Child Care Deduction

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Reasonable child care expenses for the care of a child age 12 or under may be deducted from "annual (gross) income" if they:

	enable an adult family member to seek employment actively, be gainfully employed, or further his/her education; and
	if the expenses are not reimbursed.

To document that the anticipated child care expenses are for an appropriate reason, the household must:

	Identify the child(ren) who will be cared for;
	Identify the family member who is enabled to work, look for work, or go to school because of the child care;
	Demonstrate that no other adult household member is available to care for the child; and
	Identify the child care provider and provide documentation of costs.   If child care expenses are being requested to enable a family member to work, the expenses allowed cannot exceed the income generated by that household member during the period the care is provided.   The PJ should look at the family's actual circumstances to determine which family member is enabled to work. In general, however, the person with the lower income is considered the family member enabled to work. (It is assumed that this family member would quit work to take care of the children if no child care were available).   If child care expenses are being requested to enable a family member to look for work, the family must provide evidence that the household member is looking for work.   If child care expenses are being requested to enable a family member to go to school, the household must provide documentation that the household member is enrolled in a vocational program or degree-granting institution. The household member need not be a full-time student.

Remember: The child care expenses must be reasonable!