Child Care Cost Deduction

When tabulating the child care costs for last year, there are a few items to consider for this tax break. Even if you have a flex plan for child care costs, you can still claim a dependent care credit if your expenses exceed what was paid through the account. The maximum paid through the account is $5000. Since the maximum allowed for the credit is $6000, that means potentially $1000 of expenses could be used for the credit on Form 2441. This would save $200 in taxes for most people.

Also, for the purposes of expenses, children must be under the age of 13, and the expenses must be incurred so that the parents can work or attend school. Costs for summer day camps can be used as long as they are not purely educational. So tutoring programs won’t work, but computer, theatre or sports camps will.


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