Form IT-652: New York Employer-Provided Childcare Credit (Tax Year 2025) Explained

Form IT-652, Employer-Provided Childcare Credit, is used by New York State businesses and individuals to claim a state tax credit tied to helping employees pay for childcare. It’s issued by the New York State Department of Taxation and Finance and applies to Tax Year 2025. If your business either pays for childcare services on behalf of employees or contributes toward the cost of building and running a childcare facility, this form is how you turn that spending into a real reduction in your New York tax liability.

The credit itself is based on New York’s version of the federal employer-provided childcare credit, but it’s calculated and claimed separately on your state return. It’s designed to reward employers who invest in childcare support as an employee benefit, whether through direct payments to a childcare provider, contracts with a facility, or the construction and operation of an on-site daycare center for employees’ children.

Who Needs Form IT-652

This form is relevant to New York taxpayers who are subject to tax under Article 9-A (corporations), Article 22 (personal income tax, including sole proprietors and partners), or Article 33 (insurance corporations), and who incurred qualified childcare expenditures during the tax year. That generally includes:

• Employers who paid a third-party childcare provider to reserve or provide space for employees’ children
• Employers who built, expanded, or operated a qualified childcare facility for their workforce
• Partners, shareholders, or members of pass-through entities (partnerships, S corporations, LLCs) that generated this credit and passed it through to individual owners

If your business doesn’t offer any childcare-related benefit or facility, this form simply won’t apply to you. It’s a niche credit, but for employers in industries with high employee turnover or family-heavy workforces, it can represent a meaningful offset against state tax owed.

When You Use Form IT-652

You file Form IT-652 with your New York State tax return for the year in which the qualifying childcare expenditures were made. For most filers, that means submitting it alongside your 2025 return during the standard filing season. The credit is nonrefundable, meaning it can reduce your tax liability to zero but won’t generate a refund beyond what you owe. However, any unused credit amount can typically be carried forward to future tax years, which is worth tracking carefully if your childcare-related spending fluctuates year to year.

Corporations, individuals, and pass-through entity partners all use the same base form, but the way the credit flows through depends on your entity type. Partnerships and S corporations calculate the credit at the entity level and then pass each partner or shareholder their share, which they report on their own IT-652 filed with their personal return.

How to Get and Fill Out Form IT-652

The form is available directly from the New York State Department of Taxation and Finance as a fillable PDF, meaning you can complete it digitally on your computer before printing or attaching it to your electronic filing. There’s no need to print a blank copy and fill it out by hand unless you prefer to.

When completing the form, you’ll need documentation of your qualified childcare expenditures for the year, including invoices, contracts with childcare providers, or records of facility construction and operating costs. The form walks through the calculation step by step, applying the appropriate percentage to your qualifying expenses and capping the result according to New York’s current credit limits. Double-check the entity type section at the top of the form, since corporations, individual filers, and pass-through entity partners each have slightly different lines to complete.

Once calculated, the credit amount transfers to the appropriate tax credit summary form for your return type, so IT-652 isn’t typically filed as a standalone document. It works alongside your main New York return, similar to how other state-specific credits like the one described in Form IT-649 for farm donations to food pantries get incorporated into a full filing package. Employers already familiar with New York’s broader menu of business credits, including the one covered in our guide to Form IT-647 for farm workforce retention, will find IT-652 follows a similar structure: identify qualifying expenditures, apply the statutory percentage, and carry the result to your main return.

Keep your supporting documentation for at least the standard state audit period, since the Department can request proof of the childcare expenditures claimed. Accurate recordkeeping now saves considerable back-and-forth if your return gets flagged for review later.