There are tax programs you may qualify for through the Internal Revenue Service (IRS), or your employer.
Click Here for a Dependent Care Assistance Program (DCAP) guide that was developed for families by the American Business Collaboration and Corporate VOICES for Working Families with assistance from Louise Stoney and Susan Blank. Employers can Click Here for a guide that was developed to help them create DCAP programs for their employees.
Federal Tax Credits
Child and Dependent Care Tax Credit helps families pay for child care for children under the age of 13, if the parents are working or looking for work. Parents who are full-time students can also claim the credit. Qualifying care includes child care centers, family child care homes, and care provided by paid friends or relatives. The relative can not be a dependent of the taxpayer. The size of the credit depends on the number of children in care, your family income, and the amount you paid for child care during the tax year. There are limits on the credit given for one child, and two or more children. To claim the credit, you must file either a Form 1040A or Form 1040 federal tax return, and attach a separate form for the credit. If you file Form 1040A, use Schedule 2 for the credit. If you file Form 1040, attach Form 2441.
Usted ha trabajado duro, obtenga el crédito que merece! Familias en Nueva York: Usted podría recibir miles de dólares en desgravaciones fiscals.
Earned Income Tax Credit: A refundable tax credit for low and moderate income families especially those with children. The EITC is based on family income and the number of children in the family. Both single and two parent families are entitled to the credit, as long as one parent is employed.
Si usted trabaha y tiene hijos, podría recibir miles de dólares para su familia cuando entregue su declaración fiscal!
State Tax Credits: New York State and Twenty-three other states have state tax programs related to the Child and Dependent Care Credit. Check with your state department of revenue for more information. (Español)
In-Home Care or Nanny Tax: When you hire an in-home caregiver, you become an employer under federal law. You need to be aware of laws regarding taxes, verification of employment eligibility, and minimum wage. For information on these topics, contact the Department of Labor, the Internal Revenue Service, an accountant, a tax advisor, or an insurance agent.
You may want to check with your insurance agent to see if your homeowners' policy covers workers' compensation insurance. If your caregiver will be driving your car, you should notify your car insurance company. They will let you know if there are additional fees for adding the caregiver on your insurance policy.
See our Tax Fact Sheet for more information about tax credits and child care subsidy.