A tax provision in Oregon's 2024 revenue bill offers direct credits to child care businesses that hire—but most owners haven't heard about it yet.
Most Oregon child care owners don't realize that a provision buried in SB1507 (Relating to revenue; and prescribing an effective date) creates a new tax credit specifically for businesses that create net new jobs in the state. If you've been holding off on hiring, this credit could reduce your tax bill dollar-for-dollar.
Under Section 12(2)(a) of SB1507, a child care business can claim $1,000 in direct tax credits for each net new Oregon job created—up to 10 jobs per year, meaning up to $10,000 in annual credits. The credit reduces your income tax or corporate excise tax liability directly, not as a deduction.
There's one requirement: the jobs must pay at least 150% of Oregon's minimum wage. For context, Oregon's minimum wage varies by region and adjusts annually, but 150% means significantly above minimum—roughly $18–$20 per hour depending on location and the current year.
To claim the credit, your business must be certified by the Oregon Business Development Department. The certification process verifies that the jobs are genuinely new positions (not replacements) and meet the wage threshold.
This credit applies to any child care business creating net new jobs during the eligible window. If you've been considering expanding staff—adding a lead teacher, assistant, or administrative position—the credit makes the hire financially easier by reducing your tax liability dollar-for-dollar.
The credit is available for tax years beginning on or after January 1, 2026, and before January 1, 2032. That's a six-year window. If you're planning hires in 2025, they won't qualify; if you're planning them in 2026 or later (through 2031), they may.
If you've delayed hiring due to cash flow concerns, this credit effectively subsidizes wages for new employees. A $10,000 annual credit covers roughly half a year's salary for an entry-level position at the required wage level, or a quarter-year for a higher-paid role.
The credit is capped at 10 jobs per year, so it's designed for businesses growing modestly—not massive expansions. For a typical child care center adding 2–3 staff members annually, this could mean $2,000–$3,000 in direct tax relief per year.
One practical note: you'll need to plan ahead. Certification by the Oregon Business Development Department takes time, so if you're hiring in 2026, begin the certification process early in that tax year.
If you're considering new hires between now and 2031, it's worth understanding the wage requirement and certification process before you post the job. The credit won't apply retroactively, so timing matters.
Your accountant or tax preparer can walk you through the certification requirements and help ensure your new positions qualify. The Oregon Business Development Department administers the program and can answer questions about eligibility.
Source: Oregon SB1507, Section 12(2)(a), Page 3; effective for tax years beginning January 1, 2026, through December 31, 2031.