Indiana lawmakers recently advanced a pair of initiatives aimed at expanding access to childcare for working Hoosier families and increasing support for low-income households across the state.
House Enrolled Act 1177 will expand the state's employer childcare tax credit to include companies with up to 500 employees. Under this new law, businesses qualify for the credit if they operate an employer-run childcare facility or contract with a licensed provider to offer this service.
This credit can be used to offset costs associated with operating childcare facilities, including staff training and higher wages for workers. This new law is designed to encourage more employers to play a direct role in expanding childcare options for their employees and improving workforce stability. Access to childcare is critical to companies' ability to attract and retain talent and they must be part of the solution.
The new law also includes a provision allowing local redevelopment commissions to use tax increment financing to support the construction, expansion or operation of childcare facilities.
In a separate effort, the State Budget Committee recently approved a proposal to invest an additional $200 million into the Child Care and Development Fund (CCDF) voucher program. This program provides federally supported assistance to help low-income families afford childcare based on income and employment criteria.
This additional funding allows for Indiana to resume enrolling an estimated 14,000 Hoosier children. Currently, the program supports 43,000 children statewide.
With the new funding, additional vouchers will prioritize siblings of current voucher holders, infants and children between 3-5 years old. A certain number of seats will be held for children of foster and kinship families, children with special needs, homeless children, children of childcare workers and children of Ivy Tech students.
The funding was authorized by the General Assembly through Senate Enrolled Act 4, which allowed the state to supplement the CCDF program through the Financial Responsibility and Opportunity Growth Fund (FROG).
According to new state data, capacity at regulated childcare facilities has increased over the past year and now stands at approximately 175,000 children.
With House Enrolled Act 1177 and the additional CCDF funding, this combined approach increases employer involvement and expands direct assistance to help address childcare challenges while supporting Hoosier workforce participation and economic growth across Indiana.
To learn more about state childcare resources, click here.
