NOTE: This article has been updated after discussions with the Arkansas DFA.
Think having kids wouldn't pay off? Think again.
A credit is available to Arkansas taxpayers for dependents enrolled in a certified Early Childhood Education (ECE) facility. The credit is worth 20% of the taxpayer's Federal dependent care credit. The credit is in conjunction with the normal dependent care credit allowed to Arkansas taxpayers. in short, a taxpayer with a child enrolled in an ECE facility can get a total credit of 20% of their Federal credit, part of which is refundable.
AR taxpayers are entitled to the normal 20% of their Federal dependent care credit, but if their child attended a certified facility, then their credit is refundable.
In order to claim the credit, the taxpayer must obtain a Form AR1000EC from the certified facility. This form will have the facility's certification number and date certified, which the taxpayer will need both of to complete their return.
It is important to note that not all facilities are ECE certified. Therefore it is important for the taxpayer to request the Form AR1000EC early on so they will know if they are eligible for the credit.