Michigan Child Care Tax Incentives
Current for 2026 Tax Year • Last Updated: January 24, 2026
Federal 45F + MI Tri-Share (33/33/33 Cost Split) = Powerful Combination!
📋 Michigan: A "Cost-Sharing" State, NOT a "Tax Credit" State
Michigan does NOT have a state employer child care tax credit. Instead, it has the MI Tri-Share model.
The Split: Cost is divided equally: 33% Employer + 33% Employee + 33% State
The 2026 Michigan Strategy
Michigan employers combine the federal Section 45F credit with the MI Tri-Share cost-sharing model for maximum impact.
Claim a tax credit on your 33% employer contribution. Your net cost drops to ~17%!
State pays 33%, Employee pays 33%, You pay 33%. Then claim 45F on your share!
🆕 2026 Update: MI Care-Share Expansion!
Old Rule (Tri-Share): Limited to ALICE population (income-capped, 200-325% FPL).
New Rule (Care-Share): Employers can now offer the benefit to ALL employees!
Higher Earner Split: For employees above income limits: 33% Employer + 67% Employee (no state contribution), but the infrastructure is still managed by state hubs.
⚠️ You MUST Join a Hub!
Michigan is divided into regional Tri-Share Hubs. Employers cannot apply directly to the state—you must join a Hub.
Find Your Hub: trisharechildcare.com/states/michigan →
💡 Michigan Strategy Summary
Michigan employers should: (1) Join their regional Tri-Share Hub, (2) Enroll qualifying employees in Tri-Share (33/33/33 split), (3) Use Care-Share for higher earners, and (4) Claim the federal 45F credit on your employer contribution to reduce net cost to ~17%!
🧪 Michigan Success Story: Dow's "Total Rewards" Model
Dow (headquartered in Midland, MI) proves that you don't need to be in the child care business to solve the child care crisis. Instead of building and managing centers at every location, Dow deployed a flexible, tech-enabled strategy that scales across their diverse workforce.
| Dow Strategy Component | What They Do | 45F Eligible? |
|---|---|---|
| Direct Financial Support | $1,500 contribution to employee Dependent Care FSA | ✓ Yes (Subsidy) |
| Tech-Enabled Access | Partnership with TOOTRiS for real-time provider network access | ✓ Yes (Platform) |
| Backup Care | ~$10/day center-based, ~$4/hour in-home backup care | ✓ Yes (Care Expense) |
💡 The 45F Application
By treating these subsidies and platform fees as "Qualified Child Care Expenditures," Dow can claim the Federal 45F Tax Credit to offset the cost of the program. Michigan employers can replicate this "Subsidy + Search" model to get a tax write-off (Federal) while solving the access problem (Local).
Michigan-Specific Example: The "Manufacturing + Tri-Share" Scenario
A manufacturing company in Grand Rapids with 150 employees enrolls 10 employees in the MI Tri-Share Program.
| Cost Component | Amount | Who Pays |
|---|---|---|
| Total Child Care Cost (10 employees) | $120,000 | — |
| State Share (33%) | $40,000 | Michigan |
| Employee Share (33%) | $40,000 | Employees |
| Employer Share (33%) | $40,000 | You |
| Federal 45F Credit (50% of $40k) | -$20,000 | Tax Refund! |
| Your Net Cost | $20,000 | ~17% of total! |
🧤 The Mitten State Advantage
By combining Tri-Share (33% state match) with the federal 45F credit (50% of your share), your net cost drops to just 17% of total child care costs! You provide $120,000 in child care benefits for just $20,000 out of pocket.
Michigan Compliance & Resources
🤝 MI Tri-Share Hubs
You MUST connect with your regional hub to participate. Employers cannot apply directly to the state.
Find Your Tri-Share Hub →📋 Licensing Requirements
Child care providers must be licensed by Michigan LARA (Licensing and Regulatory Affairs).
MI Child Care Licensing →📄 Required Federal Form
File IRS Form 8882 with your federal business tax return to claim the Section 45F credit on your employer contribution.
IRS Form 8882 →🆕 MI Care-Share Info
Learn about the 2026 expansion that allows all employees to participate (not just ALICE population).
MI Care-Share Details →Michigan Child Care Landscape
Tri-Share helps solve access, not just affordability.
Tri-Share cuts this to ~$3,700 for employee!
Free money from Michigan for qualifying employees.
Why Michigan's Cost-Sharing Model Works
Michigan's tight labor market, particularly in manufacturing and healthcare, makes child care a critical benefit for attracting and retaining skilled workers. The Tri-Share model is unique because it shares the burden three ways—no one party bears the full cost.
- Metro Detroit – Automotive, manufacturing, technology
- Grand Rapids – Furniture manufacturing, healthcare, life sciences
- Midland – Dow headquarters, chemical industry
- Ann Arbor – Tech, research, education
- Lansing – Government, education, healthcare
- Kalamazoo – Life sciences, manufacturing
Qualified Intermediary Platforms for 45F
Michigan employers can maximize the federal 45F credit through intermediary platforms—just like Dow does with TOOTRiS!
Child Care Marketplace Platforms
Tech platforms like TOOTRiS connect employees with vetted, licensed providers. Platform fees qualify under 45F.
Benefits Administration Services
Third-party administrators that manage employer child care benefits. Administrative fees are 45F-eligible.
Tri-Share Hub Administration
Your regional hub manages the program. Your employer contribution qualifies for the 45F credit.
Backup Care Programs
Subsidized backup care (like Dow's $10/day program) is fully eligible for the 40-50% federal credit.
Michigan Section 45F FAQ
Ready to Calculate Your Michigan Savings?
Use our calculator to estimate your federal Section 45F credit. Then connect with your Tri-Share Hub for even bigger savings!