SEED Act Update: We're Working to Get Answers, and We Want Your Questions!
The recently enacted Supporting Early-Childhood Educators' Deductions (SEED) Act is an important step toward recognizing the work of early childhood educators by expanding access to the federal educator expense tax deduction. After hearing from many of you, EveryChild California reached out to Congressman Jimmy Panetta's office, the bill's author, to better understand how the law will apply to different types of early childhood educators and providers. We want to make sure your questions are part of that conversation.
Questions we have raised on behalf of our members include:
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Family Child Care (FCC): Are licensed family child care providers, including those who own and operate their own programs, eligible for the deduction?
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Family, Friend, and Neighbor (FFN) Care: Are license-exempt providers eligible, and are there additional requirements they must meet?
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Public Funding: Does a provider need to receive public funding, such as a state contract or subsidy payments, to qualify? Or are programs supported entirely by private tuition and parent fees also eligible?
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Self-Employed Providers: How does the deduction apply to self-employed providers who already deduct business expenses through Schedule C?
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Federal Guidance: Will the IRS issue additional guidance on these questions, particularly since the deduction applies beginning with the 2026 tax year?
We're happy to share that Congressman Panetta's office has been responsive and has offered to raise these issues with the U.S. Department of the Treasury and to advocate for additional federal guidance if needed. The office has also invited us to share any other questions we hear from the field. There is not yet a timeline for that guidance, but this is a real opportunity to bring your questions directly to the people working on how this law will be implemented, including issues that may not be obvious from the statutory language.
What questions do you have about the SEED Act?
Please email your questions to advocacy@everychildca.org with the subject line "SEED Act Questions" by November 11, 2026. We will share what we receive with Congressman Panetta's office as it works with federal officials to seek clarification.
Please note: EveryChild California cannot provide tax advice. Until federal guidance is issued, we encourage members to consult a qualified tax professional about their individual situation.
Thank you to our members for raising these questions, and to Congressman Panetta's office for its willingness to work with us. We will keep you informed as we learn more!
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