HUNTSVILLE — Legislation that helps businesses provide child care service to employees is increasing the state’s workforce participation, according to its sponsor, Alabama House Minority Leader Anthony Daniels.
The Huntsville lawmaker sponsored the Alabama’s Child Care Tax Credit that became law Jan. 1. The legislation creates tax credits for employers providing on-site child care or stipends for child care expenses, in addition to credits for child care facilities and donors contributing to nonprofit child care providers.
“The Child Care Tax Credit has provided opportunities for industry to develop and build their own facility on site for their employees,” Daniels (D-Huntsville) said last week at the Alabama Legislative Update in Huntsville. “We’ve been focusing a lot of our attention on increasing the workforce participation rate.
“This is one of the many pieces of legislation that has really supported increasing our workforce participation rate by providing incentives for families that are reentering the workforce, mothers that are re-entering the workforce, but being able to have childcare and the opportunity for child care on-site while partnering with a provider.”
Daniels said industries are partnering with providers to provide child care to offset the cost.
“That serves two purposes,” said Daniels. “It gives them access to high-quality child care because the quality of the child care determines how much of a tax credit you receive. It also serves the purpose of education and closing the achievement gap. It gives an opportunity for us to increase the workforce participation rate.
“That’s something that is in place right now for those industries that are out there that are looking for ways to offset some of the costs. These are incentives that are provided by the state of Alabama.”
In 2022, prior to the establishment of the child care tax credit, nearly 85,000 Alabama families who needed access to child care had no reliable local and affordable options. The average weekly cost for infant/toddler childcare in Alabama was $139 as of 2021, which represented approximately $556 a month, or $6,672 a year.
