SOUTHERN MARYLAND — Counties and municipalities in Maryland now have a new tool to support child care providers, thanks to recently enacted legislation — House Bill 389 / Senate Bill 516 — approved during the 2025 Maryland General Assembly session.
The new law, effective June 1, 2025, authorizes local governments to grant property tax credits of up to $10,000 per property for real estate used as a child care center, family child care home or large family child care home. The measure was sponsored by Del. Julie Palakovich Carr and Del. D. Jones, and cross-filed by Sen. Nancy King.
Under the law, counties may also provide up to $10,000 in property tax relief for businesses that offer on-site child care for employees, provided the employer has at least 25 staff. Personal property used in certain large family child care homes is exempt from local valuation and taxation.
The legislation significantly expands the local authority. Previously, jurisdictions could offer a property tax credit of up to $3,000 annually and only for certain types of providers. HB 389 broadens the credit amount and the range of eligible child care operators.
The Maryland Association of Counties (MACo) supported the bill, citing its potential to strengthen local child care infrastructure, support working families and reduce workforce strain caused by limited child care access.
What Providers Should Know
While the new law allows counties and municipalities to offer property tax credits for child care providers, it is not mandatory. Implementation requires local legislative action.
With a challenging new fiscal year underway, many counties are managing limited resources and competing priorities. Now is an essential time for providers to begin advocating for the inclusion of this credit in future budget discussions.
To read the full bill, visit the Maryland General Assembly’s official HB 389 bill page.
Learn more about child care provider resources and licensing at the Maryland State Department of Education’s Early Childhood Division.
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