Active 2026 Tax Credit Expansion
Rhode Island Child Care Tax Credit & Ocean State Stack
Rhode Island's H 7393 (2026) provides a 30% employer tax credit on qualified child care expenditures. Stacked with the Federal 45F Credit, small businesses can provide child care benefits at approximately 20% of tuition cost.
2026
Program Year
Active
Program Status
45F
Federal Credit Available
All
Employers Eligible
βοΈ How the Cost Split Works
Employer Pays
~33%
of total tuition
Rhode Island Pays
~33%
state match
Parent Pays
~33%
of total tuition
π The Rhode Island Savings Stack
Stack available Rhode Island 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 |
π° 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 |
π Available Programs & Incentives
Rhode Island HB 7171 Employer Tax Credit
State Tax Credit
50% of employer contributions (up to $100K/yr)
Eligibility: All Rhode Island employers with qualifying child care expenses
Rhode Island Child Care Assistance Program (CCAP)
State Subsidy
Sliding-scale co-pay based on income
Eligibility: Families at or below 180% FPL
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
BrightStars Quality Rating
State Program
Quality ratings for child care providers
Eligibility: Licensed Rhode Island child care providers
Duo-Share (Employer + Employee)
Employer Benefit
Flexible split β employer covers 25β75%
Eligibility: Any Rhode Island employer, no state program required
π Geographic Coverage
Major Cities Served
County Coverage
All 5 Rhode Island counties are eligible for the H 7393 30% employer tax credit. Educators receive no-copay pilot benefits. Contact DCYF for enrollment.
β Frequently Asked Questions
HB 7171 created a 50% employer tax credit on contributions toward employee child care costs, up to $100,000 per employer per year. This credit can be stacked with the Federal Section 45F Credit.
Yes β Rhode Island employers can stack the HB 7171 state credit (50%) with the Federal Section 45F Credit (up to 50%). Together, these credits can offset nearly all employer child care contributions.
Providence, Cranston, Warwick, and Pawtucket have the highest employer participation rates. The HB 7171 credit is available statewide to all Rhode Island employers.
Rhode Island does not have a formal Tri-Share program. However, HB 7171 creates a strong employer incentive. We recommend a Duo-Share model β contact us for a free consultation.
Rhode Island's Child Care Assistance Program (CCAP) serves families at or below 180% of the Federal Poverty Level (FPL). Contact Rhode Island DCYF for current income thresholds.
BrightStars is Rhode Island's quality rating and improvement system for child care providers. Higher-rated providers receive additional funding and are preferred partners for employer child care programs.
Contact the Rhode Island Division of Taxation at tax.ri.gov for guidance on claiming HB 7171 credits.
π References & Sources
Last Updated: March 1, 2026