In January of 2008 Louisiana began a refundable state tax credit designed to support quality early care and education. This credit is part of a package of tax credits known as the School Readiness Tax
Credit (SRTC). It provides businesses with a dollar-for-dollar refundable tax credit of up to $5,000 for donations to child care resource and referral agencies. These are agencies, contracted by the Louisiana
Department of Education, to provide information and guidance to families and child care providers to help build quality early learning programs. Northwestern State University Child and Family Network is the contracted agency for Northwest Louisiana and has provided this service since 1999.
Click here for information about child care resource and referral agencies.
If you still have questions about the School Readiness Tax Credit, CPR Training, or Other review our list of frequently asked questions or send us a message using the contact form.
What are the School Readiness Tax Credits (SRTC) for Businesses and Employers?
The SRTCs are a package of refundable state tax credits designed to support quality early care and education. Some of these state tax credits are available to businesses and are NOT dependent on whether the business owes state income or corporate franchise taxes. Furthermore, the credit is available for both for-profit and non-profit entities. One of the two types of credits available to businesses is a refundable state tax credit for donations made to child care resource and referral agencies to help centers participating in Louisiana’s Quality Rating System to improve their programs.
What is a Child Care Resource and Referral Agency?
Child Care Resource and Referral Agencies are organizations around the state with which the Louisiana Department of Education contracts to provide services to support families and early childhood programs in designated geographic areas. The child care resource and referral agency for Northwest Louisiana is NSU Child and Family Network. The organization has provided services in the area since 1999.
Click here for more information about child care resource and referral agencies.
What is Louisiana’s Quality Rating System?
Louisiana’s Quality Rating System provides a standard by which parents and stakeholders can measure the quality of an early learning center. The ratings are based on what is known to enhance children’s learning in a developmentally appropriate program. Their rating is based on evaluations that document teacher effectiveness.
How can my business receive a refundable state tax credit for a donation to our local Child Care Resource and Referral Agency?
Simply send your check for up to $5,000 postmarked by December 31 and save the letter you will receive from NSU Child and Family Network to submit with your state tax filing. It’s that easy!
Click here for instructions on how to claim your tax credit.
Which businesses are eligible?
All businesses are eligible to receive these tax credits. A business is defined as any for-profit or not-for-profit entity and includes sole proprietors (so long as the individual is not acting in his or her personal capacity), partnerships, limited liability corporations and corporations. However, it does not include individuals operating in their personal capacity.
How is a tax credit different from a tax deduction?
A tax credit reduces the taxes paid, dollar-for-dollar. A tax deduction lowers taxable income. The SRTC for businesses is a tax credit, not a deduction, and provides full credit for up to $5,000.
Can a not-for-profit business receive these credits as well?
Yes, non-profits will need to register as a business with the Department of Revenue and receive a Louisiana tax ID number. Many non-profits will already be registered and have a state tax ID number because it is needed for withholding purposes for their employees. If for some reason a non-profit does not have a state tax ID number, please go to the Louisiana Department of Revenue website a http://www.revenue.louisiana.gov/ for more information. To claim the tax credits, the non-profit will file a corporate income tax return claiming zeros for income (unless they have unrelated business taxable income) and claiming the refundable tax credits. That process will generate a refund.
What is a refundable tax credit?
A refundable tax credit is one that is available to a taxpayer even if they do not owe any taxes. Refundable tax credits reduce the amount of taxes you owe by the amount of the credit. If the credit exceeds your business’ tax burden, then you will receive a check for the difference. For example, if
your business donates $5,000 and owes $8,000 in state taxes, your state tax bill will be reduced to $3,000. However, if the business owed $2000 in state taxes, it will no longer owe those taxes and your business will receive a check for $3,000. If you have a non-profit business and it does not owe any
taxes, it will receive the full value of the SRTC.
How does my donation benefit my community?
Early learning centers in your area will receive educational materials, training, and other assistance to improve their programs. Employers benefit when quality child care is available so parents can work with confidence and children are helped to build the skills they need in a developmentally appropriate program.
Quality educational programs mean that children are better prepared for school success. As a result, educational attainment goes up and the drop-out rate decreases. These effects are well-documented through extensive research. Quality early childhood pays off in reduced costs of remediation.
How do I submit my check?
As part of a state university, donations for NSU Child and Family Network are made to the NSU Foundation into an account for NSU Child and Family Network Northwest Louisiana School Readiness Project. The address is:
NSU Child and Family Network
1800 Warrington Place
Shreveport, LA 71101
Completing the Donation Form helps us ensure that proper credit is given and that information about your donation is submitted to the Department of Revenue. Make your check payable to the NSU
Foundation. Note that donations must be postmarked by December 31. You will receive a letter from NSU Child and Family Network to document your donation. For additional information, contact Nancy P. Alexander at 677-3176 or NancyA@nsula.edu or your CPA.
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