Extra credit

Entrepreneur, May, 2003 by Joanne Cleaver

Not many companies cash in on the state income tax child-care credits offered by 25 states, partly because many corporations don't have to pay state income taxes. But it's also likely that companies just don't know about the credits, says Christina Smith Fitzpatrick, senior policy analyst with the National Women's Law Center (NWLC) in Washington, DC.

Specifics vary by state but typically credit is given for the cost of offering even low-cost benefits like child-care referral services and help with last-minute child-care in case of emergency, travel or sickness. Most states save the most generous credits for companies that build and run their own on-site child-care centers.

Some of the states' generosity is paltry, but others offer plenty. Mississippi, for instance, offers companies credit for half of what they spend on company-owned child-care centers-yet only two firms in Mississippi took advantage of that credit on their 2001 state tax returns.

Find out if your state offers child-care benefit tax credits by contacting the NWLC or your state's tax agency. Links to each state's tax agency can be found at the Federation of Tax Administrators' Web site (www.taxadmin.org).

JOANNE CLEAVER has written for a variety of publications, including the Chicago Tribune and Executive Female.