No one knows your family more intimately than your babysitter. They are the unsung heroes, the ones who are given sacred access to everything from the secret family bedtime song to your ovulation schedule while you try for baby number two. (Listen, they know why you ask them to stay overnight once a month.) But all that closeness doesn't help you figure out if your babysitter will be tax deductible in 2019. Don't worry, I'm here to help.
First, a quick lesson on what a tax deduction even is. (Why they didn't teach stuff like this when I was in high school is beyond me, but I digress.) As eFile explains, "a tax deduction reduces your taxable income on your income tax return," which theoretically will give you more money on your tax return. Yay! So the more deductions, the better. Things like charitable donations, medical and dental expenses, and mortgage payments all qualify, but there are a myriad of other things that can be deducted that you wouldn't necessarily think of immediately. Credit.com points out that work-related education expenses, like textbooks, tuition, or even the cost of traveling to school can be a deduction, as can using your home for business. The more granular you get about the things you spend money on, the more complicated things get, which is why it might be a bit difficult to figure out if your babysitter is tax deductible or not.
As it turns out, babysitters can be tax deductible for 2019, but there are some really specific criteria your family's caretaker must meet for that to be the case. It all goes back to the Child and Dependent Care Credit, which states that "You may be able to claim the child and dependent care credit if you paid expenses for the care of a qualifying individual to enable you (and your spouse, if filing a joint return) to work or actively look for work" according to the IRS website. In laymen's terms, you must be paying a caregiver so you can work or apply for work, not for coverage for date nights or social activities — so those ovulation getaways won't be applicable, unfortunately. But daycares or even day camps are tax deductible, and if you're in school, you can use the credit to account for care for your child while you're in class.
You might have noticed the language in the code is specific to say "qualifying individual" rather than child; that's because the credit applies to children under 13, as well dependents who are not physically or mentally able to care for themselves. So if you're caring for a parent or a spouse, the credit can help you get some cash back too. And considering the credit covers up to $3,000 in care for one dependent and up to $6,000 for two or more dependents, you should definitely look into whether you qualify if you're paying for care for anyone.
There's a whole myriad of requirements you must meet to be eligible for the credit, but the biggies are that your child must be under 13, you must be their primary caretaker, and the caregiver cannot be your spouse or the child's parent. You can check out the full list of requirements on Turbo Tax, and go to the "Can You Claim The Credit?" section of Publication 503 to walk through figuring out if you qualify. Quick tip: the rules are slightly confusing when it comes to children of divorced parents as to which parent gets to claim the credit, so definitely do your homework if you're filing as a divorced or separated. Happy tax season!