|
|
|
|
|
|
||
|
|
|
|
|
|
||
Child Care - FAQs
Q. I don't have much money; can I get help with the costs of child care?
A. Maybe, depending on your income and the state in which you live. The Child Care and Development Fund is a federal fund that provides the states with money to help low-income working families pay for child care, even if they are not receiving public assistance. States use this money, and sometimes their own state money, to provide subsidies for child care. Subject to a few federal guidelines, each state makes its own rules about which families can receive child care assistance and the amount of child care assistance each family can receive. As a result, the amount of help available to you depends in part on the state in which you live.
For instance, some states guarantee child care assistance to certain families, such as those leaving welfare for work. Others do not guarantee these families that assistance will be available, but give priority to these families in deciding how to distribute available child care funds. Different states make different rules regarding how much money a family can make and still be eligible for a child care subsidy; how much the state will pay a child care provider; and the amount of money a family is expected to contribute as a co-payment for child care costs. Some states choose to give smaller amounts of assistance to more families, while some choose to give more generous assistance to fewer families, and provide a waiting list for others who wish to receive assistance. Contact your state office of social services, human services, child care or workforce development to learn more about the child care assistance available in your state and whether you qualify.
In addition, there are several forms of tax assistance, such as the federal Child and Dependent Care Tax Credit and some state tax credits, for which you may be eligible. See our fact sheets Questions and Answers About Dependent Care Assistance Programs and Lower Your Taxes or Increase Your Refund for more information. You can also order our publication Making Care Less Taxing or download it now.
Q. I can't meet my welfare work requirements because I can't find child care. Can I be sanctioned for this?
A. In some instances, no. Federal law provides that if you are receiving money through the Temporary Assistance for Needy Families (TANF) program, you cannot be sanctioned if you are a single parent, you have a child under the age of six, and you cannot comply with work requirements because no suitable child care is available.
Q. Where can I find out about child care services and availability in my area?
A. Child care resource and referral agencies are a source of information about local child care facilities and can help you find a child care provider that suits your needs. Some states fund child care resource and referral agencies. In other instances, private nonprofit organizations offer child care information. In addition, some employers provide resource and referral services to their employees. Check the yellow pages of your local phone book for resource and referral agencies in your area.
Q. Is there any tax assistance I can receive to help meet the cost of child care?
A. Yes, you can receive tax assistance from the federal and some state governments to offset the cost of child care. The federal Child and Dependent Care Credit is a non-refundable tax credit worth up to $1,440 to families who pay for the care of a child or other dependents in order to work in paid employment. Several states also offer similar child and dependent care tax credits or deductions, some of which are refundable. See our fact sheet Lower Your Taxes or Increase Your Refund for more information. For state credits, you can also order our publication Making Care Less Taxing or download it now.
In addition to the federal Child and Dependent Care Tax Credit, the federal Dependent Care Assistance Program allows an employer to provide up to $5,000 in tax-free income to an employee to help pay for child and dependent care services. Finally, the federal Child Tax Credit provides a partially refundable credit of $500 per child, which can be used by a family to offset the cost of child care.
Q. Am I eligible for the federal Child and Dependent Care Credit?
A. Taxpayers at all income levels who pay for care of a child under age 13, or a spouse or dependent who is incapable of caring for himself or herself, in order to work in paid employment are eligible to claim the Child and Dependent Care Credit. To find out more about your eligibility, see our fact sheet Lower Your Taxes or Increase Your Refund.
Q. How much can I get from the federal Child and Dependent Care Credit?
A. The amount of the credit you can claim is based on your income, the number of dependents in your care, and the amount you paid for the care. In general, the higher your child care expenses and the lower your income, the larger your credit. You should be aware that if you owe no taxes, you cannot claim the Child and Dependent Care Tax Credit, because it is not a refundable tax credit. But even if you only owe a small amount of taxes, claiming the Child and Dependent Care Tax Credit can increase the amount of any refund you may otherwise get, such as through claiming the Earned Income Tax Credit. For more information about these credits, see Lower Your Taxes or Increase Your Refund.
Q. How does the Dependent Care Assistance Program work?
A. In order to take advantage of the Dependent Care Assistance Program, your employer must offer the program as a benefit. In general, this program allows your employer to provide you with up to $5,000 in assistance to meet certain child and dependent care expenses. This assistance is exempt from federal income and payroll taxes, and may in addition be exempt from state income taxes. Your employer may provide you with this assistance in addition to your salary or you may agree to receive this assistance in lieu of part of your salary. In the latter case, the assistance you receive is in effect limited to the amount of money you save by not paying taxes on a part of your income, but that could be more than you would receive under the Child and Dependent Care Credit. Although you may still be able to claim the Child and Dependent Care Credit as well, you must subtract the amount of assistance you receive from the Dependent Care Assistance Program from the child care expenses that may be claimed under the Child and Dependent Care Credit.
Q. What can be done to expand the availability of high quality, affordable child care?
A. Many policy changes can and should be made. The federal Child Care and Development Fund should be substantially expanded to enable states to provide child care subsidies to more low-income families. The federal Child and Dependent Care Tax Credit should be improved to better meet the needs of families, by making the credit refundable and making adjustments so that a larger percentage of expenses can be claimed as a credit. Similar credits should be made available, and improved, at the state level. Child care quality should be improved through, for example, improved licensing standards and enforcement, and policies to improve staff compensation and benefits in order to attract qualified staff and reduce turnover. Programs that provide safe, supervised before- and after-school activities for school-age youth, such as the 21st Century Community Learning Centers, should be expanded.
Q. What can I do to advocate for these changes?
A. Let your elected officials, at the federal, state, and local levels, know how important these issues are to you, and ask what they are doing about it. You can also ask your employer to offer child care assistance to employees. And contact local child care resource and referral agencies to find out what can be done in your local community. If you want to help the Center advocate for improved child care, tell us your experience in trying to secure and maintain high-quality child care.
