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Child Care Contribution Tax Credit

An Innovative Strategy

Two-thirds of children under five are in non-parental care  
Two-thirds of children under five are in non-parental care
An Innovative Strategy
There is a commonly expressed view that America is experiencing market failure in the child care sector. Economists describe market failure as a situation in which a market left on its own fails to allocate resources efficiently and effectively. 
 
Although child care providers are among the state’s lowest-paid workers, parents still struggle to afford the cost of care. Conversely, if parents want high quality care for their children, the cost is often beyond their financial means.
 
In 2003, the state legislature recognized this disparity in the child care system by enacting the Oregon Child Care Contribution Tax Credit. By making a contribution to the program, taxpayers receive an Oregon state tax credit of 75 cents for each dollar contributed.
 
Proceeds from the credits were used in demonstration projects from 2004 - 2009. These projects have provided valuable information on the true cost of child care, which has led to a statewide strategy to increase provider compensation, improve the quality of child care environments and inform public policy on child care subsidies. 

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The Goals of the Legislation

Oregon's children deserve quality child care  
Oregon's Children Deserve Quality Child Care
The Goals of the Legislation
  • Create an incentive for businesses and individuals to invest in child care.
  • Create a funding pool of private contributions that will promote and sustain the operation of quality, affordable child care businesses.
  • Target specific community needs, such as infant and toddler care, school age or after-hours care.
  • Assess the actual cost of quality child care by addressing quality, affordability, and compensation within the same project.
  • Strengthen child care businesses, while making child care services more affordable to low-income parents.

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Fund Distribution and Use

Tax credits benifit our children  
Tax credits benefit our children
Where and how are funds distributed?
Currently, the funds are distributed to qualified community agencies selected as demonstration sites through a competitive process. There is no geographic link between the location of the investor and that of the demonstration projects.
 
Funds are used to increase provider wages and professional development, decrease parent cost to less than 10 percent of family income, and improve the quality of care children receive.

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Who is Eligible to Contribute?

Quality child care is a vital part of Oregon's economy  
Quality child care is a vital part of Oregon's economy
Who is Eligible to Contribute?
Any individual or company with Oregon state tax liability.

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How are the funds managed?

How are the funds managed?  
How are the funds managed?
All funds are deposited in the state Child Care Fund, managed by the Office of Child Care of the Department of Education, and annually distributed to the demonstration projects.

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How much is available?

How much is available?  
How much is available?
A total of $500,000 in tax credits is available each calendar year.  
 
The tax credit limit is determined by the tax credits available and the amount of the individual or company's Oregon state tax liability.

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Are Federal Taxes Impacted?

Are Federal Taxes Impacted?  

Are federal taxes impacted?
For federal tax purposes, contributions to the Office of Child Care may be eligible to be treated as contributions to 501(c) (3) charitable organizations. Contributors should seek advice from their individual tax advisors regarding use of credits and deductions for tax purposes.


 

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Other Benefits

Other Benefits  
Other Benefits Contributors Receive
In addition to tax credits received, contributors help Oregon with a return on this investment: small business development, support for the workforce, and children entering school ready to succeed.  Contributors are ultimately supporting a statewide child care system that is safe, of high quality, affordable and accessible.

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How to Contribute

How to Contribute  

How can a company or individual contribute?
A company or individual can contribute in two ways. 
 
1.  Make a cash contribution by completing the Child Care Contribution Tax Credit Form
 
2.  Make a stock contribution by completing the Stock
Contribution Form
.    
 

Frequently Asked Questions - Stock Contributions 


Contribution Tax Credit Example - Claiming the Credit
 
If you have any questions, please contact Early Learning Division Programs at 503-947-3123 or
503-947-3121.

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Download the Application

 
Child Care Contribution Tax Credit Form (CO-525) Click Here 
Child Care Contribution Tax Credit- Stock Contribution Form  (CO-528) Click Here 
Child Care Contribution Tax Credit Refund Form (CO-526) Click Here 
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How much is left for 2014?

This page will be updated periodically. 
  
Contributions available as of March 3, 2014:  $665,667.00
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