Active Pilots & 50% Tax Credits
Virginia Child Care Cost-Sharing & 50% Refundable Tax Credits
Virginia launched the HB 18 cost-sharing pilot in 2026 with $25M in funding. The 50% refundable HB 403 tax credit means the state may send you a check if your credit exceeds your tax bill.
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
Virginia Pays
~33%
state match
Parent Pays
~33%
of total tuition
π The Virginia Savings Stack
Stack available Virginia 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
Virginia HB 1677 Employer Tax Credit
State Tax Credit
50% of employer contributions (up to $500K/yr)
Eligibility: All Virginia employers with qualifying child care expenses
Virginia Child Care Subsidy Program (CCSP)
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
Virginia Quality Rating System (VQB5)
State Program
Quality ratings for child care providers
Eligibility: Licensed Virginia child care providers
Duo-Share (Employer + Employee)
Employer Benefit
Flexible split β employer covers 25β75%
Eligibility: Any Virginia employer, no state program required
π Geographic Coverage
Major Cities Served
County Coverage
All 95 Virginia counties and 38 independent cities are eligible for HB 18/SB 3 pilots and the HB 403 refundable employer tax credit. Contact VDSS for enrollment.
β Frequently Asked Questions
HB 1677 created a 50% employer tax credit on contributions toward employee child care costs, up to $500,000 per employer per year. This credit can be stacked with the Federal Section 45F Credit.
Yes β Virginia employers can stack the HB 1677 state credit (50%) with the Federal Section 45F Credit (up to 50%). Together, these credits can offset nearly all employer child care contributions.
Virginia Beach, Norfolk, Chesapeake, Richmond, and Arlington have the highest employer participation rates. The HB 1677 credit is available statewide to all Virginia employers.
Virginia does not have a formal Tri-Share program. However, HB 1677 creates a strong employer incentive. We recommend a Duo-Share model β contact us for a free consultation.
Virginia's Child Care Subsidy Program (CCSP) serves families at or below 85% of the State Median Income (SMI). Contact Virginia DSS for current income thresholds.
Virginia Quality Building Blocks for Birth to Five (VQB5) is Virginia'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 Virginia Department of Taxation at tax.virginia.gov for guidance on claiming HB 1677 credits.
π References & Sources
Last Updated: March 1, 2026