Can I Claim Preschool Costs On My Taxes? There Are A Few Requirements
People already know college tuition is an expensive investment, and when you calculate your child’s education expenses from diapers to diplomas, it turns out to be pretty pricey. Sending your little Einstein to preschool isn’t cheap either. Depending on where you live and the quality of the school, the bill could look comparable to a semester at a state university. With Tax Day closer than you think, some may be scrambling to get the best refund and might question: Can I claim preschool costs on my taxes? You cut a decent-sized check for your child's pre-k education this year.
Simply answered, yes you can, as long as the reason your child attended preschool was in order to get child care while you worked.
Technically preschool is not a deductible expense for the education credits and deductions. But, child care expenses for children below the level of kindergarten are deductible if they are enrolled in nursery school, preschool, or other similar programs. So, you’ll need to find out if your child’s preschool fees qualify for the child and dependent care credit, or if they otherwise qualify as "child care."
"You may be able to claim up to $1,050 for one child and up to $2,100 for two or more children," Lisa Greene-Lewis, a certified public accountant and the blog editor for TurboTax, tells Romper.
She adds that the credits work as dollar for dollar reductions on your taxes. In other words, if you owe $1,050 in taxes and have one child, you may be able to entirely wipe out those taxes with your credit. If you have two or more children who qualify, you can write-off even more.
Here’s a detailed checklist to see if your kids will qualify you for the credit:
- Your child is 13 years old or younger at the end of the tax year. To clarify, the end of the tax year is the last day of the calendar year, December 31.
- You are legally responsible for the child you are claiming on your taxes (this includes stepchildren, foster children, and adopted children).
- You financially supported more than half of your child’s expenses during the tax year.
- You are claiming your child as a dependent on your tax return.
- Your child is a U.S. citizen (a U.S. national or a U.S. resident alien also qualify).
- Your child lived with you for more than half of the tax year for which you are claiming the credit.
- Your family income was under the following amounts: $55,000 (for married couples filing separately), $75,000 (for single, head of household), $110,000 (for married couples filing jointly).
You and your child must pass all seven requirements to claim the child and dependent care credit. If you’re a bit off on the family income requirement and make slightly more than the amounts listed above, there is a little wiggle room that works in your favor: For each $1,000 of income made over the requirement, the tax credit will be reduced by $50. That’s not a bad trade-off, considering this credit can reduce your tax bill by as much as $1,000 per child. It was created to benefit working families after all.
You may also qualify for the credit if you put your child in day camp while you work or even search for a job, Greene-Lewis says. Overnight camp, unfortunately, does not qualify for the credit.
If you’re able to check off all seven requirements, then you should have no troubles (hopefully) claiming your child’s preschool costs on this year’s taxes. Of course when filing your taxes, you'll need to remember to fill out and attach the separate, official Child and Dependent Care Taxes form, otherwise you'll get nothing.
So take a hard look at your finances, and buckle down with your accountant (or your handy laptop) and see if this tax break will work in your favor. With the cost of preschool averaging around $8,800 a year (that's $733 a month), it behooves all families to look into every tax break possible so that they can stress less about their budget. Hopefully you'll not only owe money back to the government this year, but you'll be in a position where you're getting some state or federal funds back to you, and you can put that extra cash aside to use towards your tot’s future.
Lisa Greene-Lewis, certified public accountant and the blog editor for TurboTax
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