It’s time to file for the 2020 tax year, and chances are you have a few questions about how to do taxes for this bizarro year. Parents in particular will want to get the most credit for their child’s expenses as possible. With this in mind, is preschool tax deductible for 2020? Here’s what financial and tax experts want parents of preschoolers to know.
“Preschool and day care are not tax deductible, but you can be entitled to credits instead, which could mean better tax benefits for you,” Paul Sundin, a CPA and tax strategist at Emparion, tells Romper via email. And these credits can be very helpful for parents. “Any type of school payment — pre-school, elementary, middle school, or high school — is not tax-deductible,” as Rafael Alvarez, founder and CEO of ATAX, tells Romper. (College tuition is the exception.)
“What we have seen is a lot of parents claiming their pre-school payments as a Child Care payment, which gives them a credit of up to 35% of a $3,000 maximum allowed to claim per child. If the income is more than $43,000, the credit is 20% equal to $600 for up to two children.” Just be sure to double-check the way you’re filing. “For families looking to claim preschool as a tax deduction, you must file this tax under the ‘Child and Dependent Care Credit,’” Michael Bloch, CEO and founder at Pillar Life, tells Romper. Everyone’s situation is different, but chances are these credits can help make your 2020 tax season a little gentler.
How To Qualify For Child & Dependent Care Credit
This is where things really start to feel like dealing with taxes, so buckle up. “The details can be super technical,” says Bloch, but he notes that the main points families need to think about to see if they qualify are the following:
- If you have someone take care of your child so you can work or look for work
- Your child is under the age of 13 at the end of the tax year (no age limit if they are disabled)
- You must be able to claim your child as a dependent
- Your filing status must be single, head of household, qualifying widow or widower with a qualifying child, or married filing jointly.
The full criteria for who’s eligible to claim the Child and Dependent Care Credit is available on the website for the IRS.
How To File For The Credit
When you’re gathering up documents to file 2020’s taxes, include receipts for preschool payments. “Families will need to provide proof of payment indicating the total amount paid for the year. Some pre-schools will provide the IRS form, the W-10, to the taxpayer,” says Alvarez. Contact your child’s preschool if you have any questions.
Also remember that the COVID-19 pandemic did not affect any of these tax requirements, as noted by Alvarez, so at least something is still the same.
If your brain is buzzing from all the info, remember that even financial pros can feel a bit overwhelmed when trying to file taxes as a parent. “As a first-time millennial parent myself, navigating this new world of child tax deductions is scary. However, the COVID-19 pandemic did provide parents with the opportunity to keep child tax deduction requirements consistent for the most part with even some more flexibility,” says Bloch. If you’re in a jam, contact a tax pro in your area or check out the best websites to file taxes for parents for help.
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