Louisiana Child Care Tax Incentives
Current for 2026 Tax Year • Last Updated: January 24, 2026
Act 454 MASSIVE Expansion: 50% Credit + REFUNDABLE + $100k Caps!
🎉 ACT 454: Louisiana Just Got MUCH Better for 2026!
The 2025 Legislative Session passed Act 454, a massive expansion of Louisiana's employer child care credits effective January 1, 2026.
| What Changed | Old Law | New Law (2026) |
|---|---|---|
| Credit Name | School Readiness Tax Credit | Workforce Child Care Tax Credit |
| 5-Star Center Rate | 20% | 50% |
| 4-Star Center Rate | 15% | 40% |
| 3-Star Center Rate | 10% | 30% |
| Construction/Slots Cap | $50,000 | $100,000 |
| Per-Child Payment | $5,000 | $10,000 |
The 2026 Louisiana "Stack"
Louisiana employers can now achieve an incredible "Triple Win" by combining the expanded federal Section 45F credit with the state's new Workforce Child Care Tax Credit (Act 454).
Claim a tax credit for 40% (Large Business) or 50% (Small Business) of qualified child care expenses, up to $600,000 annually.
50% for 5-Star, 40% for 4-Star, 30% for 3-Star centers. Caps: $100k construction + $100k slots. REFUNDABLE!
🚨 CRITICAL: $1 Million Statewide Cap - First Come, First Served!
Act 454 places a $1 million statewide cap on these credits for 2026. The application period opens January 2027.
Warning: This is a tiny pot of money for the whole state. If you wait until April 15th, the money will likely be gone. Apply immediately when the window opens!
💰 REFUNDABLE = Cash Back!
Like Kansas, Louisiana's credits are REFUNDABLE. If your business owes $0 in taxes, Louisiana sends you a check. This is critical for startups, LLCs, and businesses with low tax liability!
💡 Louisiana Strategy: Quality Pays
The credit rate is tied to the quality rating of the provider. Partner with a 5-Star center to get the full 50% state credit. Combined with the 50% federal 45F credit for small businesses, you could see 100% of your investment returned as tax credits!
🎁 The "Easy $5k" - CCR&R Donation Credit
Louisiana has a hidden gem that most employers don't know about:
- What: Dollar-for-Dollar (100%) REFUNDABLE Tax Credit for donations to Child Care Resource & Referral (CCR&R) agencies
- Examples: Agenda for Children, Volunteers of America, local CCR&R agencies
- The Math: Donate $5,000 → Get $5,000 back from the state = $0 net cost
- The Benefit: Builds massive goodwill, supports child care infrastructure, costs you nothing
This is the easiest tax planning move in Louisiana.
Louisiana-Specific Example: The "Energy Corridor" Scenario
An energy services company in Baton Rouge with 250 employees partners with a 5-Star rated local child care center.
| Expense Category | Annual Investment | Federal 45F Credit (40%) | Louisiana State Credit (50%) |
|---|---|---|---|
| Contracted Slots (15 children @ 5-Star) | $180,000 | $72,000 | $90,000 (but capped at $100k) |
| On-site Backup Care Program | $40,000 | $16,000 | $20,000 |
| CCR&R Donation (100% credit!) | $5,000 | $0 | $5,000 (100% back!) |
| Total | $225,000 | $88,000 | $100,000 (capped) + $5,000 |
⚜️ The Louisiana Advantage
By stacking the credits, the company receives a total of $193,000 in tax credits on a $225,000 investment, reducing their net cost to just $32,000! And because Louisiana's credits are REFUNDABLE, even businesses with low tax liability get the full benefit.
Louisiana Compliance & Resources
📋 Licensing & Quality Ratings
All child care facilities must be licensed by the Louisiana Department of Education. The state's Quality Rating System determines your credit rate (3-Star = 30%, 4-Star = 40%, 5-Star = 50%).
LA Department of Education Licensing →💼 Workforce Child Care Tax Credit
The new credit (Act 454, effective 2026) replaces the old "School Readiness Tax Credit." File with Louisiana Department of Revenue. REFUNDABLE!
LA Department of Revenue →📄 Required Federal Form
File IRS Form 8882 with your federal business tax return to claim the Section 45F credit. Louisiana requires its own forms for the state credit.
IRS Form 8882 →🎁 CCR&R Donation Credit
Donate to Child Care Resource & Referral agencies for a 100% REFUNDABLE tax credit. Contact Agenda for Children or your local CCR&R.
Agenda for Children →Louisiana Child Care Landscape
Up from 20%! Partner with quality-rated centers to maximize your state credit.
Construction and slot purchase caps both doubled from $50k to $100k.
If you owe $0 in taxes, Louisiana sends you a check. Critical for startups!
Major Markets & Employer Impact
Key economic hubs like New Orleans, Baton Rouge, Shreveport, and Lafayette face significant child care challenges. With Act 454's massive expansion, Louisiana employers now have one of the best child care tax credit programs in the nation.
- New Orleans – Tourism, healthcare, port/logistics
- Baton Rouge – State government, petrochemical, education
- Shreveport-Bossier – Healthcare, gaming, military
- Lafayette – Oil & gas services, healthcare
- Lake Charles – LNG, petrochemical, manufacturing
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.
Child Care Marketplace Platforms
Technology platforms that connect employees with vetted, licensed child care providers. Expenses qualify under 45F.
Benefits Administration Services
Third-party administrators that manage employer child care benefits. Administrative fees are now 45F-eligible.
Resource & Referral Agencies
CCR&R agencies help employees find quality child care. Plus: Donations get 100% REFUNDABLE state credit!
Child Care Subsidy Programs
Employer-funded subsidy programs that offset employee child care costs. Fully eligible for the 40-50% federal credit.
Louisiana Section 45F FAQ
Ready to Calculate Your Louisiana Savings?
Use our calculator to estimate your federal Section 45F credit. Remember: Louisiana's Act 454 expansion makes 2026 the best year ever for employer child care investments!