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Legislature Helping Child Facilities Cope with Coronavirus Closings

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LITTLE ROCK – At the beginning of this year, there were more than 2,000 licensed child care programs in Arkansas. They had slots for 194,000 children.

By mid-April, about half the facilities had closed. Although most have been able to re-open, as of early October at least 20 had closed permanently. They had slots for more than 1,140 children.

The numbers change every day, according to the state director of the Division of Child Care and Early Childhood Education. She reported to lawmakers about the impact of the pandemic on child care facilities and the families that rely on them.

The official statistics support what working parents already know. It is more difficult than ever to find affordable child care of high quality.

Many child care programs had to close because they struggled to hire staff. They had to limit groups of staff and children to 10 or fewer people. Staff are required to wear masks.

From March through early October, 416 workers at child care facilities contracted Covid-19. During that same period, 273 children tested positive for the virus. Those numbers continue to go up, generally at a steady ratio of two workers for every child.

Before the pandemic there had been about 400 facilities that did not have children whose child care was subsidized by the government. According to the director, several hundred have taken steps to participate in child care assistance programs.

Arkansas has received federal relief assistance to pay for grants and loans to people and businesses especially hard hit by the pandemic.

In late March, the Division increased the amounts of vouchers by $10 for each infant or toddler and $7 for each child in pre-school. Vouchers for school aged children in after school care went up $5 per child. The increased value of vouchers in Arkansas has cost the government about $11 million to date.

The state Division of Child Care has distributed about $26 million so far to help facilities and families. For example, about 6,000 families are getting financial assistance for child care because one of the parents is considered an essential worker. Those jobs are in health care, sanitation, the food supply chain, child care and education and emergency response.

More than $6 million in relief funds have paid for thermometers, cleaning supplies, masks and protective equipment that are now required by child care facilities.

At the same legislative meeting in which lawmakers heard about the effect of the pandemic on child care facilities, a state tax official reported on the extent of tax credits now available to families with children in care.

The state offers an individual income tax credit of 20 percent of the allowable federal credit. In the past two years, more than 50,000 Arkansas taxpayers took advantage of the state credit. It is claimed on line 35 of the Arkansas return.

In 2018, a total of $6.3 million in credits was claimed by 54,007 Arkansas taxpayers. In 2019 a total of 51,254 taxpayers claimed $6 million in child care credits.

Arkansas also offers an early child care tax credit for dependent children in an approved day care facility. It also is equal to 20 percent of the allowable federal early child care credit. It is on line 43 of the Arkansas return.

About a thousand taxpayers a year claim it and saved from $114,000 to $137,000 on their taxes the past two years. A taxpayer may not claim both the child care and the early child care credits.

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72201-1090