Northern Mariana Islands (CNMI) Child Care Tax Incentives
Current for 2026 Tax Year • Last Updated: January 24, 2026
File with CNMI DRT (Not IRS!) + Check Your Tax Rebate Status First
🚨 CRITICAL: File with CNMI DRT, NOT the IRS!
CNMI corporations file Form 1120-CM with the CNMI Division of Revenue and Taxation (DRT)—not the IRS. The credit is claimed against your local CNMI tax liability (which mirrors the federal code).
Correct Filing: File Form 1120-CM with the CNMI Division of Revenue and Taxation. Attach Form 8882 to claim the credit.
The CNMI Mirror Code System
CNMI's tax code mirrors the US Internal Revenue Code, so Section 45F is available—but you file locally, not federally.
Claim 40-50% of qualified child care expenses, up to $600,000 annually—against your CNMI tax liability.
⚠️ THE TAX REBATE TRAP: Check Your Status First!
CNMI has a generous Tax Rebate system where up to 90% of income tax is often rebated back to corporations.
The Trap: If you receive a 90% rebate, your actual tax liability is very low. A non-refundable credit (like 45F) might be wasted if you have no tax to offset after the rebate.
The Advice: "Check your Rebate Status. If you already pay near-zero tax due to the Qualifying Certificate (QC) program or the Rebate, this credit may not help you. It is most effective for businesses that have a significant tax bill after rebates."
🏥 CNMI Success Story: Commonwealth Healthcare Corp (CHCC)
The hospital is the heartbeat of the island—and operates 24/7.
The CHCC Model: 24/7 Healthcare Operations
- The Context: Commonwealth Healthcare Corporation (CHCC) is the primary hospital serving Saipan and the CNMI
- The Problem: Nurses and doctors working night shifts have zero child care options on the island
- The Solution: CHCC can use the 45F credit to fund an on-site child care center or subsidize nanny networks for night shifts
- The 45F Angle: "CHCC proves that 24/7 operations require 24/7 care. Use the credit to subsidize 'Night Care' for your essential workers."
🎯 The Lesson for CNMI Employers
"Whether you're a hospital, hotel, or casino, shift work is the norm in CNMI. Use 45F to fund care solutions that match your operating hours. File Form 1120-CM with CNMI DRT—and make sure you have enough tax liability after rebates to use the credit!"
Example: Saipan Hotel (No QC/Rebate)
How a non-rebate hospitality employer can leverage the full 45F benefit.
| Component | Amount | Notes |
|---|---|---|
| Annual Child Care Investment | $100,000 | Extended-hours care, backup care |
| Section 45F Credit (50%) | -$50,000 | Filed on Form 1120-CM with DRT |
| Business Expense Deduction (~20%) | -$20,000 | Reduces CNMI taxable income |
| Your Net Cost | ~$30,000 | 70% savings! |
⚠️ QC/Rebate Beneficiary Example
If you have a Qualifying Certificate with 90% tax rebate, your effective tax rate is ~3.5%. On $100,000 of child care expenses, you might only have $3,500 in tax liability—meaning you can only use $3,500 of the $50,000 credit. Consult your tax counsel before planning around 45F.
CNMI Filing Instructions
📋 CNMI Division of Revenue & Taxation
This is where you file! Submit Form 1120-CM with Form 8882 attached to claim the 45F credit.
CNMI Dept of Finance →👶 Child Care Licensing
CNMI Dept of Community and Cultural Affairs (DCCA) handles child care licensing.
CNMI Government Portal →📄 Form 8882 Reference
Use the IRS Form 8882 as a reference—but attach it to your Form 1120-CM, not a federal return.
Form 8882 Instructions →💰 Tax Rebate/QC Status
Check your Qualifying Certificate or Rebate status before planning around 45F.
CNMI Child Care Landscape
Key CNMI Markets
Major employers leveraging child care strategies:
- Saipan (Garapan) – Hotels, casinos, tourism, retail
- Saipan (Capitol Hill) – Government, healthcare (CHCC)
- Saipan (Chalan Kanoa) – Commercial district, local services
- Tinian – Casino development, tourism
- Rota – Eco-tourism, local services
CNMI Child Care Tax Credit FAQ
Ready to Claim 45F in CNMI?
Use our calculator to estimate your savings, then file Form 1120-CM with CNMI DRT!