Jump The Curve
Reliable child care can determine whether a parent accepts a job, arrives for a shift or stays with an employer. A well designed employer program can expand access to care while giving the business a clearer way to manage turnover, absence and coverage costs.
The Jump The Curve model provides a comprehensive, cost effective and 45F-eligible solution through a turnkey near site child care program. Employers investing in Jump The Curve have the opportunity to secure reliable, high-quality child care for their employees, claim 45F credit, and aid their image in the local community.
Section 45F for 2026 and Later
Employers can claim Section 45F federal tax credits for expenses made to construct or develop child care infrastructure or to provide child care benefits for their employees. The limits on the credits are:
40% of qualified child care expenditures
Most employers calculate 40 percent of qualified child care expenditures. An eligible small business calculates 50 percent. Employer status should be confirmed for the applicable tax year.
10% of qualified resource and referral expenditures
Qualified resource and referral expenditures remain eligible at 10 percent. The spending must be under a contract for services that help employees find child care and must satisfy the nondiscrimination rule.
$500,000 or $600,000 for an eligible small business
For 2026, the combined credit is capped at $500,000 for the taxpayer, or $600,000 for an eligible small business. The limits are indexed for inflation after 2026. Related employers may be treated as one taxpayer for this purpose.
Why Pooled Investment Exists
Employers often struggle to recruit and retain qualified employees because they lack reliable access to child care. Employers possess the tools to help enable greater retention for their employees through 45F, but they are unable to efficiently take advantage of these credits. A single employer can only claim a maximum credit of $500,000 to $600,000 per year, meaning an employer spending $5,000,000 would still only receive $500,000 in credit for the entire expenditure. New changes in these investments allow for pooled investment into child care facilities.
Jump The Curve projects seek two types of 45F-eligible investment in local child care infrastructure: investment into a new turnkey managed child care facility, and annual benefits for their employees. Employers harness the 45F eligible investments to offset their tax liabilities, and can also benefit from reduced absenteeism and increased productivity for their employees.
What may qualify
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Depreciable or amortizable property acquired, constructed, rehabilitated or expanded for use as part of a qualified child care facility
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Operating costs of a qualified child care facility, including certain training, scholarship and compensation costs for child care staff
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Amounts paid under a contract with a qualified child care facility to provide care for employees
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Amounts paid under a contract with an intermediary that contracts with one or more qualified child care facilities
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Amounts paid under a contract for qualified child care resource and referral services
Why Jump The Curve?
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Efficient use of 45F-eligible capital compared to constructing a standalone facility
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Near site child care center reduces employer liability for the child care center
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Reduced employee absences and increased employee productivity. A BCG study of five US companies found returns on investment of up to 425% from employer-provided child care benefits.
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Jump The Curve projects provide turnkey facility management
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Support providers in sustaining quality child care for employees and the local community
Workforce Costs From a Lack of Quality Child Care
Each employer is unique but the issues are widespread. Each employer experiences inefficiencies and productivity losses to working parents compensating for unreliable child care.
Recruiting and replacement
Vacancies are often linked to child care barriers and increased recruiting, advertising, screening, onboarding, and training expenses while a role is open.
Unplanned absence
Unreliable care can force employees to face difficult decisions that lead to missed hours, late starts and reduced schedules.
Coverage and overtime
Open roles can lead to large overtime premiums, temporary staffing, supervisor coverage and production or service delays that employers must account for.
Net program cost
An investment into employees' child care can have a significantly lower net cost when considering 45F-eligible tax credits in structuring investments.
What a Jump The Curve Project Requires
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Employers must have a tax liability, which is to say the employer must owe taxes
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Employers must provide annual child care benefits to their employees
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Employers cannot provide the majority of benefits to affiliates or highly-compensated employees
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Employers must understand that all 45F credits have a 10-year recapture period
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Employers have no active role in the Jump The Curve project. They solely supply capital.
Run your own figures through the model
Enter your wages, your headcount and what you would put into a project, and the tool works through the four calculations behind a Jump The Curve investment: the productivity a lack of child care costs you today, the net cost of a child care benefit after the credit, the credit on the facility investment itself, and the ten year picture.
Every figure restates numbers you entered against assumptions you can see and change on screen. It is an estimate for a conversation with your tax advisor, not a forecast and not advice.
Questions Employers Ask First
Traditional child care facilities take 3 to 5 years from inception to operation, but Jump The Curve seeks to begin within 12 to 18 months. Jump The Curve projects are strategically designed to minimize the amount of time needed.
No, Jump The Curve projects are not designed to operate child care centers. Our projects are designed to design and manage child care facilities, so employers can access 45F credits without being responsible for the construction and logistics of a working child care facility.
A referral or contracted care model may be established sooner than a new facility. A new Pennsylvania center can require demand analysis, site and code review, design, permits, construction, operator selection and a Department of Human Services certificate of compliance. A responsible schedule begins after those facts are known.
Employers have a lot on their plates. As part of a Jump The Curve project, employers provide capital and will have no duties in the creation or development of the Jump The Curve qualified child care facility.
Jump The Curve projects are an option, along with any 45F investment option, as long as you have at least 1 eligible employee, have a tax liability, and the majority of benefits are not being provided to affiliates of owners, managers, or officers of a corporation.
Companies with a tax liability can invest in a Jump The Curve project if they qualify and are verified to be eligible for a JTC project. For more information, please schedule a brief introductory call.
The primary risk of receiving 45F federal tax credits is the risk of recapture as described in 26 U.S. Code 45F (d). As described in 45F (d)(2)(a) there will be recapture of the credit if the facility ceases to operate as a qualified child care facility within 10 years of the beginning of the date of operation. Jump The Curve projects have strategies for reducing the risk of these recapture events.
Your employees would not be required to send their children to a Jump The Curve child care facility, but certainly have the option to do so. Employees of companies invested in Jump The Curve projects will have priority access to child care from the provider at the Jump The Curve facility.
The IRS directs employers to Form 8882. In most cases the credit is then reported through Form 3800 as part of the general business credit. The employer should retain contracts, invoices, licensing records and any allocation used for a shared facility. The portion used to calculate the credit cannot also support another deduction or credit, and certain property basis must be reduced.
Learn how Jump The Curve could help your business
Jump The Curve uses 45F-fueled investments to aid employers, employees and child care providers in growing the supply of highly reliable, sustainable, high-quality child care in local communities. If you are interested in this, please contact us.
Valley National Realty provides commercial real estate, development and property management services. This page is general information and is not tax, legal, accounting, licensing or investment advice. Eligibility and credit use depend on the employer's facts, tax year, entity structure, expenditures, tax liability, facility compliance and other requirements. Consult qualified advisors before relying on an estimate or committing funds.