Council Approves Expanded Tax Breaks for Child Care Providers – Mocofeed

“At a time when the need for child care services is increasing, we are seeing across the state of Maryland a decline in licensed providers and a decline in capacity,” said Council President Kate Stewart, who is the lead sponsor of the legislation. “We also know child care continues to get more expensive for both families and providers. I am proud to pass this bill which will provide greater property tax credits to our child care providers, increasing affordability for our current providers and incentivizing new providers to build and operate in Montgomery County.”  

“Access to affordable, quality child care is not just a parenting issue but an economic issue as well. Supporting our day cares is essential to making sure our residents are able to live and work in our County and is key to our economic growth,” Stewart continued. 

During the 2025 Maryland legislative session, the General Assembly passed House Bill 389, introduced by Maryland Delegate Julie Palokovich Carr, enabling Maryland jurisdictions to expand the amount and eligibility of property tax credits to child care providers.  

“Child care is an essential part of economic development. When parents don’t have access to safe and affordable child care, it leads to parents dropping out of the workforce,” Del. Palakovich Carr said. “Meanwhile, many child care providers are small businesses that are struggling. The passage of this tax credit is a meaningful action to making child care more affordable for families and to retaining child care providers in Montgomery County.”  

The tax credit previously covered registered family child care homes, licensed child care centers, licensed day care centers for the elderly, and licensed day care centers for adults. Following the update to the state law, Bill 21-25 expands eligibility for the tax credit to include large family child care homes. 

Additionally, the legislation increases the permitted amount of the tax credit from $3,000 to $10,000. The intent of the bill is to provide targeted tax breaks that will help existing, and new, child care providers stay in operation, while continuing to incentivize construction.  

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“The Children’s Opportunity Alliance applauds Montgomery County for taking the opportunity to revise the property tax credit for child care and day care, based on lessons learned since it was first introduced in 1988,” said Kimberly Rusnak, executive director of the Children’s Opportunity Alliance. “The amendments both improve equitable access to the property tax credit and increase the value of the credit.” 

“By raising the amount of this credit, the County is sending a clear message that it values the educators and small businesses who make it possible for families to work and children to thrive, thus improving our County’s economy. This practical step eases financial strain for providers and strengthens the foundation of our County’s child care system,” Rusnak continued. 

The bill also updates terminology in accordance with state law, among other measures. Council Vice President Will Jawando and Councilmembers Gabe Albornoz, Andrew Friedson, Sidney Katz, Evan Glass, Laurie-Anne Sayles and Dawn Luedtke are cosponsors. 

Additional information is available in the staff report.