States with the most generous child care tax credits in 2026, ranked
Last updated June 22, 2026 · By Childery · How we computed this
The federal Child and Dependent Care Credit (CDCC) lets parents claim 20–50% of up to $3,000 of child care expenses for one child (or $6,000 for two or more) on their federal tax return — the top rate rose from 35% to 50% for tax year 2026 under the One Big Beautiful Bill Act. It is non-refundable, so it only helps families who owe federal income tax. Most states layer their own CDCC on top of the federal one, but the structure varies wildly. The cleanest dimension is "refundable vs. non-refundable": a refundable state credit pays a family even if their state tax bill is zero, which matters enormously for lower-income families.
As of 2026, 14 states (and DC where applicable) offer a refundable state CDCC, 12 offer a non-refundable credit, and 25 states offer no state-level credit at all. This ranking groups every state by tier and shows the percentage of the federal CDCC each state pays, where states publish a clean percentage. States with independent dollar formulas (Minnesota, Oregon) are flagged separately.
| Rank | What the state credit pays as a share of the federal credit. | |||
|---|---|---|---|---|
| 1 | Arkansas | Refundable | Yes | 20% |
| 2 | Colorado | Refundable | Yes | 70% (federal AGI ≤ $60,000, tax year 2026 onward; 50% for tax year 2025 and earlier) |
| 3 | Hawaii | Refundable | Yes | 50% of qualifying expenses at lower AGI, reduced 1 percentage point per $3,000 of AGI above the threshold, with a 25% floor (per HRS 235-55.6) |
| 4 | Iowa | Refundable | Yes | 30% to 75% on a sliding scale by net taxable income; capped at federal AGI under $90,000 |
| 5 | Louisiana | Refundable | Yes | Up to 50% of the federal CDCC (sliding by federal AGI). The credit is fully refundable for taxpayers with federal AGI of $25,000 or less. For taxpayers with federal AGI of $25,001–$60,000, the credit is nonrefundable but the amount is a percentage of the federal credit. For federal AGI above $60,000, the credit is limited to the lesser of $25 or 10% of the federal credit. Unused nonrefundable credits carry forward up to 5 years. |
| 6 | Maine | Refundable | Yes | 25% (or 50% with a Star 5 Rising Stars for ME provider) |
| 7 | Maryland | Refundable | Yes | Percentage of the federal CDCTC, varies by income |
| 8 | Minnesota | Refundable | Yes | Independent dollar formula (not a percentage of federal CDCC) |
| 9 | Nebraska | Refundable | Yes | 100% of federal CDCC for federal AGI ≤ $29,000 (refundable); 25% of federal CDCC for federal AGI above $29,000 (non-refundable) |
| 10 | New Jersey | Refundable | Yes | 10% to 50% on a sliding scale by NJ taxable income |
| 11 | New York | Refundable | Yes | 20% to 110% on a sliding scale by NY adjusted gross income |
| 12 | Oregon | Refundable | Yes | Independent dollar formula (Working Family Household and Dependent Care Credit — WFHDC) |
| 13 | Pennsylvania | Refundable | Yes | 100% |
| 14 | Vermont | Refundable | Yes | 72% |
| 15 | California | Non-refundable | — | 50% (AGI ≤ $40,000), 43% (AGI $40,001–$70,000), 34% (AGI $70,001–$100,000); not available above $100,000 federal AGI |
| 16 | Delaware | Non-refundable | No | 50% |
| 17 | Georgia | Non-refundable | No | 50% |
| 18 | Kansas | Non-refundable | No | 50% |
| 19 | Kentucky | Non-refundable | No | 20% |
| 20 | Mississippi | Non-refundable | No | 25% |
| 21 | Ohio | Non-refundable | No | Tiered: 100% of federal CDCC for MAGI under $20,000; 25% for MAGI $20,000–$40,000; not available above $40,000 MAGI |
| 22 | Oklahoma | Non-refundable | No | Greater of 20% of the federal CDCC or 5% of the federal CTC; AGI cap $100,000 (MFJ) |
| 23 | Rhode Island | Non-refundable | No | 25% |
| 24 | South Carolina | Non-refundable | No | 7% |
| 25 | West Virginia | Non-refundable | No | 50% |
| 26 | Wisconsin | Non-refundable | No | 100% |
| 27 | Alabama | No state CDCC | — | — |
| 28 | Alaska | No state CDCC | — | — |
| 29 | Arizona | No state CDCC | — | — |
| 30 | Connecticut | No state CDCC | — | — |
| 31 | District of Columbia | No state CDCC | — | — |
| 32 | Florida | No state CDCC | — | — |
| 33 | Idaho | No state CDCC | — | — |
| 34 | Illinois | No state CDCC | — | — |
| 35 | Indiana | No state CDCC | — | — |
| 36 | Massachusetts | No state CDCC | — | — |
| 37 | Michigan | No state CDCC | — | — |
| 38 | Missouri | No state CDCC | — | — |
| 39 | Montana | No state CDCC | — | — |
| 40 | Nevada | No state CDCC | — | — |
| 41 | New Hampshire | No state CDCC | — | — |
| 42 | New Mexico | No state CDCC | — | — |
| 43 | North Carolina | No state CDCC | — | — |
| 44 | North Dakota | No state CDCC | — | — |
| 45 | South Dakota | No state CDCC | — | — |
| 46 | Tennessee | No state CDCC | — | — |
| 47 | Texas | No state CDCC | — | — |
| 48 | Utah | No state CDCC | — | — |
| 49 | Virginia | No state CDCC | — | — |
| 50 | Washington | No state CDCC | — | — |
| 51 | Wyoming | No state CDCC | — | — |
Methodology
Tiering: refundable state CDCC ranks first because a refundable credit pays the family even when state tax liability is zero. Non-refundable credits only reduce a family's tax bill and are worthless to a family with no liability. States with no CDCC sort last (the family is limited to the federal credit).
Where states publish a sliding-scale percentage by income (California, Iowa, New Jersey, New York, Ohio), the percentage column shows the published formula text rather than a single number — clipping to a single percentage would mislead. Use the linked subsidy page for the per-state detail.
Two states (Minnesota, Oregon) operate an independent dollar-formula credit rather than a percentage of the federal CDCC. We flag those as "Independent formula" and link to the state subsidy page for the dollar math.
For the full cross-ranking methodology — data vintages, inclusion rules, and reproducibility notes — see How Childery computes its state rankings.
Sources
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