Does Kansas give employers a tax credit for childcare expenses?

Plain-English summary

Kansas has long offered employers a credit against income and privilege tax for helping their employees with child care (K.S.A. 79-32,190). 2026 Senate Bill 82 (Section 3) expanded it, effective for tax years beginning on or after January 1, 2027. There are two paths:

• Direct employer child care (subsection (a)) — an employer gets a credit for 75% of what it spends in Kansas to pay employees' child care costs, to set up or expand a child care program primarily used by its employees, to pay referral services that connect employees to providers, or to invest collaboratively with other employers.
• Contributions to community child care (subsection (b)) — an employer that gives money to a third party to expand community child care gets 75% of those costs if the recipient serves families receiving a child care subsidy, or 50% if it does not.

The provider must be licensed under Kansas law. The credit is capped at $100,000 per taxpayer per year (with carryover of any excess for up to three following years, for tax year 2027 and after), and total credits statewide are capped at $3,000,000 per fiscal year. "Community child care" means a for-profit or not-for-profit provider open at least nine hours a day and located within 45 miles of the employer. The bill takes effect July 1, 2026.

What this means for you

Employers

• If you pay for or provide child care for your employees, you may recover 75% of the Kansas cost as a tax credit — up to $100,000 a year.
• If instead you donate to a community child care provider, your credit is 75% when that provider serves subsidy families, or 50% otherwise.
• The provider you use or fund must be licensed in Kansas, or no credit is allowed.
• Excess credit above your tax isn't lost — for tax year 2027 onward it carries forward, but no later than the third succeeding tax year.
• Because there's a $3 million statewide cap per fiscal year, apply early; the enhanced percentages apply for tax years beginning on or after January 1, 2027.

Child care providers

• Being licensed in Kansas is what lets the employers who use or fund you claim the credit — an important selling point when partnering with local businesses.
• Serving families who receive a child care subsidy lets a contributing employer claim the higher 75% (rather than 50%) credit on its gifts to you.

Common questions

Q: How much is the credit?
A: 75% of qualifying costs an employer spends on child care for its own employees; for gifts to a third-party community child care provider, 75% if the provider serves subsidy families or 50% if not.

Q: Is there a cap?
A: Yes — $100,000 per employer per year, and $3,000,000 in total credits statewide per fiscal year.

Q: When does the expanded credit apply?
A: For tax years beginning on or after January 1, 2027 (the bill itself takes effect July 1, 2026).

Q: Does the child care provider have to be licensed?
A: Yes. No credit is allowed unless the child day care facility or provider is licensed under Kansas law.

Citations and references

• K.S.A. 79-32,190(a) (as amended by 2026 Senate Bill 82, Section 3) — 75% credit for an employer's own employee child care expenses (paying costs, establishing/expanding a program, referral services, collaborative investment).
• K.S.A. 79-32,190(b) — credit for contributions to a third party expanding community child care: 75% if the recipient serves subsidy families, 50% if not.
• K.S.A. 79-32,190(c) — no credit unless the child day care facility or provider is licensed under Kansas law.
• K.S.A. 79-32,190(d) — $100,000-per-taxpayer annual cap; carryover of excess for tax year 2027 and after, up to the third succeeding taxable year.
• K.S.A. 79-32,190(e) — aggregate credits capped at $3,000,000 per fiscal year.
• K.S.A. 79-32,190(f) — "community child care" = a for-profit or not-for-profit provider open at least nine hours per day and within 45 miles of the employer.
• Applies: tax years beginning on or after January 1, 2027. Bill effective date: July 1, 2026.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 26-05

Original ruling text

Policy and Research
109 SW 9th Street Phone: 785-368-8222
PO Box 3506 Fax: 785-296-1279
Topeka KS 66601-3506 www.ksrevenue.gov
Mark A. Burghart, Secretary Laura Kelly, Governor

                                       NOTICE 26-05

             INCOME AND PRIVILEGE TAX CREDIT FOR CHILDCARE EXPENSES

                                       (JULY 1, 2026)

   During the 2026 Legislative Session Senate Bill 82 was passed and signed into law. Section

3 of the Bill, which applies on and after January 1, 2027, amends K.S.A. 2025 Supp. 79-32,190
which allows an income and privilege tax credit for childcare expenses paid by an employer.

  Newly enumerated K.S.A. 79-32,190(a)(1) allows an employer (taxpayer) a tax credit for the

expenses related to the provision of child care for the taxpayer's employees including:

   (1)(A)    Paying for child care expenses for employees;
   (B)       establishing or expanding a child care program that is primarily used by employees;
   (C)       paying for referral services that connect employees to child care providers; and
   (D)       providing for collaborative child care investment with other employers.

Newly enumerated subsection (a)(2) provides the amount of the credit is 75% of the total amount
expended in Kansas during the taxable year by the employer (taxpayer).

  Newly enumerated K.S.A. 79-32,190(b) extends the credit to any employer (taxpayer) that

financially contributes to a third party that expands the availability of community child care.
Subsection (b)(1) allows a tax credit for the expenses of:

   (1)(A)    Establishing or expanding a child care program, including support to establish or
             maintain licensing;
   (B)       enabling a program to purchase learning materials or play equipment;
   (C)       compensating professional development for child care staff;
   (D)       providing child care tuition assistance for families in need; and
   (E)       providing referral services that connect families to child care providers.

Newly enumerated subsection (b)(2) provides the amount of the tax credit is:

   (A) 75% of the total amount expended under subsection (b)(1) if the recipient accepts and
       serves children and families receiving a child care subsidy; or
   (B) 50% of the total amount expended under subsection (b)(1) if the recipient does not
       accept and serve children and families receiving a child care subsidy.

   Redesignated K.S.A. 79-32,190(c) limits availability of the credit by providing no credit will

be allowed unless the child day care facility or provider is licensed pursuant to Kansas law.

  Redesignated K.S.A. 79-32,190(d) caps the credit at $100,000 for any taxpayer during the

tax year. It also provides that, for tax year 2027 and all tax years thereafter, the amount which
exceeds a taxpayer's tax liability may be carried over for deduction from the taxpayer's tax liability
in the next succeeding taxable year or years until the total amount of the tax credit has been
deducted from tax liability, except that no such tax credit shall be carried over for deduction after
the third taxable year succeeding the taxable year in which the credit was first allowed.

Redesignated K.S.A. 79-32,190(e) limits availability of the credit by providing the aggregate

amount of credits claimed under this act for any fiscal year shall not exceed $3,000,000.

  Newly enumerated K.S.A. 79-32,190(f) defines the term "community child care" to mean a

for-profit or not-for-profit provider of child care services that is open at least nine hours per day
and located within 45 miles of the employer that is seeking the credit or such employer's offices.

 The provisions of the Bill are effective on July 1, 2026.

                                  TAXPAYER ASSISTANCE

 Additional copies of this notice, forms or publications are available from our web site,

www.ksrevenue.gov. If you have questions about this Notice, please contact:

                               Taxpayer Assistance Center
                             Kansas Department of Revenue
                            Scott Office Building, 1st Floor
                                    120 SE 10th Ave
                                    P. O. Box 3506
                                Topeka, KS 66601-3506
                                  Phone: 785-368-8222
                          Hearing Impaired TTY: 785-296-6461
                                   Fax: 785-291-3614