It costs major money to hire childcare, whether it's a babysitter, nanny, or a daycare service. Add in all the other costs that come with parenting, and you may find yourself stressing come tax season. As a result, you may find yourself searching the internet for ways to find tax breaks as a parent. One thing you may find yourself typing into google is: "can I deduct babysitting expenses from my taxes?"
Well, according to TurboTax, you may qualify for a tax credit of up to 35 percent of expenses of $3,000 for one child. This tax credit, called the Child and Dependent Care Credit, counts for children under the age of 13 who have attended a daycare center, summer camp, or have been babysat.
Finances can be confusing though. How does a tax credit differ from a tax deduction anyway? Financial planner Matt Becker can help and break it down for you. In a separate TurboTax article, Becker cited that a tax credit differs from a tax deduction because a credit cuts your tax bill by dollar amount, while deductions reduce the amount of income you need to pay tax on.
TurboTax further noted that you can't get a tax break if the person watching your child fits one of the following descriptions: your spouse, other parent of the child, anyone listed as a dependent on your tax return, or another one of your minor children. You can try to look for potential babysitter candidates outside of your family to try to receive a tax break for next year, as many can be found online or through community postings.
You need help when it comes to taking care of your child and that's perfectly understandable. If you and your spouse have a packed work schedule, or just need some time for yourselves, be sure to remember the qualifications for a babysitting tax break the next time you book child care.