Schedule ECC: Schedule ECC - Employer Child Care Contribution Credit (2025)
North Dakota · ND Tax Commissioner · Used for tax years 2025
North Dakota Schedule ECC calculates the 2025 Employer Child Care Contribution Credit. It reports qualifying employer contributions toward employees’ child care costs, computes a credit of 50% of contributions limited to $1,000 per employee, and includes credits received through
Who files this form
Use 2025 Schedule ECC to calculate the Employer Child Care Contribution Credit if you are a qualified employer claiming the credit. Corporations, individuals, estates, trusts, and passthrough entities may qualify.
A qualified employer must:
- Have made a child care contribution during the tax year.
- Have offered all employees with child care costs an equal opportunity to receive an equal contribution. Completing the schedule attests that you meet this requirement.
The contribution must pay a qualified provider or reimburse an employee for qualifying child care costs that enable the employee to work for the employer.
Passthrough entities calculate the credit at the entity level and pass it through to owners based on their respective interests. If your only credit comes from an interest in a passthrough entity, skip lines 1–3 and begin with line 4.
For corporations included on Form 40, Schedule CR, each corporation claiming a credit must complete a separate Schedule ECC.
What you'll need
Have the following information ready:
- Your taxpayer name as shown on the return and Social Security number or FEIN.
- The employer name and FEIN used for North Dakota quarterly payroll reporting, if different from the income tax taxpayer information.
- Each qualifying employee’s name and last four digits of their SSN or ITIN.
- Each qualified child care provider’s name and city.
- Qualifying contributions for each employee, limited to $1,000 per employee.
Attach copies of all North Dakota Schedules K-1 used to claim credit on line 4.
If you have more than 10 qualifying employees, use additional Page 3 Supplemental Worksheets. Also use a separate worksheet for each separate employer if you have more than one. You may instead provide a schedule containing the same information required by the worksheet.
How to file
Attach Schedule ECC to Form ND-1, 38, 40, 58, or 60.
To complete the credit calculation:
- List qualifying employees, providers, and contributions on line 1 and any supplemental worksheets.
- Total the main table on line 2a and supplemental worksheets on line 2b. Add them on line 2c.
- Multiply line 2c by 50% on line 3.
- Enter credit from North Dakota Schedules K-1 on line 4 and attach copies. If this is your only credit, skip lines 1–3.
- Add lines 3 and 4 on line 5.
Transfer line 5 to the applicable location:
- Form ND-1: Schedule ND-1TC, line 10.
- Form 38: Schedule 38-TC, line 8.
- Form 40: Schedule TC, line 17, or Schedule CR, Part III, line 17.
- Form 58: Schedule K, line 25.
- Form 60: Schedule K, line 22.
Common mistakes
- Including ineligible payments: Contributions do not include payments from an employee’s flexible spending account or similar salary redirection arrangement. Payments to unlicensed providers are not eligible.
- Exceeding the contribution limit: Include no more than $1,000 of qualifying contributions per employee.
- Using the wrong contribution period: The credit is based on contributions during the taxpayer’s income tax year, including a fiscal tax year.
- Expecting a refund or carryover: Credit exceeding the tax is not refundable and cannot be carried over to later tax years.
- Omitting required identifying information: The form warns that failure to provide the required Social Security number may delay or prevent processing.
Questions people ask
How much is the credit?
The credit is 50% of qualifying child care contributions during the tax year, with contributions limited to $1,000 per employee. Any credit exceeding the tax is not refundable and cannot be carried forward.
Can I reimburse an employee instead of paying the provider directly?
Yes. A contribution may be a payment to the child care provider or reimbursement to the employee for qualifying child care costs.
Can a provider outside North Dakota qualify?
Yes. A substantially similar provider licensed by another state can qualify if it provides early childhood services within 10 miles of North Dakota. North Dakota providers must be licensed under N.D.C.C. Chapter 50-11.1.
What if my only credit comes from a passthrough entity?
Skip lines 1–3 and enter the total credit from your North Dakota Schedules K-1 on line 4. Attach copies of those schedules, then complete line 5 and transfer the credit to the applicable return or schedule.