GEORGIA EMPLOYER CHILD CARE CREDIT · STATE REFERENCE WORKBOOK
Georgia's Employer Child Care Tax Credit
A working reference to Georgia's standalone state credit for employers who provide or sponsor child care — and how it sits alongside the federal §45F credit.
AUTHORITY: O.C.G.A. § 48-7-40.6 | FORMS: IT-CCC75 · IT-CCC100 | LIABILITY CAP: 50% of GA tax | EDITION: v1 · 2026
01 - At a Glance
A separate state credit — not a §45F add-on
Georgia's employer child care credit is its own long-standing state incentive under O.C.G.A. § 48-7-40.6 (operating credit enacted 1989; property credit since 1999). It is not a 2026 bonus layered onto the federal §45F credit, and the per-child dollar figures sometimes circulated for it are not part of the statute. What the law actually provides:
CORRECTING A COMMON ERROR — THESE FIGURES ARE REAL, BUT THEY ARE A DIFFERENT STATUTE
The figures "$1,000 per child in year one, $500 thereafter," the "$20 million statewide cap," and "50% of the federal amount plus $250 per child under six" are real Georgia law — but they do not come from O.C.G.A. § 48-7-40.6. They were created or amended by HB 136 (2025), signed May 13, 2025:
O.C.G.A. § 48-7-29.28 (new, TY2026) — employer credit of $500 per child, or $1,000 per child in the employer's first year, for paying at least $1,000 per employee directly to a DECAL-licensed facility for a child under age six, in addition to other compensation. $20 million statewide cap, preapproval, first come first served, no carryforward, sunsets 12/31/2030.
O.C.G.A. § 48-7-29.10 (amended, TY2025) — the family child and dependent care credit rose from 30% to 50% of the federal §21 credit.
O.C.G.A. § 48-7-29.27 (new, TY2026) — Georgia Child Tax Credit of $250per qualifying child under age six.
HB 136 preserved § 48-7-40.6 intact. The error to correct is attribution, not the numbers: § 48-7-40.6 remains 75% / 100% as set out above.
02 - Structure
Two distinct credits under one statute
| Feature | Operating / sponsorship credit | Qualified property credit |
|---|---|---|
| Amount | 75% of cost of operation, minus amounts paid by employees | 100% of qualified child care property cost |
| How claimed | In the year the cost is incurred | 10% per year for 10 years from placed-in-service |
| Liability cap | 50% of GA income tax liability | 50% of GA income tax liability |
| Carryforward | 5 years | 3 years |
| Form | IT-CCC75 | IT-CCC100 |
| Recapture | — | 14-year window. 100% within 5 full years; then 90/80/70/60/50/40/30/20/10% for years 6–14; 0% after year 14 |
The two are designed to be complementary: one rewards the ongoing cost of providing or sponsoring care, the other rewards the capital cost of building or equipping a center. The same property cost can't be claimed under both.
03 - Operating Credit
Operating & sponsorship credit — 75%
Employers who provide child care (on the employer's premises) or sponsor it (a contractual arrangement with a child care facility, paid for by the employer) may claim a credit equal to 75% of the cost of operation, less any amounts paid by employees.
What "cost of operation" includes
Direct operating costs — salaries, supplies, rent, food, transportation, and educational or special activities.
Contract payments to a qualified child care facility under a sponsorship arrangement — i.e., the employer paying a provider for employees' care.
Excludes the cost of qualified child care property (that goes through the separate 100% property credit, not here).
"Employer provided" means care on the employer's Georgia premises; "employer sponsored" means a contractual arrangement with a child care facility that the employer pays for. A "child" is a person under 13 who is a dependent of an employee.
KEY POINT FOR THE SEATS MODEL
Because "cost of operation" expressly includes payments to a qualified facility under a contract, the 75% credit reaches the employer-sponsored (paying-for-seats) arrangement — the employer does not have to run its own center to use it.
04 - Property Credit
Qualified child care property credit — 100% over 10 years
An employer that purchases or acquires qualified child care property may claim a credit totaling 100% of its cost, taken at 10% per year for ten years beginning when the property is placed in service.
Qualified property is real or tangible personal property used exclusively to construct, expand, improve, or operate an employer-provided child care facility.
Licensing. The facility must be licensed or commissioned by Georgia's Department of Early Care and Learning (DECAL, "Bright from the Start").
95% test. At least 95% of the children using the facility must be children of the employer's employees — or of jointly owning employers, or of a corporation in the taxpayer's affiliated group within the meaning of IRC §1504(a). §48-7-40.6(a)(6)(B). This is a condition of the property credit only; it does not apply to the 75% operating/sponsorship credit.
Capped at 50% of GA income tax liability, with a 3-year carryforward.
Recapture applies on any disposition of qualified child care property, or any event under which it ceases to be qualified child care property, within a 14-year window — O.C.G.A. § 48-7-40.6(a)(7)–(9), (f). The recapture percentage is 100% if the event occurs within five full years of placed-in-service, then steps down 90 / 80 / 70 / 60 / 50 / 40 / 30 / 20 / 10 for the sixth through fourteenth years, and 0% after the close of the fourteenth year. Excepted:transfer by reason of death; transfer between spouses or incident to divorce; an IRC §381(a) transaction; a change in the form of the business where the property is retained in the trade or business as qualified child care property and the taxpayer retains a substantial interest; and accident or casualty.
05 - The Seats Model
The "paying for seats" model in Georgia
For an employer near a licensed center, the employer-sponsored route mirrors the federal seats model and unlocks the 75% operating credit:
Employer enters a contractual arrangement with a Georgia-licensed child care facility to provide or fund care for employees' children.
Employer pays the facility directly for the agreed care (these payments are part of "cost of operation").
Subtract any portion employees themselves pay; the remainder is the credit base.
Apply 75%, cap at 50% of Georgia income tax liability, and carry any excess forward up to 5 years. Claim on Form IT-CCC75; certify employee names, the provider, and required details to the Department of Revenue.
PROVIDER ANGLE
A Georgia center can pair its DECAL licensing with this 75% credit when approaching a nearby employer — and, separately, point the employer to the federal §45F credit on the same sponsorship spend. Bringing both to the table is what makes the provider the trusted partner.
06 - Worksheet
The math — interactive worksheet
Model the Georgia operating / sponsorship credit. It applies 75% to the employer's net cost, then caps the usable amount at 50% of Georgia income tax liability and shows any carryforward. Illustrative only.
07 - Stacking
Stacking with federal §45F
The Georgia credit and the federal §45F credit are independent — one reduces Georgia income tax, the other reduces federal income tax. A sponsorship arrangement can potentially feed both, but each has its own limits and definitions, so model them together rather than assuming a clean double.
Different ceilings. Federal is capped at $500K/$600K and limited to federal liability; Georgia is capped at 50% of Georgia liability.
Different rates. Federal 40%/50% of qualified expenditures; Georgia 75% of cost of operation (less employee payments).
Deduction coordination. On the federal side, the deduction (or basis) is reduced by the federal credit; Georgia generally starts from federal taxable income, so model the flow-through.
Confirm same-dollar treatment. Whether identical dollars can support both credits depends on each program's rules and available liability — verify before relying on a stacked position.
See the companion Federal §45F workbook for the federal mechanics and worksheet.
08 - Recordkeeping
Documentation checklist
DECAL licensing / commission for the facility (required for the property credit; good practice for sponsorship).
Contract for the sponsorship arrangement, plus invoices and proof the employer paid the facility.
Cost-of-operation schedule separating operating costs from qualified property (they run through different credits).
Employee & child records — names and required identifiers of employees using the facility, and the provider's name and identification, certified to the Department of Revenue.
95% test support for the property credit — children using the facility are children of employees.
Liability & carryforward tracking — current-year 50% cap and remaining carryforward (5 yrs operating / 3 yrs property).
Form IT-CCC75 and/or IT-CCC100 attached to the Georgia income tax return.
Recapture calendar for property — the 14-year window from placed-in-service, with the percentage step-down (100% through year 5, then 90 down to 10, 0 after year 14).
09 - FAQ
Frequently asked questions
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No. Georgia's employer credit under O.C.G.A. § 48-7-40.6 is a separate, pre-existing state credit. It was not created or expanded as a 2026 supplement to the federal law. The federal OBBBA changes affect §45F only.
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No. The 75% operating credit covers "employer sponsored" care — a contractual arrangement with a child care facility that the employer pays for. Running an on-premises center ("employer provided") is the other route, and the 100% property credit rewards building or equipping one.
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75% of the cost of operation (less amounts employees pay) for providing or sponsoring care, and 100% of qualified child care property cost taken at 10% per year over ten years. Each is capped at 50% of Georgia income tax liability for the year.
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It carries forward — up to 5 years for the operating credit and up to 3 years for the property credit, from the close of the year the cost was incurred or the property placed in service.
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Reasonable direct operating costs — salaries, supplies, rent, food, transportation, educational and special activities, and contract payments to a qualified facility. It excludes the cost of qualified child care property, which is claimed under the separate property credit.
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For the property credit, yes — the facility must be licensed or commissioned by Georgia's Department of Early Care and Learning (DECAL), and at least 95% of the children using it must be employees' children. Licensing is also sound practice for a sponsorship arrangement.
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Form IT-CCC75 for the operating/sponsorship credit and Form IT-CCC100 for the qualified property credit, attached to the Georgia income tax return, with the required certification to the Department of Revenue.
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The credit offsets Georgia income tax, so an employer needs Georgia income tax liability to benefit. Entities without such liability generally cannot use it directly.
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Yes, but it's distinct from the employer credits: Georgia gives individuals a personal credit equal to 30% of the federal dependent-care credit on their state return. That is claimed by families, not employers.
10 - Provenance
Sources & disclaimer
PRIMARY & SECONDARY SOURCES
O.C.G.A. § 48-7-40.6 — Tax credits for employers providing child care (statutory text)
Ga. Comp. R. & Regs. r. 560-7-8-.38 — Child Care Credit, Definitions and Description
Georgia Department of Revenue — Tax Credit Summary; Employer's Credit for Purchasing Child Care Property (Forms IT-CCC75 / IT-CCC100)
GEEARS / Georgia early-learning business toolkit — employer & family child care credits overview
This workbook is general educational information reflecting Georgia law and Department of Revenue guidance available as of June 2026. Georgia's employer child care credit under O.C.G.A. § 48-7-40.6 is a state credit independent of the federal §45F credit. This material is not legal or tax advice, does not create a client relationship, and should not be relied upon for filing positions. Forms, percentages, caps, and procedural requirements should be confirmed against current Georgia DOR instructions and a qualified tax professional for any specific business.