Active: 2026 Grant Pilots
Tennessee NEW Care Partnerships & 50% Child Care Credits
Tennessee'sNEW Care Partnership Grantsmatch employer child care investments dollar-for-dollar — and the 2026 Federal 45F Credit lets small businesses recover50% of their remaining cost. The Volunteer Stack is one of the most powerful child care savings combinations in the South.
100%
Dollar-for-Dollar Match
50%
45F Credit (Small Biz)
85%
SMI Income Limit
95
Counties Covered
Active
Program Status
45F
Federal Credit Available
All
Employers Eligible
⚖️ How the Cost Split Works
Employer Pays
50%
matched by state
Tennessee Pays
50%
NEW Care Grant match
Parent Pays
Reduced
via Smart Steps subsidy
Tennessee Pays
~33%
state match
Parent Pays
~33%
of total tuition
📊 The Tennessee Savings Stack
| Benefit Layer | Small Business (<$32M) | Large Business |
|---|---|---|
| NEW Care Partnership Grant | Dollar-for-dollar match | Dollar-for-dollar match |
| Smart Steps Subsidy | Up to 85% SMI families | Up to 85% SMI families |
| Federal 45F Credit (2026) | 50% of employer share | 40% of employer share |
| Net Employer Cost | ~$1,500/child/yr | ~$1,800/child/yr |
💰 Real-World Employer Savings
| Cost Component | Without Program | With Volunteer Stack |
|---|---|---|
| Annual infant care cost (Nashville) | $12,480 | $12,480 |
| NEW Care Grant (state match 50%) | $0 | -$3,120 |
| Smart Steps subsidy (parent share) | $0 | -$3,120 |
| Employer Share before 45F | $12,480 | $6,240 |
| Federal 45F Credit (50% of employer share) | $0 | -$3,120 |
| Net Employer Cost | $12,480 | $3,120/yr |
Tennessee employers save ~75% using the Volunteer Stack (NEW Care + Smart Steps + Federal 45F)
📋 Available Programs & Incentives
Tennessee HB 1163 Employer Tax Credit
State Tax Credit
50% of employer contributions (up to $1M/yr)
Eligibility: All Tennessee employers with qualifying child care expenses
Tennessee Child Care Certificate Program (CCCP)
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
Tennessee Star Quality Rating
State Program
Quality ratings for child care providers
Eligibility: Licensed Tennessee child care providers
Duo-Share (Employer + Employee)
Employer Benefit
Flexible split — employer covers 25–75%
Eligibility: Any Tennessee employer, no state program required
📍 Geographic Coverage
Tri-Share and employer child care programs are available to employers and families across all cities and counties in this state. Key areas include:
❓ Frequently Asked Questions
HB 1163 created a 50% employer tax credit on contributions toward employee child care costs, up to $1 million per employer per year. This credit can be stacked with the Federal Section 45F Credit.
Yes — Tennessee employers can stack the HB 1163 state credit (50%) with the Federal Section 45F Credit (up to 50%). Together, these credits can offset nearly all employer child care contributions.
Nashville, Memphis, Knoxville, and Chattanooga have the highest employer participation rates. The HB 1163 credit is available statewide to all Tennessee employers.
Tennessee does not have a formal Tri-Share program. However, HB 1163 creates a strong employer incentive. We recommend a Duo-Share model — contact us for a free consultation.
Tennessee's Child Care Certificate Program (CCCP) serves families at or below 85% of the State Median Income (SMI). Contact Tennessee DHS for current income thresholds.
Tennessee Star Quality is the state'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 Tennessee Department of Revenue at tn.gov/revenue for guidance on claiming HB 1163 credits.