If an individual provider spends $10,000 in one year in expenses that significantly improve the quality of care, they are able to take a $1,000 tax credit for the next 10 years and a $10,000 credit at the end of 10 years. For a corporation, financial institution, partnership, LLC, S-corporation, estate or trust, they will receive a tax credit of 30% of $30,000.
This tax credit was created to assist providers as they make investments in their centers or homes to improve the quality of child care provided. The Office of Child Care and Head Start certifies whether an investment contributed significantly toward the goal of providing quality child care services. The credit may not reduce the tax otherwise due below zero. Any unused portion of the credit may be carried over to the following year or years until exhausted. Maine child care providers will need to apply to the Office of Child Care and Head Start, Department of Health and Human Services, for certification of their expenses prior to filing their taxes.