Tax Blog

February 25, 2009

Deducting Daycare Expenses On Your Federal Tax Return

NOTE: this blog was originally posted in 2009. If you have questions about tax breaks for teachers for 2010 please use our Ask A Tax Question form and we will be able to answer your questions as quickly as possible. Thank you for stopping by FiscalTax.com!

Are your finances tight with the high cost of daycare? Thankfully, the US government sympathizes enough that they have made them deductible, if you fit certain requirements. Qualifying candidates will have one or more children living with them who are under 13 or disabled, will be working at a paying job, a full-time student, or looking for employment during the time that the children are at day care, and must have some income from wages during the year. Also, the person or service they are paying for caretaking cannot be another dependent of the taxpayer. Also, married couples must both be working during the time the children are in care, and they must file jointly to qualify. If you meet these requirements, then up to 3000 dollars for one child, and up to 6000 dollars for two or more children may be deductible from your taxes.

If you are interested in claiming this credit, you will need several pieces of information, in addition to your regular tax information, for your tax preparer. First, you need the name, address, and EIN number (if they are a business, and not an individual) of your day care or caretaker. Next, you need to know the number of months of the year that you qualified. If you were not working or looking for employment for any part of the year, please let your tax preparer know the amount of time that this was true. Also, if your child turned thirteen during the tax year, then they will be eligible for the credit until their birthday. Third, you will need to know how much money was spent on child care during the tax year.
Deducting Job Search Expenses

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21 Responses

Fiscal Tax

03.06.2012

Ela,
You are allowed to claim your child for head of household purposes (In this case your husband cannot claim Head of Household). Therefore, if you claim your child for head of household purposes you may claim the daycare expenses.

Ela Greear

03.05.2012

My ex-husband claims our daughter this year bt I had childcare expenses and she lives with me. I have primary physical care.
can i still deduct me expenses? There were quite high,
Thanks!

Fiscal Tax

02.15.2012

Laura,
In order to claim the credit for child and dependent care, both spouses must show earned income on a jointly filed return. If both spouses, jointly own and operate an unincorporated business, and if both spouses elect, the business may be treated as a "qualified joint venture." (QVC) To make the election, each spouse must file a separate Schedule C and Schedule SE with the return reporting each spouse's profits and losses attributable to the business. In this case, both spouses would show earned income allowing them to claim the credit for child and dependent care on Form 2441.

Laura

02.14.2012

Laura
little7699@yahoo.com
My husbands business is in his name only. He subcontracts through a company. I work with him everyday but our invoices are paid into his account so I dont receive a 1099 only he does. Can we still claim daycare expenses even though I dont have proof of income?

Fiscal Tax

01.19.2012

Rene,

No, but you can amend your 2010 return to claim the 2010 day care expenses. You can only claim 2011 expenses on your 2011 return.

rene

01.18.2012

If I did not clam my child care expenses in 2010 can I claim it in 2011?

Destiny Martoglio

01.16.2012

My husband and I both work and make less than 30,000 a year filing jointly and have paid about $2500 in daycare enpenses. What do you think we might realize from our tax deduction

Fiscal Tax

01.11.2012

If your income is near $55,000, you can take a deduction of 20% of your daycare expenses.

Lauren Fawcett

01.10.2012

I paid almost $3000.00 for my sons first year of daycare in 2011? How much of that can I see coming back in my tax return? My husband and I both work and dont make more than 55,000 filing jointly....?

Fiscal Tax

03.26.2011

You can claim a credit for daycare expenses, but only to the extent your expenses exceed your pre-tax contributions. Typically, the dependent care benefits withheld by your employer will be listed in box 10 of your W2. Since these contributions are pre-tax, you cannot use them to also calculate a tax credit. Only daycare expenses in excess of your pre-tax contributions are eligible to be used for the tax credit. If you are using online or purchased tax software, make sure you correctly complete the W2 screen, including box 10, and use the total daycare expenses paid on the 2441 screen.

lisette

03.25.2011

My child was in daycare the entire year of 2010, and both my husband and I work full-time jobs. Through my job (wife) I have money deducted from my paycheck every pay period for a "dependant care" expense (money is not taxed), and then that money is refunded back into my account. My question is for filing taxes this year (2011), can I use the money that I paid to daycare in 2010 as a deduction? We tried doing out taxes at home, and it said that we do not qualify... Any help would be appreciated!

Fiscal Tax

02.17.2011

Only the custodial parent can deduct eligible daycare expenses. The parent with which the dependent spent the most days, is the custodial parent. The daycare expenses are deducted on Form 2441.

Lori

02.17.2011

I share custody with my ex husband and claim my son every other year on my taxes. I pay 100% of the daycare cost, even on the days my son is in his dad's custody. Can I claim the daycare expenses every year, even when his dad is claiming him on his taxes.

Fiscal Tax

02.03.2011

Sarah,

Since you are the custodial parent and pay the daycare expenses you are eligible to claim the child care deduction. That deduction is claimed on Form 2441.

Sarah

01.30.2011

I have been divorced for 3 years. In my decree it states that my ex gets to claim my child every other year. My question is how do I claim my daughters daycare expense on my taxes when I am not claiming her this year. I pay 100% of her daycare expense and he has visitation every other weekend. Other then that I have her the rest of the time and pay for all of her expenses. Am I able to claim my childs expenses and how do I do that when she is not listed as a dependent.

Fiscal Tax

08.03.2010

See the response, above, dated Feb 8, 2010.

08.02.2010

Do I have to claim the child as a dependent to claim the child care deduction or can her mother take her as her dependent?

Fiscal Tax

03.25.2010

You must pay the expenses in order for you to take the credit. Therefore, you can only claim credit for the expenses you paid for your son's daycare.

03.25.2010

It is stated in our divorce decree that I pay our son's half of the daycare bills and my ex pays for our daughter's. I am the custodial parent so I get the benefit of claiming the childcare credit, but can I claim the total amount for both children since my ex cannot?

Fiscal Tax

02.08.2010

Only the custodial parent, who is claiming the dependency deduction, is entitled to claim the dependent care credit.

Brad

02.07.2010

I divorced this past year and paid $2500 in daycare expenses while my ex-wife paid $1500 in daycare expenses. These expenses were for our only child. If I'm the custodial parent I would assume I get to take the tax credit for the $2500 I paid in daycare expenses, but would my ex-wife be able to get any deduction/credit of any kind on her taxes for the $1500 she spent on daycare?

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