Form 8882 Credit for Employer-Provided Childcare Facilities and Se

Form

8882

(Rev. December 2006)

OMB No. 1545-1809

Credit for Employer-Provided Childcare
Facilities and Services

Department of the Treasury
Internal Revenue Service

©

Attach to your tax return.

Name(s) shown on return

Attachment
Sequence No.131
Identifying number

1

1

Qualified childcare facility expenditures paid or incurred

2

Enter 25% (.25) of line 1

3

Qualified childcare resource and referral expenditures paid or incurred

4

Enter 10% (.10) of line 3

4

5

Credit for employer-provided childcare facilities and services from partnerships, S corporations,
estates, and trusts

5

6

Add lines 2, 4, and 5

6

7

Enter the smaller of line 6 or $150,000. Estates and trusts, go to line 8. All others report this
amount as follows: partnerships and S corporations, report this amount on Schedule K; all others,
report the credit on the applicable line of Form 3800, (e.g., line 1n of the 2006 Form 3800)

7

8

Amount allocated to beneficiaries of the estate or trust (see instructions)

8

9

Estates and trusts. Subtract line 8 from line 7. Report the credit on the applicable line of Form
3800 (e.g., line 1n of the 2006 Form 3800)

9

General Instructions
Section references are to the Internal Revenue Code.

What’s New
● The tax liability limit is no longer figured on this form.
Instead, it must be figured on Form 3800, General Business
Credit.
● Taxpayers that are not partnerships, S corporations,
estates, or trusts, and whose only source of this credit is
from those pass-through entities, are not required to
complete or file this form. Instead, they can report this credit
directly on line 1n of Form 3800.
● The IRS will revise this December 2006 version of the form
only when necessary. Continue to use this version for tax
years beginning after 2005 until a new revision is issued.

Purpose of Form
Employers use Form 8882 to claim the credit for qualified
childcare facility and resource and referral expenditures. The
credit is part of the general business credit. You may claim
the credit any time within 3 years from the due date of your
return on either an original or amended return.
For details, see section 45F.

How To Figure the Credit
The credit is 25% of the qualified childcare facility
expenditures plus 10% of the qualified childcare resource
and referral expenditures paid or incurred during the tax year.
The credit is limited to $150,000 per tax year.

For Paperwork Reduction Act Notice, see back of form.

2
3

Qualified childcare expenditures are amounts paid or
incurred:
● To acquire, construct, rehabilitate, or expand property that:
1. Is to be used as part of a qualified childcare facility of
the taxpayer,
2. Is depreciable (or amortizable) property, and
3. Is not part of the principal residence of the taxpayer or
any employee of the taxpayer;
● For the operating expenses of a qualified childcare facility
of the taxpayer, including expenses for training of employees,
scholarship programs, and providing increased compensation
to employees with higher levels of childcare training; or
● Under a contract with a qualified childcare facility to
provide childcare services to employees of the taxpayer.
Note. Any expenses for childcare included in qualified
childcare facility expenditures may not exceed the fair market
value of such care.
A qualified childcare facility is a facility that meets the
requirements of all applicable laws and regulations of the
state or local government in which it is located, including the
licensing of the facility as a childcare facility. The following
conditions must also be met.
● The principal use of the facility must be to provide
childcare (unless the facility is also the personal residence of
the person operating the facility).
● Enrollment in the facility must be open to employees of the
taxpayer during the tax year.

Cat. No. 33436Y

Form

8882

(Rev. 12-2006)

Form 8882 (Rev. 12-2006)

● If the facility is the principal trade or business of the
taxpayer, at least 30% of the enrollees of the facility must be
dependents of employees of the taxpayer.
● The use of the facility (or the eligibility to use the facility)
must not discriminate in favor of highly compensated
employees.

Page

2

● Compute your credit for line 2 based on your proportionate
share of qualified childcare facility expenditures giving rise to
the group’s credit for line 2. Enter your share of the credit on
line 2. Attach a statement showing how your share of the
credit was figured, and write “See Attached” next to the
entry space for line 2.

Qualified childcare resource and referral expenditures are
amounts paid or incurred under a contract to provide
childcare resource and referral services to employees of the
taxpayer. The provision of the services (or the eligibility to
use the services) must not discriminate in favor of highly
compensated employees.

● Compute your credit for line 4 based on your proportionate
share of qualified resource and referral expenditures giving
rise to the group’s credit for line 4. Enter your share of the
credit on line 4. Attach a statement showing how your share
of the credit was figured, and write “See Attached” next to
the entry space for line 4.

No Double Benefit Allowed

Specific Instructions

You must reduce:

Line 8

● The basis of any qualified childcare facility by the amount
of the credit on line 7 allocable to capital expenditures
related to the facility,

Estates and trusts. Allocate the credit for employer-provided
childcare facilities and services on line 7 between the estate or
trust and the beneficiaries in the same proportion as income
was allocated, and enter the beneficiaries’ share on line 8.

● Any otherwise allowable deductions used to figure the
credit by the amount of the credit on line 7 allocable to those
deductions, and
● Any expenditures used to figure any other credit by the
amount of the credit on line 7 allocable to those expenditures
(for purposes of figuring the other credit).
Note. For credits entered on line 5, only the pass-through
entity is required to make this reduction.

Recapture of Credit
You may have to recapture part or all of the credit if, before
the 10th tax year after the tax year in which your qualified
childcare facility is placed in service, the facility ceases to
operate as a qualified childcare facility or there is a change in
ownership of the facility. However, a change in ownership will
not require recapture if the person acquiring the interest in
the facility agrees, in writing, to assume the recapture liability.
See section 45F(d) for details.
Any recapture tax is reported on the line of your tax return
where other recapture taxes are reported (or, if no such line,
on the “total tax” line). The recapture tax may not be used in
figuring the amount of any credit or in figuring the alternative
minimum tax.

Member of Controlled Group or Business
Under Common Control
For purposes of figuring the credit, all members of a
controlled group of corporations (as defined in section 52(a))
and all members of a group of businesses under common
control (as defined in section 52(b)), are treated as a single
taxpayer. As a member, compute your credit for lines 2 and
4 as follows:

Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue
laws of the United States. You are required to give us the
information. We need it to ensure that you are complying
with these laws and to allow us to figure and collect the right
amount of tax.
You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books
or records relating to a form or its instructions must be
retained as long as their contents may become material in
the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
burden for individual taxpayers filing this form is approved
under OMB control number 1545-0074 and is included in the
estimates shown in the instructions for their individual
income tax return. The estimated burden for all other
taxpayers who file this form is shown below.
Recordkeeping

2 hr., 37 min.

Learning about the law
or the form

30 min.

Preparing and sending
the form to the IRS

34 min.

If you have comments concerning the accuracy of these
time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions for
the tax return with which this form is filed.