“I would like to see a tax credit for companies investing in child care for their workforce to incentivize more businesses to consider helping meet this need for their employees,” she said at the time.
The proposal passed the New Hampshire House on Thursday in a voice vote, after receiving a unanimous recommendation that it pass from the House Ways and Means Committee.
Eligible businesses would be able to get a tax credit for 50 percent of certain qualifying expenditures, such as the cost of purchasing or constructing a child care facility and operational expenses for the first two years related to the new seats.
The business would then be able to get a credit on its business profits taxes or business enterprise taxes.
The bill also sets a cap so the state wouldn’t approve more than $5 million in the tax credit program in a given year to address concerns about how much revenue the state might forgo.
The proposal would take effect on July 1, 2026, if it gains approval from the Senate and the governor.
Currently, waitlists for child care around the state range from six months to three years, according to Natch Greyes, vice president of public policy at the Business and Industry Association of New Hampshire, the statewide chamber of commerce, which supports the proposal.
Businesses are concerned about the child care shortage because it can hamper their ability to recruit and retain employees, said Greyes.
He told lawmakers during testimony in February that the bill would allow capital to flow into this area of the economy and help solve the shortage.
Trina Ingelfinger, a policy director at the health advocacy organization New Futures, also testified in support of the proposal.
Ingelfinger said the state is short more than 9,000 child care slots, and the number of licensed programs has declined by about 11 percent in the last decade, creating child care deserts in some parts of the state.
“We’re starting to see that child care shortages are affecting our state’s ability to attract and retain a stable workforce,” she told lawmakers in February.
She said this proposal is part of the solution. “It creates meaningful incentives for businesses and will yield high returns for families and the state,” she said.
The lack of child care is costing the state, an economic analysis by the New Hampshire Fiscal Policy Institute found. The 2025 study found that businesses lost between $36 million and $56 million as a result of reduced productivity and workforce disruptions, while New Hampshire families lost an estimated $114 million to $178 million in earnings because of inadequate child care availability.
The state also lost out on state and local tax revenues, which could have been reduced by $9 million to $14 million, the study found.
Jess Carson, director of the center for social policy in practice at the University of New Hampshire, called this tax credit “an important lever” in addressing the state’s child care shortage, although, she said, it’s hard to identify the specific impact it would have if enacted. And, she said, this kind of investment can only lead to new supply if there are enough early childhood educators to staff the new spaces.
“However, even small strides can make a big impact locally,” she said.
“For a small community without a child care program, this kind of investment could bring a major impact,” she said.
Amanda Gokee can be reached at amanda.gokee@globe.com. Follow her @amanda_gokee.
