Tax Credits &
Training Subsidies
Presented by Good Work Network
through funding from the
Department of Social Services,
Child Care & Early Childhood Education Division
Table of Contents
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School Readiness Tax Credit & QRS
Housing Credits
Hiring Incentives – WOTC, WtW, OJT, Job1
Renewal Communities
LA Pathways Training Program
Incumbent Worker Training Program
Dealing with costs of the QRS
School Readiness Tax Credit
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What
Credits given to child care providers, parents, teachers, and
businesses, receipt of credits based on participation in QRS
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Purpose
Designed to improve centers and quality of child care
available thereby improving children’s school readiness,
school performance, and later in life high school graduation
rates and job performance.
http://www.goodworknetwork.org/pppresent/pptlinks/TaxCredits
SchooReadiness.pdf
Available 2008
School Readiness Tax Credit
START TIME:
This tax credit will not be initiated until January 1, 2008.
Some things to be considering in the mean time:
* Familiarize yourself with the Quality Rating System @
www.qrslouisiana.com, Agenda for Children
* Schedule an appointment with a Technical Advisor from
Agenda for Children (504) 586-8509
* Apply for QRS – Linzi Conner (504) 988-7829
* Request a Mental Health Consultant
(Call Marylynn Gagnon (504) 988-7387)
* Make sure all employees are enrolled in LA Pathways
Available 2008
Technical Advisors
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Will meet with centers whether they are
applying for QRS or not
Can explain QRS one-on-one
Will do site visits and make suggestions to
help get you ready
Once QRS assesses you they give your
score to the Technical Advisors (are
intermediaries between QRS and providers)
Mental Health Consultant
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Consultants are trained in child psychology,
development, and health and can answer
questions about children’s development and
functioning
They observe center functioning and will provide
suggestions of how to respond to any
determined issues
They are familiar with QRS requirements and
can offer guidance on how centers can become
more compliant
Services are free for providers
QRS
System that assigns centers a star rating between
1 and 5 to designate its quality and competence
in a number of areas.
The system rates centers based on points given
for qualifications in four components:
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Administration Practices
Family & Community Involvement
Program
Staff Qualifications
QRS Ratings
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Achieving star ratings is a process
The system is not designed for providers
to immediately receive
5-stars
Based on ITER-S/ECER-S (a social-
emotional instrument used to determine the
quality of child care)
http://www.goodworknetwork.org/pppresent/pptlink
s/QRSModel.doc
1 - Star
First step – get up to licensing standards
 1 – star requirements are simply meeting
basic requirements of licensing
 Any citations must be corrected by time
licensing comes back, then automatically
achieve 1-star rating
 There are no tax incentives for 1-star centers
2 - Star
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QIC (part of the QRS)
They come in by appointment
They only like to meet with you after you
have met with Technical Advisors
If not approved there is an appeal
process…they can come back…time limits
not yet determined
*Many providers get stuck at 2-stars because they do not offer benefits.
Staff must be registered with LA Pathways.
3 - Stars
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Actual QRS assessors come in by
appointment and perform site visit
Only done after centers have been granted 2stars by QIC
QRS reports your score to Agenda and
Agenda will report to providers
If not granted above 2-stars, there is an
appeal process but time frame has not yet
been finalized (could be a year)
Benefits of Getting Started Now
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Lots of supports set in place right now
QRS is optional, but in future many grants and
incentives may only be offered to centers who are
participating in the QRS.
School Readiness Tax Incentives are only available
to providers in QRS and amount of credit increases
as your center’s star rating increases, SRTC
incentives will increase a center’s income
Good employee recruiting and marketing tool
What are Tax Credits?
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A tax credit is a reduction in the amount of
taxes a taxpayer owes.
For example, if a person receives a tax credit
of $1500 it would decrease the amount owed
to the IRS at tax time by $1500, allowing the
taxpayer to save money.
In the case of a center this can almost be
viewed as earned income.
School Readiness Tax Credits
Benefits to Providers:
Star Rating of Center
5 star
Proposed Tax Credit (per
child on Child Care
Assistance)
$1500
4 star
$1250
3 star
2 star
1 star
$1000
$750
No credit
How Credits Will Work
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No paper work will be necessary
DSS automatically reports center’s info to the
Dept. of Revenue (# children enrolled and
center’s * level) – this determines how much
there credit is
Copy of this report also goes to centers and
they record credit amount on taxes, but no
forms or paperwork
Benefits to Parents
>Incentive for parents to place their children in
centers which have higher star ratings
Star Rating
of Center
Increase
Max credit Max credit for
to existing per child 2 or more
credit
children
5 star
200%
$1575
$3150
4 star
150%
$1313
$2625
3 star
100%
$1050
$2100
2 star
50%
$788
$1576
Note: The center’s rating affects the tax credit to the parent.
How Credits Will Work
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Augments already existing state childcare tax
credit
Only need to verify star level of center
through receipt that will be given to them by
center
Benefits to Teachers
>A credit between $1500-$3000, depending on the
teachers level of education
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Designed to increase retention of qualified
teachers
Acknowledges that centers face difficulties in
recruiting and retaining highly qualified workers
Tax systems have been seen as efficient and
effective ways to implement wage supplements
Note*$1500-$3000 will increase yearly with inflation
Available 2008
Teachers
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*Note* teachers get credit for working in any
center that is simply participating in QRS
Unlike other portions of credit, amount of
credit is not based on star level of center,
rather on teacher’s education level
Retention - teachers can only get credits after
6 months of employment at one center
Recruitment – attract teachers due to QRS
participation
Benefits to Businesses:
-Businesses can receive a tax credit for eligible
expenses including:
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Construction, renovation, or expansion of a child care center
Equipment purchased for a center
Maintaining or operating a center
Subsidizing child care for employees
*May be opportunity here for approaching
businesses for help/support.
Available 2008
Benefits to Business
Star rating of Center
Proposed tax credit
5 star
20% of eligible
expenses
4 star
15% of expenses
3 star
10% of expenses
2 star
5% of expenses
1 star
No tax benefit
School Readiness Tax Credit...Refer to
Attachment A
Historic Preservation Tax
Incentives
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Residential Rehabilitation Credits
Commercial Restoratation Credits
Restoration Tax Abatement
Residential Rehabilitation Tax Credit
>credits available for renovations of old &
historic buildings to be used as a residence
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Up to 25% tax credit for rehabilitation of a
building being used for personal residence
Exact amount of credit is determined by the
renovator’s Adjusted Gross Income
state tax credit info and application.pdf
Restoration Credits
>credits available for renovations of old & historic
buildings to be used for commercial purposes
26% rehabilitation credit is available for the
rehabilitation of a certified historic structure.
*Costs of renovations must exceed $5,000.
(May include buildings built after 1936.)
 10% rehabilitation credit is available for the
rehabilitation of non-historic buildings built
before 1936 that are to be used for
commercial, non-residential purposes.
http://www.goodworknetwork.org/pppresent/pptl
inks/TaxCreditsIMH.doc
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Restoration Tax Abatement
>further incentive to rehabilitate an old facility
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Usually the value of a house increases when
it is rehabilitated and so do property taxes,
leading to greater expenses for the owner.
The Restoration Tax Abatement freezes
property tax values at pre-improvement levels
for five years.
Employment Incentives &
Training Subsidies
 Job1
& OJT
 WOTC & WtW
 Renewal Communities
 LA Pathways
 IWTP/SBET
Job1 & On-the-Job-Training (OJT)
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Adult and youth programs
They will pay for employees training
They will pay for between 50% and 100% of
employees salary for 6 months
Aimed at getting target groups into quality
and long-term employment
Job1
Youth ages 14-21, employment really
focused on 18-21 year olds
 Youth must be enrolled in Job1
program
 ‘work experience contracts’
http://www.goodworknetwork.org/pppre
sent/pptlinks/Job1.doc
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Job1 & OJT – Adult Program
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Similar to Job1, except adults do not have to
meet eligibility requirements to be enrolled in
the program
OJT pays 50% of employees salary for 6
months
Job1 pays 100% salary for 6 months
Depends on skills/qualifications of employee /
employer’s risk
Work Opportunity Tax Credit (WOTC)
& Welfare-to-Work tax Credit (WtW)
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Two hiring incentives for employers designed
to get target populations into quality and longterm employment
Employees must be from one of nine target
groups to qualify
To show up on 2008 taxes, employees must
be employed before 12/31/2007
Work Opportunity Tax Credit
A tax credit for employers of up to $2,100
per WOTC employee hired (up to 35% of
first $6,000 of wages).
*Wages paid under On-the-Job-Training (OJT) are not
eligible for reimbursement, but if the WOTC paperwork is
completed on or before the employee's first day on the
job, WOTC eligible wages may begin the day after OJT
ends, but not to exceed 12 months from hire date.
*Employee must work 400 hours or 180 days for employer
to be eligible for reimbursement. The period worked
under OJT does count towards this time.
Work Opportunity Tax Credit
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Benefits to Business
 Up to $2,400 for each new adult hire;
 $1,200 for each new summer youth hire
Tax Credits - WOTC.doc
Qualifying Employees
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Nine target groups hired on or after 1/1/07:
1) Veteran who is a member of a family that is
receiving or recently received Food Stamps
2) Recipient of Supplemental Security Income (SSI)
benefits
3) Vocational Rehabilitation Referral who completed
or is completing rehabilitative services
4) Ex-felon who has a hiring date which is not more
than one year after the last date of
conviction/released from prison
Qualifying Employees
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Member of a family. . .
5) Receiving or recently received Temporary
Assistance to Needy Families (TANF) for at least 18
consecutive months ending on the hiring date
6) Received TANF benefits for any 9-month period
during the 18-month period ending on the hiring
date
7) Received Food Stamps
Qualifying Employees
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Resident of. . .
8) 18-24 year old resident of one of the federally
designated Empowerment Zones (EZs),
Enterprise Communities (ECs), or Renewal
Communities (RCs)
9) A 16-17 year old EZ/EC or RC resident must
work at least 90 days between May 1 and
September 15 as a Summer Youth Employee
Work Opportunity Tax Credit...Refer to
Attachment D
Welfare-to-Work
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As much as $8,500 over two years for each
new hire
35% of qualified wages for the first year
 50% of qualified wages for the second year
(*Qualified wages are capped at $10,000/year)
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Regulations
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There is no limit on the number of workers
who can qualify
WOTC and WtW can not be claimed for the
same employee
Forms must be filed within 28 days of hiring
employee
For for-profit businesses only
Renewal Communities
Credit of up to $1,500 for each employee who
lives and works in a Renewal Community
 Applicable to both new hires and existing
employees through 2009
 File Form 8844 as part of your regular tax
filing
http://www.goodworknetwork.org/pppresent/pptl
inks/RenewalCommunity.doc
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Renewal Communities
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Renewal Communities (RCs) are distressed areas in
urban and rural communities that the federal
government has targeted for development and
where businesses are eligible for tax incentives.
These incentives help to spur business and job
growth in communities that have been suffering from
high levels of poverty and unemployment.
Businesses can claim the tax incentives by
operating in, and hiring residents who reside in
these areas.
Renewal Communities
Check if your address is in a renewal community:
www. hud.gov/crlocator
1-800-998-9999 or 1-202-245-1299
Renewal Communities
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Orleans Parish only
Business and employee must reside in
Renewal Community
Can not be applied to relatives who work
for you
No limit on number of employees who can
qualify
LA Pathways
Providers must be enrolled in the LA
Pathways Child Care Career
Development System to participate
Subsidizes training for providers and
employees – (reimbursements go straight to
training provider)
 Creates a career ladder – lets you and others
know your qualifications
Visit: http://www.pathways.louisiana.gov
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LA Pathways
Enrollment in System is free and easy
 Download enrollment form from internet or
call to request one by mail, fill out and return
by mail or fax
 Pathways offers scholarships for CDA
assessments, Family Child Care Home
Accreditation, and college courses
Enrollment form: LA Pathways - EnrollmentForm.pdf
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Incumbent Worker Program
>Help available to pay for staff training
Reimbursements of up to $3,000 per
employee per year can be granted to
providers whose staff completes
accepted training
 Compensation paid directly to employer
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Incumbent Worker Program
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Benefits to Child Care Centers
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Recruitment and retention
Sustainable competitive advantage of center
Increased productivity
Increased profitability
Helping staff meet QRS requirements
Helping centers meet basic licensing
requirements of training hours
Incumbent Worker Program
Application Process:
 Determine which training is needed and
which training provider you will use
 Complete SBET application [SF-424 Appendix
A & B - available online] &Technical application
 Training costs are reimbursed after training
has been completed and documentation is
submitted.
Incumbent Worker Program...Refer to
Attachment C
Costs Associated with QRS
In long run credits are seen as way to
cover some of the costs and help pay
for things like employee raises
 Some grants are available to help offset
some of the costs
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Grants Available for
Renovations and Equipment
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DSS Repair & Improvement Grants
>Up to $10,000 for building renovations, repairs, improvements
(Class A or have pending application, must have children on assistance)
http://www.goodworknetwork.org//pppresent/pptlinks/RepairImprovementFA
Qs.pdf
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Institute of Mental Hygiene Mini-grants
>Up to $15,000 available for equipment, training, programs
(Orleans parish only, center must have been operating before Katrina)
http://www.goodworknetwork.org//pppresent/pptlinks/TaxCreditsIMH.doc
Other Funding Available
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Quality Incentives
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Bonuses available for Class A, NAEYC accredited centers
http://www.goodworknetwork.org//pppresent/pptlinks/QualityIncentivesProgr
am.pdf
THANKS
QUESTIONS?