Across the country—and especially in fast-growing economies like Utah—employers face a persistent challenge: finding and retaining workers. Two of the most powerful, yet underused, strategies to address this challenge are employer-supported child care and paid parental leave. 

Reliable child care and paid parental leave allow parents to stay in the workforce, reduce absenteeism, and improve employee retention. When businesses help employees access care, they strengthen both their workforce and the broader community. 

Starting in 2026, employers have a unique opportunity to support working parents while significantly reducing their costs through four recently expanded tax incentives: 

• The Federal Employer-Provided Child Care Credit (45F) 
• The Federal Employer Credit for Paid Family and Medical Leave (45S) 
• Utah’s Employer Child Care Tax Credit (HB190) 
• Dependent Care Assistance Programs 

Together, these valuable federal and state tax incentives make it more affordable than ever for employers to help employees access child care, including caring for their own child through paid parental leave. 

A Smart Investment in Your Workforce 

Employer-supported child care can take many forms, depending on what works best for your business. Employers may choose to: 

• Offer on-site child care 
• Contract directly with child care providers 
• Work through an intermediary that partners with multiple providers, giving employees greater flexibility and choice 

These investments help employers recruit talent, retain valuable employees, and support working parents who are critical to our local economy. 

Significant Tax Savings 

The new incentives substantially reduce the cost of employer investments in child care and paid leave. 

• Small employers (earning less than $32 million annually) may qualify for combined state and federal employer-sponsored child care tax credits of up to 80% of their investment. 
• Larger employers may qualify for combined employer-sponsored child care credits of up to 50%. 
• Employers may qualify for up to 25% tax credit for paid wages or premiums paid for insurance that covers qualifying paid leave. 

This means businesses can make a meaningful investment in their workforce while covering a large portion of the cost through tax credits. 

Why This Matters Now 

Child care and paid leave are essential infrastructure for a thriving workforce. In communities like ours, where many families struggle to find affordable, high-quality care, employer leadership can make a real difference. 

When businesses invest in child care and paid leave, they help employees stay in the workforce, strengthen local families, and contribute to a healthier local economy. 

Take the Next Step 

Now is the time to explore how your organization can take advantage of these incentives. 

• Learn more about the employer-sponsored child care tax credits → FAQs 
• Take the Best Place for Working Parents self assessment → 3-minute survey 
• Estimate your potential employer-sponsored child care tax credits – see calculator below
• Review the Employer Guide

By investing in child care and paid leave today, employers can support their employees, strengthen their workforce, and help build a stronger community for the future.