely pay $0 in eligible Alaska taxes. The Alaska state credit would be worthless to you. However, you can still claim the full federal Section 45F credit ($202,000 in this example) against your federal taxes.
Alaska Compliance & Resources
📋 Licensing Requirements
💼 Alaska Child Care Tax Credit (SB189/SB96)
SB189 (2024) and SB96 (2025) expanded the Education Tax Credit to include child care. Note: Only businesses paying Corporate Income Tax, Oil/Gas Tax, Mining Tax, Fisheries Tax, or Insurance Premium Tax can use this credit.
Alaska SB189 Details → Alaska SB96 (2025 Update) →📄 Required Federal Form
File IRS Form 8882 with your federal business tax return to claim the Section 45F credit. Alaska's SB189 credit is separate and should be claimed on the state tax return.
IRS Form 8882 →🤝 Local Support
Employers in Alaska can partner with thread, Alaska's Child Care Resource and Referral Network, to locate and vet qualified providers across the state.
thread Alaska →Alaska Child Care Landscape
Why Alaska Employers Are Investing in Child Care
In a state with a remote workforce and limited child care options, providing child care benefits is a critical strategy for attracting and retaining talent. The combination of federal and state credits makes this a financially viable option for many employers.
Employers in these major Alaska regions are leading the way in child care benefits:
- \n
- Anchorage – Oil, gas, and healthcare \n
- Fairbanks – Military, mining, and logistics \n
- Juneau – Government and tourism \n
- Kenai Peninsula – Fishing and oil \n
- Mat-Su Valley – Commuter community for Anchorage \n
Qualified Intermediary Platforms for 45F
Under the One Big Beautiful Bill Act (OBBBA) 2026 updates, employers can now claim Section 45F credits for expenses paid to qualified intermediary service providers. These platforms help connect employees with licensed child care and manage benefits administration.
Child Care Marketplace Platforms
Technology platforms that connect employees with vetted, licensed child care providers. Expenses for subscription fees, matching services, and provider network access qualify under 45F.
Benefits Administration Services
Third-party administrators that manage employer child care benefits, including enrollment, provider payments, and compliance reporting. Administrative fees are now 45F-eligible.
Resource & Referral Agencies
Community-based organizations that help employees find quality child care. Contracts with R&R agencies qualify for the 10% referral credit component.
Child Care Subsidy Programs
Employer-funded subsidy programs that offset employee child care costs. Direct subsidies to employees for licensed care are fully eligible for the 40-50% credit.
Alaska Section 45F FAQ
Ready to Calculate Your Alaska Savings?
Use our calculator to estimate your federal Section 45F credit and see how it stacks with Alaska's state credit.