Hawaii Child Care Tax Incentives
Current for 2026 Tax Year • Last Updated: January 24, 2026
Federal 45F benefits for Hawaii employers and proposed state-level credits.
The 2026 Hawaii "Stack"
For 2026, Hawaii employers can leverage the powerful federal Section 45F credit. Hawaii does not currently have a state employer credit, but understanding the local landscape is key to maximizing benefits.
Claim a tax credit for 40% (Large Business) or 50% (Small Business) of qualified child care expenses, up to $600,000 annually.
Hawaii does not currently offer a state-level employer child care tax credit. The state has focused on expanding family subsidies instead.
⚠️ Legislative Status (2026)
While various bills are introduced annually by the Keiki Caucus to create an employer credit, none have passed as of 2026. Instead, the state has focused on expanding the "Preschool Open Doors" (POD) subsidy for families.
🎓 Preschool Open Doors (POD) – The Employee Benefit
While not a tax credit for employers, Preschool Open Doors is Hawaii's main child care subsidy program for families. It helps eligible employees pay for preschool.
Employer Strategy: Inform your employees about POD eligibility. This costs you nothing but helps with retention by reducing their out-of-pocket child care costs.
🤝 PATCH Corporate Child Care Consultation
PATCH (People Attentive to Children) is Hawaii's designated Resource & Referral agency. They offer a specific "Corporate Child Care" consultation service to help Hawaii businesses set up child care programs. They are the boots-on-the-ground experts for the islands.
💡 Hawaii Strategy
Focus 100% on the federal Section 45F credit. Partner with PATCH for local expertise, and help employees access Preschool Open Doors subsidies to maximize the value of your child care benefit program.
Hawaii-Specific Example: The 'Aloha Hospitality' Scenario
A hotel group in Honolulu with 350 employees decides to offer child care benefits to attract and retain staff in the competitive hospitality market.
| Expense Category | Annual Investment | Federal 45F Credit (Federal Only) |
|---|---|---|
| Contracted Slots | $200,000 | $80,000 |
| Backup Care Program | $50,000 | $20,000 |
| Referral Services | $15,000 | $1,500 (10% rate) |
| Total | $265,000 | $101,500 |
🌴 The Hawaii Advantage
Since Hawaii does not currently have a state-level credit, the focus is on the federal 45F credit. The total federal credit of $101,500 provides a significant offset to the company's investment, making the child care benefit program much more affordable.
Hawaii Compliance & Resources
📋 Licensing Requirements
All child care facilities must be licensed by the Hawaii Department of Human Services. This applies to both center-based and family child care homes.
HI Child Care Program Office →🎓 Preschool Open Doors (POD)
Hawaii's main child care subsidy program for families. Help your employees check eligibility to reduce their out-of-pocket costs—at no cost to you.
Preschool Open Doors Info →📄 Required Federal Form
File IRS Form 8882 with your federal business tax return to claim the Section 45F credit. Consult with a tax professional for guidance on claiming the federal credit for your Hawaii business.
IRS Form 8882 →🤝 Local Support
Employers in Hawaii can partner with local agencies like PATCH to locate and vet qualified providers across the islands.
PATCH Hawaii →Hawaii Child Care Landscape
Why Hawaii Employers Should Invest in Child Care
With one of the highest costs of living in the nation, Hawaii's workforce is heavily impacted by child care expenses. By leveraging the federal 45F credit, employers can provide crucial support to their employees, improving retention and attracting new talent in a tight labor market.
Employers in these major Hawaii markets can make a significant impact by offering child care benefits:
- Oahu (Honolulu) – Tourism, military, and professional services
- Maui County – Tourism and hospitality
- Hawaii County (The Big Island) – Tourism, agriculture, and astronomy
- Kauai County – Tourism and agriculture
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.
Hawaii Section 45F FAQ
Ready to Calculate Your Hawaii Savings?
Use our free calculator to estimate your potential federal tax savings with Section 45F. See how providing child care benefits can impact your bottom line.