North Dakota Child Care Tax Incentives
Current for 2026 Tax Year • Last Updated: January 24, 2026
The "3-Layer Stack" State: Federal + State Credit + WPCCR Cash Match = Up to 80-90% Off!
🏆 North Dakota: One of the Most Efficient Stacks in the Midwest!
North Dakota isn't just "Federal Only." It offers three distinct layers of funding that employers can stack to reduce costs by up to 80-90%!
The 2026 North Dakota "3-Layer Stack"
Stack all three layers for maximum savings!
Claim a tax credit for 40% (Large Business) or 50% (Small Business) of qualified child care expenses, up to $600,000 annually.
50% of the first $1,000 spent per employee. Max ~$500/employee.
⚠️ Non-refundable, NO carryforward!
State matches employer contributions for employees with children 0-36 months!
Pilot through Sept 2026
💡 The ND Strategy: Stack All Three Layers
Step 1: Enroll in WPCCR (state matches your contribution).
Step 2: Claim the ND Employer Credit (50% of first $1k/employee).
Step 3: Claim Federal 45F on your remaining employer portion.
Result: Up to 80-90% cost reduction!
🚀 Working Parents Child Care Relief (WPCCR)
The headline program for North Dakota employers! A state cash match for infant/toddler care.
How WPCCR Works
| Tier | Employer Pays | State Matches | Employee Gets |
|---|---|---|---|
| Tier 1 | $150/month | $150/month | $300/month |
| Tier 2 | $300/month | $300/month | $600/month |
👶 Eligibility
Employees with children 0-36 months old. The program targets the most expensive and hardest-to-find care (infants and toddlers).
⏰ Timeline
Pilot runs through September 2026 (or until funds run out). Act now!
💡 The WPCCR Strategy
"Don't pay $600 yourself. Pay $300, let the state pay the other $300, and then claim the Federal & State tax credits on your $300 portion!"
⚠️ The "Use It or Lose It" Warning: ND State Credit
The ND Employer Child Care Contribution Credit has a critical limitation you must understand.
🚨 NO Carryforward!
- Non-Refundable: If you don't owe state taxes, you get $0 from this credit
- No Carryforward: Unlike the Federal 45F (20-year carryforward), unused ND credit is lost forever
- Form: ND-1TC or Schedule ECC
✅ The Good News: WPCCR Still Works!
Even if you can't use the state tax credit (due to low tax liability), the WPCCR cash match still works! The state sends actual cash to match your contribution—no tax liability required.
💡 Strategy: Check Your Tax Liability First
"Before you budget for the ND state credit, check your state tax liability. If you don't owe state taxes, focus on WPCCR (cash match) + Federal 45F instead."
🏭 ND Success Story: Doosan Bobcat (Gwinner/Bismarck/Fargo)
The "Concierge" Model for Rural Manufacturing
The Challenge
Manufacturing shifts and rural locations (like Gwinner, ND—population ~700) make finding care nearly impossible. Standard "tuition assistance" doesn't help if there's no provider within 30 miles.
The Doosan Bobcat Solution
- Concierge Partner: They partnered with BenefitBump to help expectant parents navigate the logistics of finding care and managing leave
- Financial Assistance: Direct financial aid to offset costs
- Navigation Support: Helping employees find care before they need it—not after they're desperate
💡 The Lesson for ND Employers
"You don't need a factory in Gwinner to learn from Bobcat. They combine financial aid with navigation support (BenefitBump) to ensure their shift workers can actually show up to the line. Money alone doesn't solve rural child care—you need a concierge!"
North Dakota Example: The "3-Layer Stack" in Action
A manufacturing company in Fargo with 50 employees uses all three layers for infant/toddler care.
| Component | Per Employee/Year | 10 Employees with Infants |
|---|---|---|
| Total Cost of Care (Infant) | $12,000 | $120,000 |
| WPCCR State Match (Tier 2: $300/mo) | -$3,600 | -$36,000 |
| Employer Contribution (after WPCCR) | $3,600 | $36,000 |
| ND State Credit (50% of $1k cap) | -$500 | -$5,000 |
| Federal 45F Credit (50% of employer portion) | -$1,800 | -$18,000 |
| Net Employer Cost | $1,300 | $13,000 |
🌾 The North Dakota Advantage
The company provides $120,000 worth of infant care benefits for a net cost of just $13,000—that's only 11% of the total cost! The 3-Layer Stack makes premium child care affordable even for smaller manufacturers competing for talent against the oil patch.
🎁 Bonus ND Benefits
Additional incentives for North Dakota employers investing in child care.
🏠 Property Tax Exemption
Buildings used for child care can be exempt from local property taxes. Great for companies building on-site centers!
🏜️ "Desert" Grants
If you're in a Child Care Desert (like many oil patch counties), partner with a provider to apply for Grow Child Care Grants to build new capacity.
North Dakota Compliance & Resources
🚀 WPCCR Program
Apply for the Working Parents Child Care Relief cash match program.
ND DHS Child Care →📋 ND State Credit (Schedule ECC)
File Form ND-1TC or Schedule ECC to claim the 50% state credit (up to $500/employee).
ND Tax Department →🏛️ ND DHS (Licensing)
The Department of Human Services handles child care licensing in North Dakota.
ND Licensing →North Dakota Child Care Landscape
Federal + State + WPCCR!
State matches your contribution!
After all three layers.
Why ND Employers Are Using the 3-Layer Stack
North Dakota's combination of WPCCR cash match, state tax credit, and federal 45F creates one of the most efficient child care funding stacks in the Midwest. For manufacturers competing with the oil patch for workers, and rural employers struggling with child care deserts, this stack makes premium benefits affordable.
- Fargo – Tech, healthcare, education, manufacturing
- Bismarck – Government, healthcare, energy
- Grand Forks – Education, aerospace, healthcare
- Minot – Military (Minot AFB), healthcare, energy
- Williston/Bakken – Oil & gas, energy services
- Gwinner/Rural – Manufacturing (Doosan Bobcat), 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.
BenefitBump (Concierge)
The platform Doosan Bobcat uses! Helps expectant parents navigate finding care and managing leave. Great for rural employers.
Child Care Marketplace Platforms
Technology platforms that connect employees with vetted, licensed child care providers. Subscription fees qualify under 45F.
Benefits Administration Services
Third-party administrators that manage employer child care benefits, including enrollment, provider payments, and compliance reporting.
Resource & Referral Agencies
Community-based organizations that help employees find quality child care. Contracts with R&R agencies qualify for the 10% referral credit.
North Dakota Child Care Tax Credit FAQ
North Dakota offers three distinct layers of funding: 1) Federal 45F Credit (40-50%), 2) ND Employer Contribution Credit (50% of first $1,000/employee), and 3) Working Parents Child Care Relief (WPCCR) cash match. Combined, these can reduce costs by 80-90%!
WPCCR is a state cash match program for employees with children 0-36 months. Tier 1: Employer pays $150/month, state matches $150. Tier 2: Employer pays $300/month, state matches $300. The pilot runs through September 2026.
No! The ND Employer Child Care Contribution Credit is non-refundable with NO carryforward. This is a "Use it or Lose it" credit. Check your state tax liability before budgeting. However, the WPCCR cash match still works regardless of tax liability!
Doosan Bobcat uses a "Concierge" model: They partner with BenefitBump to help expectant parents navigate finding care and managing leave, combined with direct financial assistance. This solves the rural/shift-work challenge in places like Gwinner, ND.
If you're in a Child Care Desert (like many oil patch counties), partner with a provider to apply for Grow Child Care Grants to build new capacity. Also consider the property tax exemption for buildings used for child care.
Calculate Your Potential ND Savings
Use our free calculator to estimate your potential federal 45F tax savings. Remember: ND has a 3-Layer Stack!
Calculate Now