How to Help Parents Claim All Allowable Child Tax Credits

One of the many roles that a family child care provider plays is a community resource for the parents of the children in your care. You may give referrals to local parenting classes, family fun activities, domestic abuse helpline, and so on.

Another way you can help families is by passing on information about federal tax credits that can help ease their financial stress:

Child and Dependent Care Credit: This is the credit parents can claim for paying you to care for their child (under age 13) while they work or attend school. Parents can claim the credit based on the first $3,000 of child care expenses for one child, or $6,000 for two or more children. See IRS Publication 503 Child and Dependent Care Expenses.

Note: You may be eligible for this credit if you send your own child to another child care program while you are working in your home!

Child Tax Credit: Parents who have children under age 17, provide more than half the child’s support, lived with the child for more than half the year and can claim the child as a dependent can qualify for this credit.  This credit can be claimed in addition to the Child and Dependent Care Credit. See IRS Publication 972, Child Tax Credit.

Earned Income Tax Credit: This is a tax credit for families (with one child) who have earned income of less than $44,846 (2016) if married or $39,296 if single. The amounts are higher if the parents has more than one child.  See IRS Publication 596 Earned Income Credit.

Adoption Credit: Parents may be able to take this tax credit for qualifying expenses paid to adopt an eligible child. See IRS Form 8839, Qualified Adoption Expenses.

Higher Education Credits: These credits can help offset the costs of post-secondary education for parents and their children. The American Opportunity and Lifetime Learning Credit are credits that can reduce a family’s income tax dollar-for-dollar. See IRS Publication 970, Tax Benefits for Education.

Student Loan Interest: Parents may be able to deduct the interest they are paying on a qualifying student loan, without having to itemize their deductions. See IRS Publication 970, Tax Benefits for Education.

You may want to print out this article and pass it out to parents, or email it to them.

Your family may also be eligible for these credits.

What kinds of community resources do you refer parents to?

Tom Copeland –

Image credit:

Categories: Parents & Taxes, Record Keeping & Taxes, Tax Return

Leave a Reply

Your email address will not be published. Required fields are marked *