The 2026 Texas Strategy
Texas has no state income tax, so there's no "state tax credit" to claim. But Prop 2 (SB 1145) offers something potentially more valuable: a 100% property tax exemption for child care facilities!
Claim a tax credit for 40% (Large Business) or 50% (Small Business) of qualified child care expenses, up to $600,000 annually.
Cities/counties can exempt child care facilities from property taxes FOREVER. Petition your local government!
🏠 The "Big Win": Prop 2 / SB 1145 (100% Property Tax Exemption)
This is the single most important piece of legislation for Texas employers building on-site centers!
- The Law: Passed in 2023/2024, allows cities and counties to grant a 100% property tax exemption for child care facilities
- The Stack: Federal 45F (40-50% of construction) + 100% local property tax exemption = massive savings
- The Action: You must petition your local county/city to adopt this exemption if they haven't already
⚠️ The "20% Rule": The exemption is not automatic—it's "Quality-Linked." To qualify, the facility must participate in the Texas Rising Star (TRS) quality rating system AND maintain a minimum of 20% enrollment of children receiving TWC subsidies. Work with a TRS-certified provider to avoid accidentally forfeiting the property tax break.
📞 Texas Rule #1: Call Your LOCAL Workforce Solutions Board
Don't call Austin—call your local board! Texas has 28 local Workforce Solutions boards that hold the checkbook for matching grants.
- Harris County: Workforce Solutions Gulf Coast
- Dallas County: Workforce Solutions Greater Dallas
- Tarrant County: Workforce Solutions for Tarrant County
- Travis County: Workforce Solutions Capital Area
- Bexar County: Workforce Solutions Alamo
🚌 TX Success Story: Harris County METRO (Houston)
Solving the Transit Retention Crisis with Stipends + Tech
The METRO Model
- The Problem: METRO needed to retain bus operators and mechanics in a competitive market. Shifts start before traditional daycares open.
- The Solution: They didn't build a center. They launched a Child Care Benefit using TOOTRiS.
- The Benefit: Up to $200/month (or similar stipend) for eligible employees.
- The Tech: Real-time access to providers who offer non-traditional hours (nights/weekends)—critical for transit workers.
- The Impact: Immediate retention and recruitment tool. No construction required!
💡 The Lesson
"METRO proves you don't need a building. They used a stipend model to support their workforce. Private employers can do the exact same thing and claim the Federal 45F Credit on the stipend amounts."
🤝 Dallas County Tri-Share — Open for 2026!
The Dallas County Employer Match Child Care Program is officially open for 2026 enrollment on a first-come, first-served basis!
The Dallas County Match — 2026 Details
- The Match: Dallas County provides a dollar-for-dollar match up to $1,500 per child annually
- Total Benefit: $3,000 per child ($1,500 employer + $1,500 county match)
- Enrollment: First-come, first-served for the 2026 cycle
- Your 45F Credit: Claim the federal credit on your $1,500 employer contribution!
The Result: You offer a "66% discount" on child care, but it only costs you 33% of the sticker price!
📍 Where Tri-Share is Active
- Dallas County: The only active Tri-Share program in Texas — Workforce Solutions Greater Dallas
- Tarrant County: Fort Worth area programs
Enroll Now: Dallas County Tri-Share Enrollment →
Texas Regional Strategies
Texas is too big for one strategy. Here's what works in each major metro:
🏙️ Houston (Harris County)
Strategy: METRO-style stipends + TOOTRiS platform
Focus: Energy, healthcare, logistics, transit
Contact: Workforce Solutions Gulf Coast
🏙️ Dallas-Fort Worth
Strategy: Dallas County Tri-Share (only active TX program) + TWC matching grants
Focus: Finance, tech, manufacturing
Contact: Workforce Solutions Greater Dallas / Tarrant County
🏙️ Austin (Travis County)
Strategy: "Family Friendly" workplace incentives + property tax swaps
Focus: Tech, government, education
Contact: Workforce Solutions Capital Area
🏙️ San Antonio (Bexar County)
Strategy: Wrap around Pre-K 4 SA (free Pre-K ends at 3 PM)
Focus: Military, healthcare, tourism
The Play: Use 45F credit for "After Care" that extends the free Pre-K day!
Texas-Specific Example: The "Property Tax + 45F" Stack
A Houston manufacturer builds an on-site center using Prop 2 exemption and Federal 45F.
| Category | Without Incentives | With Prop 2 + 45F |
|---|---|---|
| Construction Cost | $500,000 | $500,000 |
| Federal 45F Credit (50%) | $0 | -$250,000 |
| Annual Property Tax (est.) | $15,000/year | $0 (Prop 2 Exemption) |
| 10-Year Property Tax Savings | $0 | $150,000 |
| Net Investment | $650,000 | $100,000 |
💰 The Texas Advantage
Federal 45F pays for half the construction. Prop 2 eliminates property taxes forever. You get a $500k facility for $100k net over 10 years!
Texas Compliance & Resources
🏠 Prop 2 / SB 1145
100% property tax exemption for child care facilities. Petition your local county/city to adopt!
SB 1145 Text →📋 HHSC Licensing
All child care facilities must be licensed by the Texas Health and Human Services Commission (HHSC).
HHSC Licensing →📄 Federal Form 8882
File IRS Form 8882 to claim the federal Section 45F credit on your child care expenses.
IRS Form 8882 →🤝 Dallas County Tri-Share
Dallas County Match is open for 2026! First-come, first-served enrollment. (Currently the only active Tri-Share program in Texas.)
Dallas County Tri-Share Enrollment →💼 TWC Child Care Business Supports
NEW Feb 2026! Free business coaching, financial planning templates, and "Duo-Share" partnership guidance.
TWC Business Supports →📅 Prop 2 Deadline: April 30, 2026
Qualifying providers in Harris County (and most participating counties) must file Form 50-844 by April 30, 2026. Missing this window can cost over $15,000 in property tax savings.
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 like TOOTRiS that connect employees with vetted providers—including those with non-traditional hours (the METRO model!).
Stipend Programs
Monthly stipends to employees for licensed care qualify for the federal credit. Perfect for Texas employers!
Resource & Referral Services
Agencies that help employees find care. Subscription fees qualify under 45F.
Tri-Share Hubs
Regional hubs that manage the 33/33/33 cost-sharing. Your employer contribution is 45F-eligible!