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Nebraska Creates New Tax Credits to Support High Quality Early Care and Education

In 2016 Nebraska passed the School Readiness Tax Credit Act, creating two new tax credits designed to increase access to high quality early care and education (ECE) programs.

One of the tax credits targets ECE professionals who have attained the minimum qualification of a Child Development Associate Credential or a one-year certificate/diploma in ECE or child development and who are employed in ECE programs participating in the state’s Quality Rating and Improvement System (QRIS). For 2018 the amount of the refundable credit ranges from $510 to $1,530 depending on the individual’s qualifications.

The second tax credit is nonrefundable and is available to ECE programs participating in the QRIS with at least a step-three quality rating. The amount of the credit is determined by a program’s rating and the number of children served who receive child care subsidies. It ranges from $250 per eligible child at step-three to $750 per eligible child at step-five.

The total amount of tax credits available for both programs is limited to $5 million per tax year.

Nebraska’s Act is modeled after the very successful Louisiana tax credits.

Updated November 2019


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