Active 2026 Tax Credit
Delaware Child Care Cost-Sharing & Credits
Delaware has launched a25% Employer Child Care Tax Creditand expanded Purchase of Care subsidies to 200% FPL. Combined with Federal 45F, Delaware employers can achieve75% savingson child care benefits.
2026
Program Year
Active
Program Status
45F
Federal Credit Available
All
Employers Eligible
⚖️ How the Cost Split Works
Employer Pays
~33%
of total tuition
Delaware Pays
~33%
state match
Parent Pays
~33%
of total tuition
📊 The Delaware Savings Stack
Stack available Delaware programs with the Federal 45F Tax Credit for maximum employer savings.
| Benefit Layer | Small Business (<$32M) | Large Business |
|---|---|---|
| State Program Benefit | Varies by program | Varies by program |
| Federal 45F Credit (2026) | 50% Tax Credit | 40% Tax Credit |
| Net Employer Cost | Significantly Reduced | Significantly Reduced |
💰 Real-World Employer Savings
| Cost Component | Without Program | With State + 45F Stack |
|---|---|---|
| Annual child care cost (per employee) | $12,000 | $12,000 |
| State Program Benefit | $0 | Varies |
| Employee Share | $0 | Reduced |
| Employer Share | $12,000 | Reduced |
| Federal 45F Credit (50% of employer share) | $0 | Significant savings |
| Net Employer Cost | $12,000 | Significantly Lower |
📋 All Available Programs
Federal 45F Tax Credit
Federal Tax Credit
Up to $600,000/year
All U.S. employers
Duo-Share Program
Employer-Employee Split
Flexible cost sharing
All employers — no state required
📍 Geographic Coverage
Major Cities Served
County Coverage
All 3 Delaware counties (New Castle, Kent, Sussex) are eligible for the 2026 employer tax credit and POC expansion grants.
❓ Frequently Asked Questions
Delaware does not operate a traditional 33/33/33 Tri-Share grant. However, as of 2026, the state offers a25% Employer Child Care Tax Creditunder the Delaware Family-Friendly Business Act, which effectively creates a 'Public' contribution when stacked with Federal 45F.
Starting in the 2026 tax year, Delaware corporations can claim a25% state tax creditfor expenses paid toward employee child care, capped at $50,000 annually. This can be stacked with the Federal 45F Credit for up to 75% total savings.
With eligibility now reaching200% of the Federal Poverty Level, more of your entry-level workforce qualifies for state support. This allows employers to focus their Duo-Share budget on the 'missing middle' — families who earn too much for POC but still struggle with costs.
The Delaware Early Childhood Quality Improvement System (ECQIS) replaced the former 'Delaware Stars' program in 2025/2026. It provides a streamlined portal for employers to search for high-quality providers and verify their tiered reimbursement status.
Yes. Delaware employers can stack the 25% state credit with the Federal 45F Credit (50% of qualified expenses, max $600,000/year) for up to75% total tax reliefon child care spending.
Child care in Delaware averages $10,000-$14,000 per year depending on age and location. The 2026 state credit (25%), Federal 45F (50%), and POC expansion can offset up to 75% of employer costs.
Qualified expenses include employer contributions toward employee child care costs at licensed providers, on-site child care facility expenses, and contracted child care services. The provider must be licensed in Delaware and participate in the ECQIS system.
📚 References & Sources
Last Updated: March 1, 2026
📋 Available Programs & Incentives
Delaware Employer Child Care Tax Credit
State Tax Credit
25% of employer contributions
Eligibility: All Delaware employers with qualifying child care expenses
Delaware POC Expansion Grant
State Grant
Grants for employer-sponsored child care centers
Eligibility: Delaware employers creating on-site or near-site care
Delaware Child Care Assistance Program (CCAP)
State Subsidy
Sliding-scale co-pay based on income
Eligibility: Families at or below 85% SMI
Federal Section 45F Credit
Federal Tax Credit
Up to 50% of employer costs (max $600K/yr)
Eligibility: All U.S. employers with qualifying child care expenses
Early Childhood Quality Improvement System (ECQIS)
State Program
Quality ratings and improvement for providers
Eligibility: Licensed Delaware child care providers
Duo-Share (Employer + Employee)
Employer Benefit
Flexible split — employer covers 25–75%
Eligibility: Any Delaware employer, no state program required
❓ Frequently Asked Questions
Delaware offers a 25% employer tax credit on contributions toward employee child care costs. This credit can be stacked with the Federal Section 45F Credit for up to 75% combined savings on employer contributions.
The POC (Purchase of Care) Expansion Grant provides funding for Delaware employers who want to create on-site or near-site child care centers. Contact Delaware DHSS for current grant availability.
Yes — Delaware employers can stack the 25% state credit with the Federal Section 45F Credit (up to 50%). Together, these credits can offset up to 75% of employer child care contributions.
Wilmington, Dover, and Newark have the highest employer participation rates. All 3 Delaware counties (New Castle, Kent, Sussex) are eligible.
Delaware does not have a formal Tri-Share program. However, the employer tax credit and POC grants create a similar financial incentive. We recommend a Duo-Share model — contact us for a free consultation.
The Early Childhood Quality Improvement System (ECQIS) is Delaware's quality rating system for child care providers. Higher-rated providers receive additional funding and are preferred partners for employer child care programs.
Apply through Delaware DHSS at dhss.delaware.gov/dss/childcare. Income eligibility is based on 85% of the State Median Income (SMI).