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Child Care Contribution Tax Credit

Important Notice: Change to Child Care Contribution Tax Credit

During the recent legislative session, there was a change that directly impacts the Child Care Contribution Tax Credit program. As a valued contributor we want to inform you of the change that affected this program as well as other tax credit programs in the state. For more than a decade the Child Care Contribution Tax Credit program provided taxpayers a way to support quality care and education and receive an Oregon tax credit of 75 cents for each dollar contributed. Beginning October 5th, 2015 tax payers will receive an Oregon tax credit of 50 cents for each dollar contributed.

For more information click to open the links below

CC Tax Flyer  Tax Credit Letter

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How much is left for 2016?

This page will be updated periodically. 
  
Contributions available as of January 6, 2015:  $500,000.00.

 
For more information on the availability of the Contribution Tax Credit call (503) 947-3123. 
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An Innovative Strategy

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
 
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 50 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

Where and how are funds distributed? 
Tax credits benifit our children  
Tax credits benefit our children

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?

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

Any individual or company with Oregon state tax liability.

 on child care subsidies.

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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? 

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 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. 
 
Some forms Require Adobe Acrobat Reader to run properly.
The most recent versions of Windows/Mac OS/Android are available by clicking the link below.
 
  
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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  
 
Some forms Require Adobe Acrobat Reader to run properly.
The most recent versions of Windows/Mac OS/Android are available by clicking the link below.
 
  
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