Connecticut Child Care Tax Incentives
Current for 2026 Tax Year • Last Updated: January 24, 2026
Combine federal 45F credits with Connecticut's Human Capital Investment credit for a powerful ROI.
The 2026 Connecticut Reality
Connecticut's state-level child care tax credits are modest compared to other states. The real value comes from the federal Section 45F credit and the Tri-Share Pilot Program.
⚠️ Important Correction
Some sources incorrectly claim Connecticut offers a 25-60% employer child care credit. This is not accurate. The actual Human Capital Investment Tax Credit (CGS § 12-217x) provides only a 5% credit on child care subsidies for employees.
Claim a tax credit for 40% (Large Business) or 50% (Small Business) of qualified child care expenses, up to $600,000 annually.
Corporations can claim a credit of 5% of the amount spent on child care subsidies for employees (CGS § 12-217x).
💡 The Real Opportunity: Tri-Share Pilot Program
Connecticut has an active Tri-Share Child Care Pilot Program in Eastern Connecticut, run by the Office of Early Childhood. Under this program, child care costs are split:
- 1/3 Employer
- 1/3 Employee
- 1/3 State of Connecticut
This is arguably more valuable than the 5% tax credit for eligible employers in the pilot region.
💡 Connecticut Strategy
For most Connecticut employers, the federal 45F credit (40-50%) provides the bulk of the tax benefit. The state 5% credit adds a small additional savings. If you're in Eastern Connecticut, explore the Tri-Share Pilot for potentially greater cost reduction.
Connecticut-Specific Example: The "Insurance Capital" Scenario
An insurance company in Hartford with 350 employees provides child care subsidies to employees through a partnership with local licensed providers.
| Expense Category | Annual Investment | Federal 45F Credit | CT State Credit (5%) |
|---|---|---|---|
| Child Care Subsidies | $200,000 | $80,000 (40%) | $10,000 |
| Provider Contracts | $100,000 | $40,000 (40%) | $5,000 |
| Referral Services | $15,000 | $1,500 (10%) | $0 |
| Total | $315,000 | $121,500 | $15,000 |
🏦 The Connecticut Reality
Total Credits: $136,500 (43% of investment). The federal 45F credit provides the majority of savings ($121,500), while Connecticut's 5% credit adds a modest $15,000. This is still a solid ROI, but don't expect the 55%+ returns that some sources incorrectly advertise.
💡 Tri-Share Alternative (Eastern CT)
If this company were located in Eastern Connecticut and eligible for the Tri-Share Pilot, they could potentially reduce costs by 33% (state pays 1/3) in addition to claiming the federal 45F credit on their remaining 1/3 employer share. This could result in even greater savings than the tax credit approach.
Connecticut Compliance & Resources
📋 Licensing Requirements
All child care facilities must be licensed by the Connecticut Office of Early Childhood. This applies to both center-based and family child care homes.
CT Office of Early Childhood →💼 Human Capital Investment Tax Credit
This credit is part of Connecticut's broader business tax credits. It offers 25% for child care expenses and up to 60% for facility investments, capped at $50,000 annually.
CT DRS Information →📄 Required Federal Form
File IRS Form 8882 with your federal business tax return to claim the Section 45F credit. Consult with a tax professional to ensure proper application and compliance for both federal and state credits.
IRS Form 8882 →🤝 Local Support
Employers in Connecticut can use the 2-1-1 Child Care service to find and vet qualified providers across the state.
2-1-1 Child Care →Connecticut Child Care Landscape
Why Connecticut Employers Are Investing in Child Care
Connecticut's competitive business landscape, particularly in finance, insurance, and healthcare, makes employer-supported child care a key differentiator for attracting and retaining top talent. The ability to stack the state's Human Capital Investment Tax Credit with the federal 45F credit provides a strong financial case for making these investments.
Employers in these major Connecticut metros are leading the way in child care benefits:
- Hartford County – Insurance, healthcare, and aerospace
- Fairfield County – Financial services, hedge funds, and corporate headquarters
- New Haven County – Healthcare, education (Yale), and biotech
- Stamford-Norwalk Metro – Corporate HQs, finance, and technology
- Bridgeport – Healthcare, manufacturing, and professional services
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.
Connecticut Section 45F FAQ
The Human Capital Investment Tax Credit (CGS § 12-217x) provides a credit of 5% of the amount spent on child care subsidies for employees. Some sources incorrectly claim 25-60%—this is not accurate. The 5% credit is modest but can be stacked with the federal 45F credit.
The Tri-Share Child Care Pilot Program is an active program in Eastern Connecticut run by the Office of Early Childhood. Under this program, child care costs are split three ways: 1/3 Employer, 1/3 Employee, 1/3 State. This is often more valuable than the 5% tax credit for eligible employers in the pilot region.
Yes. You can apply the federal 45F credit (40-50%) to your qualified expenses, and then apply the Connecticut 5% credit to further reduce your tax liability. The federal credit provides the bulk of the savings.
Currently, the Tri-Share Pilot is only available in Eastern Connecticut. If you're located in Hartford, Fairfield, or New Haven counties, you would rely on the 5% tax credit plus the federal 45F credit. Check with the Connecticut Office of Early Childhood for updates on program expansion.
The Connecticut Office of Early Childhood maintains a list of licensed providers. You can also use the state's 2-1-1 Child Care service to find providers in your area.
Ready to Calculate Your Connecticut Savings?
Use our calculator to estimate your federal Section 45F credit. Select "Connecticut" in the state dropdown to see state-specific guidance.