Educate employees about their tax options
Employees can reduce their tax burden by claiming childcare expenses. The resources provided here are intended as informational tools only and are not a substitute for professional tax advice.
Available Tax Credits
Child and Dependent Care Tax Credit
Families can qualify for a tax break using the Child and Dependent Care Tax Credit . With this tax credit, you are able to itemize up to $3,000 in childcare expenses per child ($6,000 maximum). Learn about eligibility requirements and how to claim this tax credit through the IRS website .
When you file your personal income tax return, use IRS Form 2441 to itemize up to $3,000 in child care expenses per child ($6,000 maximum), which brings about $600 per child ($1,200 maximum) in tax savings.
If you have more than one child and have access to a Dependent Care Flexible Spending Account (FSA), the rules are slightly different.
Families can’t use their FSA and Form 2441 for the same expenses. For example, if a family who has already set aside the maximum of $5,000 in their FSA can only claim $1,000 toward the Child and Dependent Care Tax Credit.
If you do have an FSA, you can use Form 2441 for the additional $1,000 in childcare expenses to save an additional $200.
Earned Income Tax Credit (EITC)
The EITC is a tax credit available to low- to moderate-income wage earners. The credit can range from a few hundred to several thousand, depending upon how many children you have and what your filing status is.
Visit the IRS website to see if you qualify for EITC and how to file.