5 States With the Highest Federal Childcare Subsidies

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Federal childcare subsidies have flashed in the news recently, as the Department of Health and Human Services moved to freeze roughly $10 billion in subsidies to five Democrat-led states.

The attorneys general from those states sued the Trump administration, and The Hill reports that a federal judge temporarily restored the funding as the court hears arguments. 

The case raises a curious question however: Which states collect the most federal money for childcare subsidies? More importantly, why do those states collect more? 

States with the Highest Total Childcare Subsidies

A 2026 study by SmartAsset analyzed the total federal childcare subsidies paid out to each state. It then listed the total number of children under age five in each state, and calculated the subsidies per capita for them. 

The five states with the highest total childcare subsidies include:

1. California: $1,472,877,994 ($695 per child) 
2. Texas: $1,407,574,435 ($748 per child)
3. Florida: $1,083,048,050 ($983 per child)
4. New York: $825,191,780 ($782 per child)
5. Michigan: $698,023,298 ($1,300 per child)

States with large populations receive more total childcare funding, of course. But even among the top five states, you can see a broad range of per-child spending. Michigan receives less than half the total amount that California and Texas each collect, but spends nearly double the amount per child.

States with the Highest Per Capita Subsidies

The following five states receive the most federal money per child under five:

1. New Mexico: $187,121,763 ($1,782 per child)
2. West Virginia: $144,429,085 ($1,651 per child)
3. Massachusetts: $487,438,791 ($1,424 per child)
4. Delaware: $70,736,572 ($1,309 per child)
5. Michigan: $698,023,298 ($1,300 per child)

Why do these states collect disproportionately more in childcare subsidies than other states? 

One reason involves income eligibility. Childcare subsidies are intended for lower-income families, not wealthier parents. States like New Mexico and West Virginia have higher poverty rates than, say, California. 

That can’t explain why wealthier states like Massachusetts end up with so much federal funding per capita however. Cost of childcare plays a role, with some states setting a higher reimbursement amount per child. Massachusetts pays the second highest reimbursement rate in the nation at $2,306, according to the Prenatal-to-3 Policy Impact Center. 

States also set their own income eligibility levels, with states like New Mexico setting an easier standard to qualify for funds. The state with the lowest subsidies receives $482 per child — less than a third of what New Mexico and West Virginia collect. 

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