Maine Child Care Tax Incentives
Current for 2026 Tax Year • Last Updated: January 24, 2026
Federal Only State + Community Partnership Strategies
⚠️ Maine State Credits Were REPEALED in 2016
Maine used to have excellent child care tax credits, but they were sunsetted effective January 1, 2016.
| Former Credit | Statute | Status |
|---|---|---|
| Quality Child Care Investment Credit | § 5219-Q | REPEALED |
| Employer-Assisted Day Care Credit | § 2524 | REPEALED |
Note: LD 1555 was proposed in 2025 to create new employer child care credits, but has not been enacted as of January 2026.
The 2026 Maine Reality: Federal Only
Maine employers can still claim the powerful federal Section 45F credit. While there's no state credit to stack, the federal credit alone provides significant savings.
Claim a tax credit for 40% (Large Business) or 50% (Small Business) of qualified child care expenses, up to $600,000 annually.
Maine's state credits were repealed in 2016. Focus on maximizing the federal 45F credit and community partnerships.
💡 The Maine Strategy: Community Partnerships
Since there's no state tax credit, Maine employers must use other levers: community infrastructure investments and the CEI Child Care Business Lab. The federal 45F credit still covers 40-50% of your costs!
🔬 The "Jackson Laboratory" Model (Bar Harbor)
The Challenge: Maine is rural. Finding a provider is often harder than paying for one.
The Solution: The Jackson Laboratory (JAX) didn't just buy spots—they funded the construction of a new wing at the Mount Desert Island YMCA.
The Strategy: Instead of seeking a tax credit, JAX treated this as a capital investment in community infrastructure to ensure their scientists had a place to live and work.
"If you build it, they will come."
🏠 The CEI "Child Care Business Lab"
The Resource: Maine has a unique program called the Child Care Business Lab run by Coastal Enterprises, Inc. (CEI).
The Employer Angle: While this program is designed for providers, smart employers are sponsoring employees or spouses to go through this lab to open home-based daycares that serve the company's workforce.
💡 Pro Tip: Can't find care nearby? Sponsor a local entrepreneur to go through the CEI Child Care Business Lab and open a facility near your office.
Maine-Specific Example: The "Rural Employer" Scenario
A manufacturing company in Lewiston with 150 employees uses the federal 45F credit and community partnership strategies.
| Strategy | Annual Investment | Federal 45F Credit (40%) | Net Cost |
|---|---|---|---|
| Contracted Slots at Local Center (20 children) | $200,000 | $80,000 | $120,000 |
| CEI Business Lab Sponsorship (2 entrepreneurs) | $10,000 | $0 (not 45F eligible) | $10,000 |
| R&R Agency Contract (referral services) | $15,000 | $1,500 (10% rate) | $13,500 |
| Total | $225,000 | $81,500 | $143,500 |
🌲 The Maine Reality
Without a state credit, the federal 45F credit still provides $81,500 in savings on a $225,000 investment. The CEI sponsorship ($10,000) doesn't qualify for 45F but creates new child care supply in your community—a long-term workforce investment.
Maine Compliance & Resources
📋 Licensing Requirements
All child care facilities must be licensed by the Maine Department of Health and Human Services (DHHS), Office of Child and Family Services.
ME DHHS Child Care Licensing →🏠 CEI Child Care Business Lab
Coastal Enterprises, Inc. runs the Child Care Business Lab to help entrepreneurs start child care businesses. Sponsor an employee!
CEI Maine →📄 Required Federal Form
File IRS Form 8882 with your federal business tax return to claim the Section 45F credit. No state form needed (no state credit exists).
IRS Form 8882 →🤝 Maine Children's Alliance
Advocacy organization working to improve child care access in Maine. Stay informed about legislative efforts like LD 1555.
Maine Children's Alliance →Maine Child Care Landscape
Why Maine Employers Must Think Differently
Maine's rural nature means the challenge isn't just affording child care—it's finding it. The Jackson Lab model shows that sometimes the best investment is creating new supply, not just subsidizing existing spots.
- Portland – Healthcare, tourism, professional services (highest demand)
- Lewiston-Auburn – Healthcare, manufacturing
- Bangor – Healthcare, retail, education
- Bar Harbor / MDI – Research (Jackson Lab), tourism
- Augusta – State government, healthcare
Qualified Intermediary Platforms for 45F
Even without a state credit, Maine employers can maximize the federal 45F credit through intermediary platforms.
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
Community-based organizations that help employees find quality child care. Contracts qualify for the 10% referral credit.
Child Care Subsidy Programs
Employer-funded subsidy programs that offset employee child care costs. Fully eligible for the 40-50% federal credit.
Maine Section 45F FAQ
Ready to Calculate Your Maine Savings?
Use our calculator to estimate your federal Section 45F credit. Even without a state credit, Maine employers can still save up to $600,000 annually!