Can I Deduct Preschool Tuition? + FAQs

No — preschool tuition is not deductible as an education expense on federal taxes.

In fact, the average U.S. family spends over $13,000 per year on child care and preschool, yet none of that is deductible on a federal return. However, there’s a silver lining: those preschool costs may qualify for a tax break through the Child and Dependent Care Credit (a valuable credit for working parents).

In this guide, you’ll learn:

💡 Why there’s no federal deduction – Understand why the IRS treats preschool tuition as a personal expense (not an education write-off) and how federal law classifies child care vs. school.
🏦 The tax credit loophole – How you can get tax relief for preschool bills via the Child and Dependent Care Credit (who qualifies, how much you can get, and how to claim it).
🗺️ State-by-state breaks – A handy breakdown of all 50 states: which states offer their own child care credits or deductions for preschool, and which give you nothing.
⚖️ Rules, cases & pitfalls – Key IRS rules (like age limits and the Form 2441 requirement), real Tax Court case insights, and common mistakes to avoid (🚫 like trying to write off kindergarten tuition or double-dipping benefits).
📝 Smart tax strategies – Pro tips on maximizing your savings: comparing the dependent care credit vs. a workplace Dependent Care FSA, special scenarios (e.g. special needs preschool or nanny care), and FAQs answered in plain English.

Let’s dive into everything you need to know to navigate preschool expenses at tax time, with an expert, parent-friendly approach.

Why the IRS Says “No” to Deducing Preschool Tuition (Federal Law Explained)

When it comes to federal income tax, educational costs for young children are considered personal expenses. The IRS does not allow a deduction for preschool or nursery school tuition. Unlike college tuition (which can qualify for education credits) or business education (which can sometimes be deducted if job-related), preschool doesn’t fit into any deductible category. Here’s the federal stance on preschool costs:

Personal Expense, Not Tuition Deduction: The tax code doesn’t list preschool or K–12 education costs as deductible items. In IRS terms, preschool tuition is a personal living expense – similar to food, housing, or clothing for your child. There is no line on your federal tax return to deduct private school tuition for kindergarten, preschool, or similar programs. Even if the preschool has an academic curriculum, the IRS doesn’t treat it as an “education expense” eligible for tax breaks. Simply put, you cannot write off preschool tuition as an itemized deduction or an above-the-line deduction on your federal return.

No “Education Credit” for Preschool: Federal education tax credits (like the American Opportunity Credit and Lifetime Learning Credit) only apply to higher education (college or vocational school). They explicitly exclude elementary and secondary schooling. Preschool (and even kindergarten through high school) isn’t covered by any federal education credit or tuition deduction. So, you won’t find a special credit for your 4-year-old’s preschool the way you might for a college freshman’s tuition.

IRS Policy Rationale: Why doesn’t Uncle Sam let parents deduct early education tuition? The reasoning is that primary education (including preschool) is considered a personal parental responsibility, not a tax-subsidized investment like higher education or work-related training. Congress has chosen to support families with young kids through credits (like the Child Tax Credit and Dependent Care Credit) rather than treating preschool fees as deductible educational expenses. It’s a policy choice: they give a credit (which we’ll cover next) for child care to enable work, instead of a deduction for the education component of preschool.

Dependent Care vs. Education: The Key Distinction

It’s important to understand the IRS’s distinction between child care and education. For tax purposes, preschool can fall into two different categories depending on its purpose:

If the primary purpose is custodial care (watching your child so you can work), the expense is seen as child care. Preschool, daycare, nursery school – these generally count as child care expenses as long as they are incurred to allow the parent(s) to work or look for work. Child care expenses can potentially qualify for a credit (more on this soon).

If the primary purpose is education (structured schooling), then it’s viewed as a personal education expense. The IRS draws a hard line at kindergarten: any tuition for kindergarten or above is considered an education expense and not eligible for the dependent care credit. Kindergarten is seen as the beginning of formal education, so those costs (even for private kindergarten) do not count as “care” for tax credit purposes. Preschool and nursery school (below kindergarten), however, are treated as child care as long as they’re primarily for the child’s well-being while parents work.

In practice, most preschools serve both educational and care functions. The IRS acknowledges this and generally allows preschool tuition to qualify for the child care credit, because preschool enables parents to work. But it’s not a “tuition deduction” – it’s categorized under dependent care.

Bottom line: You can’t deduct preschool tuition as an education expense, but if you pay for preschool so you can work, the IRS will treat it like paying a babysitter or daycare – potentially qualifying you for a tax credit. This distinction is crucial for navigating the tax rules.

The One Rare Exception: Special Education as Medical Expense

While ordinary preschool tuition isn’t deductible, there is a niche exception worth mentioning. If a child attends a specialized preschool for medical or therapeutic reasons, part of that cost might be deductible as a medical expense.

For example, if your child has a developmental disability and a doctor recommends a special educational program (such as a preschool for children with autism that provides therapy), the tuition could be considered a medical treatment expense. In these cases, IRS rules (and U.S. Tax Court rulings) have allowed deductions when the primary purpose of schooling is therapy or medical care for a diagnosed condition.

However, even this is limited: it would fall under itemized medical deductions, which are only deductible to the extent your total medical expenses exceed 7.5% of your income. And you’d need documentation (doctor’s note, etc.) to back it up. This is a very specific scenario and doesn’t apply to typical preschool programs. For the average family with a neurotypical child, preschool costs will not be deductible – the only tax relief will come through credits, not deductions.

Now that we’ve covered the federal law (no direct deduction for preschool), let’s move on to the good news: how you can offset some of those preschool costs with a valuable tax credit for working parents.

Turning Preschool Tuition into a Tax Break: The Child and Dependent Care Credit

While you can’t deduct preschool tuition, you may be eligible for the Child and Dependent Care Credit – a federal tax credit designed to help working parents cover the cost of child care (including preschool). Think of it as the IRS’s way of giving you a break for paying someone to watch your little one while you earn a living. Here’s everything you need to know about this credit and how preschool fits in:

What Is the Child & Dependent Care Credit?

The Child and Dependent Care Credit is a non-refundable tax credit (a dollar-for-dollar reduction of your tax bill) for a portion of qualifying child care expenses. In plain language, if you pay for daycare or preschool so that you (and your spouse, if married) can work, this credit can cut your taxes by a percentage of those costs.

Key features of the credit:

It covers children under age 13 (as well as disabled dependents of any age).
It applies to expenses that are necessary for the parent(s) to work or look for work. This includes preschool tuition, daycare, nursery school, babysitters, after-school care, day camps in summer, etc. (Overnight camps, however, do not qualify.)
You must have earned income (wages, salary, or net self-employment income). If you’re married filing jointly, both spouses generally must have earned income (unless one is a full-time student or disabled).
The credit is a percentage of your eligible expenses, with the percentage based on your income. Most families get between 20% and 35% of their child care costs back as a credit, up to certain limits.

For tax year 2024 and beyond (current law), the credit allows up to $3,000 of qualifying expenses for one child (or $6,000 for two or more children). The credit percentage ranges from 35% (for lower incomes) down to 20% (for higher incomes). By law, the minimum is 20% for anyone with income above ~$43,000. This means:

If your income is modest (for example, under ~$20,000), you might get 30% or even up to 35% of your preschool costs back as a credit.
If your income is higher (middle income and up), you’ll likely get the minimum 20% credit rate. (In fact, many middle-class families end up at the 20% rate, given the low threshold for the phase-down.)

The maximum credit for one child is typically $600 (that’s 20% of $3,000) up to $1,050 (35% of $3,000), depending on your income. If you have two or more kids in care, the max credit is $1,200 to $2,100 (20% to 35% of $6,000). These limits might not cover your entire preschool bill, but it’s still a helpful offset. (Notably, in 2021 a special law temporarily raised these amounts significantly and made the credit refundable for one year – but that has since expired, and we’re back to the usual limits.)

Does Preschool Tuition Count for the Child Care Credit?

Yes! Preschool, pre-K, nursery school, and similar programs do count as qualifying expenses for the Child and Dependent Care Credit, as long as the primary reason you’re paying the expense is to enable you (and your spouse, if applicable) to work or look for work. The IRS explicitly includes nursery school and preschool in the list of qualifying expenses for this credit.

So, if your child is 3 or 4 years old and attending preschool, and you’re paying those fees so that you can go to your job, those costs are eligible for the credit. This is true even if the program has educational elements. From the IRS’s perspective, preschool tuition = child care (for purposes of the credit) because it’s care for a child under 13 while the parent works.

Important caveat: If part of your preschool tuition goes toward something not related to care (for example, a separate charge for meals, field trips, etc.), those are still generally fine to count. But if you pay kindergarten tuition (for a 5-year-old in a private school), note that kindergarten is NOT eligible. The IRS draws the line there – any schooling at the kindergarten level or above is considered education, not care. Many parents ask: “My child is 5 but in a pre-K classroom because of birthday cutoff – can I count that?” Generally, if it’s not a formal kindergarten grade, and it’s essentially daycare/pre-K, you can. But if it’s explicitly kindergarten curriculum, the IRS says no for the credit.

For preschoolers (under age 5 typically), you’re in the clear to treat it as child care cost for the credit. Just ensure you meet the other work-related criteria.

Who Can Claim the Credit (Eligibility Rules)

To benefit from the Child and Dependent Care Credit for your preschool expenses, make sure you meet these qualifying tests:

Work-Related Expense: You must be paying for preschool so that you (and your spouse) can work or actively look for work. If you’re married and one spouse is not employed or looking for a job, you generally cannot claim the credit (because then the expense isn’t “enabling work” – one parent is available to care for the child). There are two exceptions: if the non-working spouse is a full-time student or is mentally/physically incapable of self-care, the IRS will treat them as having “deemed” income for credit purposes so you can still qualify.
Earned Income: You must have earned income during the year. For married couples, both must have earned income (with the same exceptions as above). Earned income means wages, salaries, tips, self-employment income, etc. If one of you has zero earned income (and isn’t a student or disabled), no credit is allowed – even if you paid for child care. (This trips up stay-at-home spouse families: e.g., if one spouse works and the other stays home, you unfortunately can’t claim the credit for preschool, because the IRS expects the non-working spouse to be the caregiver.)
Filing Status: If married, you must file jointly to claim the credit. (Married Filing Separately generally cannot take it, with very narrow exceptions if you lived apart and meet certain conditions.) Single, Head of Household, or Qualifying Widow(er) filers can claim as well, of course.
Qualifying Child: The child must be your dependent and under age 13 when the care was provided. For a preschooler, that’s clearly satisfied. (If you have an older child with a disability who cannot self-care, they can qualify regardless of age, but that’s outside our preschool focus.)
Provider Identification: You need to provide the name, address, and Tax ID number (EIN or Social Security number) of the preschool or child care provider on your tax return (specifically on Form 2441, Part I). The IRS uses this to verify the expense. Most preschools will give you their EIN for tax purposes. Failing to provide a valid ID for the provider can result in losing the credit, so be diligent here.
No Payments to Your Spouse or Older Child: You obviously can’t claim the credit for paying your own spouse to watch the kid, or for paying one of your other children (who is under age 19). For example, if you pay your 17-year-old to babysit your 3-year-old, the IRS won’t count that expense. (Paying grandma or another relative is fine as long as they are not your dependent and you report their info – though note, they’re supposed to report that income on their own tax return.)

If you meet these criteria, then congratulations – you’re eligible to claim the credit for your preschool expenses!

How Much Tax Savings Can You Get?

The value of the credit depends on two factors: your income (which sets the percentage) and your preschool expenses (capped by the limits).

Credit percentage: Ranges from 35% for very low incomes, gradually dropping to 20% for anyone roughly $43,000 and above. Practically speaking, most middle-income and higher earners will get 20%. Moderate earners might get 25% or 30%. (For example, a single parent earning $30,000 might get around a 30% credit rate; a couple earning $70,000 will get 20%.)

Expense limit: You can count up to $3,000 of preschool (and other care) expenses for one child (or $6,000 total if you have two or more kids in care). It doesn’t matter if you actually spent $10,000 on preschool – the credit calculation will only take the first $3,000 (for one child) into account. If you have two preschoolers (or a toddler and an older child in after-school care, etc.), the cap is $6,000 combined expenses.

Given those, the maximum credit per year is $1,050 for one child (35% of $3,000) if you have a low income, or $600 (20% of $3,000) if you’re above the income threshold. If you have two or more qualifying kids, the max doubles (so $2,100 at most, or $1,200 for higher-income households).

Let’s put this into perspective with a couple of scenarios:

Scenario	Potential Tax Credit
Single parent, income $25,000, one preschooler, paid $3,000 in tuition	$1,050 credit (35% of $3,000). This parent gets the maximum rate due to lower income, so they recoup over a thousand dollars of their preschool cost as a tax credit.
Married couple, income $100,000, one preschooler, paid $10,000 in tuition	$600 credit. Despite paying a high $10k for an elite preschool, they can only count $3,000 of it for the credit. At 20%, that’s $600 off their taxes. The remaining $7k of tuition has no federal tax relief.
Married couple, one income $50k, other parent at home, one preschooler, paid $5,000	$0 credit. They fail the “both spouses working” test. Because one spouse did not have earned income (nor was a student/disabled), the entire $5k preschool expense gets no credit. They should consider other strategies (like perhaps the working spouse’s employer FSA, see below), but no direct credit is allowed in this situation.

As you can see, the credit can help, but it’s not a panacea. For many families, it covers only a fraction of the actual preschool costs. It’s still “free” money in the sense that it reduces your tax bill dollar-for-dollar, but be aware of its limits.

One more quirk: the Child and Dependent Care Credit is non-refundable in normal years – it can reduce your tax to zero, but it won’t give you a negative tax (a refund) beyond what you paid in. This means you need to have tax liability to use it fully. (In 2021, it was temporarily made refundable, which helped very low-income parents get the benefit, but that was just for that year under the American Rescue Plan.) Currently, if you owe no federal income tax because your income is low or wiped out by other credits/deductions, then this credit won’t create a refund for you. It can only bring your tax owed down to zero at best.

How to Claim the Credit (Form 2441)

To actually claim this credit on your tax return, you’ll need to fill out IRS Form 2441 (Child and Dependent Care Expenses) and attach it to your Form 1040. On Form 2441, you’ll list:

The provider’s name, address, and Tax ID (Employer ID or SSN).
The amount you paid to that provider for the year.
The qualifying person’s name (your child) and their Social Security number.
Your earned income and your spouse’s earned income (the credit can’t exceed the smaller of the two incomes, among other technical rules).

The form then walks you through calculating the allowable expenses (capped at $3,000/$6,000), determining your credit percentage from a table (based on your income), and crunching the final credit amount. If you use tax software or a tax preparer, they’ll handle the math as long as you input the info.

Be careful to keep records: receipts or statements from the preschool, and perhaps a year-end statement that many childcare providers give. You don’t send receipts with your return, but keep them in case of an audit. Also, if your provider is a daycare center or school, they likely have an EIN. If it’s an individual (like a nanny or babysitter), you may need their SSN and you should give them a Form W-10 to fill out their info. It feels awkward, but it’s required to claim the credit.

One more thing: if you receive any employer-provided child care benefits (for example, your employer paid some of your daycare cost, or you used a Dependent Care FSA), that will be noted in Box 10 of your W-2. Those amounts reduce the expenses you can claim for the credit. Let’s discuss that scenario next, because it’s a common alternative.

Dependent Care FSA vs. Tax Credit: Don’t Double-Dip!

Many employers offer a Dependent Care Flexible Spending Account (FSA) – a benefit where you can set aside up to $5,000 of your salary pre-tax to use for child care expenses. This is an excellent way to save on preschool costs as well, often saving you more in taxes than the credit if you’re in a higher tax bracket. However, you can’t use the FSA and get the full credit on the same dollars – no double dipping.

Here’s how it works:

If you pay your preschool through a Dependent Care FSA (i.e., your employer withholds money from your paycheck pre-tax and then reimburses your childcare expenses up to $5k), that $5,000 is already tax-free (you didn’t pay federal income tax or Social Security/Medicare tax on it). So you cannot claim the child care credit on those same dollars.

Any amount above the FSA that you spend out-of-pocket can still qualify for the credit, up to the limits. For example, suppose you had $7,000 of preschool expenses, and you ran $5,000 through your FSA. You have $2,000 left that you paid with after-tax money. You can potentially claim the credit on that remaining $2,000 (up to the $3k limit for one child, which you haven’t fully reached because $5k went to FSA). In this scenario, you’d get maybe 20% of $2,000 = $400 credit.

If you use the full $5k FSA and have one child, effectively you’ve exhausted the $3k limit for credit purposes (because the IRS says to subtract any employer-provided dependent care benefits from the $3k/$6k). Many people in this case just use the FSA (which often yields greater tax savings, especially when considering payroll taxes saved) and don’t get any additional credit. And that’s perfectly fine and legal – just make sure not to try to claim the credit on the FSA-covered amount.

Choosing Credit vs. FSA: If your employer offers a dependent care FSA, it’s worth comparing benefits. The FSA lets you save at your marginal tax rate plus avoids payroll taxes, which can easily be a 30%+ savings on $5k (so ~$1,500 saved). The credit might give you 20% of $5k = $1,000. Generally, higher earners favor the FSA because they’re in the 22% (or higher) tax bracket, making FSA more valuable. Lower earners might stick with the credit (especially if your employer doesn’t offer an FSA). Some families do a mix – use FSA for some, credit for any extra. The key is coordinate them and don’t lose out by failing to use an available FSA or by accidentally double-claiming.

Other Tax Angles and Strategies

529 Plans / Education Savings: Some parents ask if they can use a 529 college savings plan or Coverdell Education Savings for preschool. Current federal law only allows 529 withdrawals tax-free for K-12 tuition (up to $10k/year) and higher education – not preschool. Coverdell ESAs likewise permit K-12 expenses (including elementary school), but preschool typically doesn’t count as elementary school. So, you can’t use those education-focused accounts to fund pre-K or nursery school without tax penalty. Those are geared toward later schooling.

Nanny or In-Home Care: If instead of preschool you have a nanny or babysitter at home so you can work, that expense also qualifies for the credit. Bear in mind, paying a nanny typically triggers “household employee” rules (you might need to pay nanny taxes, etc.). But tax-wise, it’s the same credit. You’d list the nanny’s SSN as the provider on Form 2441. Just like preschool, you get 20-35% of what you pay, up to the limit. (And yes, hiring a nanny means you should be issuing them a W-2 and paying employer payroll taxes if they meet the earnings threshold, so plan accordingly. The IRS does cross-check that the provider you list reports that income.)

Divorced/Separated Parents: Only the custodial parent (the one the child lives with more than half the year) can claim the dependent care credit, even if the other parent pays some of the preschool costs. This is separate from who claims the dependent exemption or child tax credit. So if you’re divorced and your ex is claiming the child as a dependent, but the child lives mostly with you and you pay daycare, you (the custodial parent) are the one entitled to the child care credit. It’s something to coordinate in legal agreements if sharing costs.

Now that we’ve covered federal tax treatment in depth, let’s take a look at how states handle preschool tuition and child care. State taxes can offer additional credits or deductions that supplement the federal credit (or, in some cases, if federal gives nothing, your state might still give a break). Every state is different, so below is a comprehensive state-by-state rundown.

State-by-State Tax Treatment of Preschool Tuition and Child Care

Tax laws vary widely across the 50 states. Some states offer their own version of the dependent care credit or allow deductions for child care expenses, while others piggyback off federal rules or provide no relief at all. It’s important to know your state’s policy, because you might save extra dollars on your state income tax return for those preschool bills.

Below is a 50-state breakdown in a 2-column table, summarizing each state’s stance on child care/preschool expense deductions or credits. (Remember, this is about state income tax – separate from your federal taxes.)

State	State Tax Benefit for Preschool/Child Care
Alabama	❌ No state credit or deduction for child care expenses. (Alabama does not offer any special tax break beyond the federal credit.)
Alaska	N/A – No state income tax. (Alaska has no personal income tax, so there’s no child care credit or deduction needed.)
Arizona	❌ No specific credit/deduction. (Arizona does not provide a state child care tax credit; only the federal credit applies for residents.)
Arkansas	✅ Yes – State credit. Arkansas offers a nonrefundable credit equal to 20% of the federal child care credit. (Max about $210 for one child, $420 for two or more.)
California	✅ Yes – State credit. California has a child and dependent care credit that is income-dependent. It’s up to 50% of the federal credit for lower-income families, phasing out to 0% for high earners (above ~$100k). It’s nonrefundable (unless you have very low income), but can significantly boost your benefit if you qualify.
Colorado	✅ Yes – State credits. Colorado provides a refundable child care credit (50% of the federal credit for incomes ≤ $60k). It also has a low-income child care expenses credit (up to $500 or $1,000) for very low earners who can’t benefit from the federal credit. (These two credits will merge into one enhanced credit by 2026.)
Connecticut	❌ No state credit or deduction. (Connecticut does not offer a child care tax credit or deduction to individuals.)
Delaware	✅ Yes – State credit. Delaware allows a nonrefundable credit equal to 50% of the federal child care credit.
Florida	N/A – No state income tax. (Florida has no state income tax, so no credits or deductions for child care apply.)
Georgia	❌ No state credit or deduction. (Georgia generally follows federal tax provisions and does not have a separate child care credit.)
Hawaii	✅ Yes – State credit. Hawaii offers a refundable child care credit worth 15%–25% of eligible expenses, depending on income. (Expense limits are higher in Hawaii – up to $10k for one child – but the credit % is scaled by AGI.) Working families can get a decent state credit here.
Idaho	✅ Yes – Deduction. Idaho does not have a credit, but it allows a state income tax deduction for dependent care expenses. You can deduct up to $12,000 of qualifying child care costs on your Idaho return – which is quite a generous cap (much higher than the federal expense limit). This deduction helps reduce your taxable income at the state level.
Illinois	❌ No state credit for child care. (Illinois does not offer a dependent care credit or deduction. Illinois does have a small K-12 education expense credit, but that doesn’t cover preschool.)
Indiana	❌ No state credit or deduction. (Indiana currently provides no direct tax credit for child care expenses for families.)
Iowa	✅ Yes – State credits. Iowa has two tax credits: a Child and Dependent Care Credit (refundable, with a sliding scale up to 75% of the federal credit for lower incomes) and a unique Early Childhood Development Credit (up to $250 per child ages 3–5 for preschool tuition and enrichment expenses, which is 25% of the first $1,000 spent). These are available to Iowa families below certain income thresholds (credit phases out if income > $90k).
Kansas	✅ Yes – State credit. Kansas offers a refundable child care credit for individuals, recently expanded to up to 50% of the federal credit starting 2024. (There’s also a separate incentive credit for businesses providing child care, but for personal taxes, you can claim a percentage of the federal credit.)
Kentucky	✅ Yes – State credit. Kentucky provides a nonrefundable credit equal to 20% of your federal child & dependent care credit. (Max $210 for one child, $420 for two or more, mirroring Arkansas and some other states.)
Louisiana	✅ Yes – State credits. Louisiana has a package of School Readiness Tax Credits benefiting families with young children. Parents can claim a refundable credit for child care expenses for children under age 6 enrolled in quality-rated centers. The credit amount ranges from 50% up to 200% of the federal child care credit, depending on the center’s quality rating (higher quality center = bigger credit). This means Louisiana parents could get up to roughly $1,050–$2,100 per child as a state credit (doubling the federal limit for 5-star centers). Louisiana’s credits are famously generous and fully refundable, making child care much more affordable for qualifying families.
Maine	✅ Yes – State credit. Maine offers a refundable credit for child care expenses equal to 25% of the federal credit. If you paid care to a high-quality (state-certified) provider, the credit doubles to 50% of the federal credit. (There’s a refund cap of $500, meaning it will refund up to that amount if your credit exceeds your tax.)
Maryland	✅ Yes – State credit. Maryland provides a Credit for Child and Dependent Care Expenses, which is 32% of the federal credit for most eligible taxpayers. However, it phases out for higher incomes (no credit if your federal AGI is above certain thresholds, around $143k joint in 2023). Maryland’s credit is nonrefundable (any excess can’t be refunded, though some of it may carry forward). Maryland also offers a refundable supplement credit for low-income earners under a certain threshold.
Massachusetts	✅ Yes – State credit. Massachusetts recently introduced the Child and Family Tax Credit. Parents can claim $440 per qualifying dependent (including each child under 13 that you paid care for). This credit replaced previous deductions and is refundable, meaning even if you owe little tax, you get the full amount. Essentially, if you have a child in preschool (or any young child or disabled dependent), you get $440 off your Mass state taxes per child – no income phaseout or expense tracking required. (A welcome simplification!)
Michigan	❌ No state child care credit. (Michigan does not have a dependent care credit or deduction for individual taxpayers. It generally sticks to federal taxable income starting point.)
Minnesota	✅ Yes – State credit. Minnesota offers a fully refundable Child and Dependent Care Credit. It largely mirrors federal rules (up to $3k/$6k expenses) but is targeted to moderate incomes: it starts phasing out when AGI > ~$59k and phases out completely at ~$71k (for one child) to ~$83k (two or more). For those who qualify, it can be more generous than the federal credit because Minnesota doesn’t drop the percentage as low – lower income Minnesotans can get a bigger credit than federal in some cases.
Mississippi	❌ No state credit or deduction. (Mississippi does not offer a child care tax credit for families.)
Missouri	❌ No state child care credit for kids. (Missouri does not have a general child care credit or deduction. Missouri does have a small credit for elder care called the Shared Care Credit, up to $500, but nothing for child-dependent care expenses.)
Montana	✅ Yes – Deduction. Montana allows a dependent care expense deduction on the state return (often referred to as the “Montana Child and Dependent Care Expense Deduction”). In practice, this functions similarly to a credit: Montana taxpayers can deduct qualifying expenses (with certain limits) which effectively yields a modest tax reduction. (The benefit is roughly equivalent to a credit of about $180 for 2 kids, slightly more if 3 or more kids – Montana’s deduction is limited in a way that translates to those savings.) It’s not a huge benefit, but it’s something.
Nebraska	✅ Yes – State credits. Nebraska has a new refundable Child Care Tax Credit (enacted in 2023) for families with young children. It provides $2,000 per child under age 5 in a licensed child care program (if household income ≤ $75k), or $1,000 per child if income is $75k–$150k. (Above $150k, no credit.) This is a significant benefit for Nebraska parents of preschoolers. Nebraska also offers some School Readiness credits for childcare providers and businesses (not directly for families, except the credit above).
Nevada	N/A – No state income tax. (Nevada has no personal income tax, hence no credits/deductions for child care expenses.)
New Hampshire	N/A – No broad income tax. (NH has no tax on wage income – only interest/dividends – so for our purposes, no child care tax provisions.)
New Jersey	✅ Yes – State credit. New Jersey provides a refundable CDCC equal to a percentage of the federal credit, for incomes up to $150k. The percentage is tiered: lower incomes get 50% of the federal credit, scaling down to 10% for incomes $120k–$150k. (Above $150k, no credit.) This helps moderate-income NJ families by boosting their federal credit amount at the state level.
New Mexico	✅ Yes – State credit. New Mexico offers a refundable Child Day Care Credit of up to $1,200 (or $600 for married filing separately). It’s capped at $480 per child. It’s specifically for lower-income taxpayers (roughly under $30k AGI) who incurred child care costs. It’s a nice benefit for low-income working families in NM.
New York	✅ Yes – State credit. New York has a generous Empire State Child and Dependent Care Credit, which can be up to 50% of the federal credit. Notably, New York’s version is refundable for full-year residents. The exact amount depends on income and number of children, but many NY families get a larger credit from the state than they did from federal. (Higher earners still get a credit but at reduced percentages.) Importantly, nonresidents or part-year residents get a nonrefundable or partial credit.
North Carolina	❌ No state child care credit. (North Carolina does not have a dependent care credit or deduction. Instead, NC provides a separate child deduction based on income and number of kids, but that’s unrelated to actual child care expenses.)
North Dakota	❌ No state credit or deduction. (North Dakota currently offers no state-level child/dependent care credit for parents.)
Ohio	✅ Yes – State credit. Ohio offers a refundable credit for child & dependent care, but only to lower-income households. Specifically, if your Ohio taxable income is under $40,000, you can get a credit of 25% to 100% of your federal credit (100% if income < $20k, 25% if $20–40k). For those above $40k income, Ohio unfortunately provides 0% – no credit.
Oklahoma	✅ Yes – State credit. Oklahoma provides a nonrefundable credit up to 20% of the federal credit (technically up to 20% or a flat $5 credit per dependent, whichever is greater, but effectively max 20%). This credit is only available to middle/lower incomes because higher earners in OK instead get to claim a state child tax credit in lieu. In essence, many Oklahoma families can get an additional 20% of whatever federal child care credit they got.
Oregon	✅ Yes – State credit. Oregon has a refundable Working Family Household and Dependent Care Credit. This is an income-based credit that replaced Oregon’s older system. It can be quite substantial for low to moderate incomes, covering a percentage of child care costs (for those who qualify, it often exceeds the federal credit significantly). The credit amount depends on your household income and number of kids, and is aimed at making child care affordable. (Oregon also has a very limited credit for certain disabled/elder care expenses separately.)
Pennsylvania	✅ Yes – State credit. Pennsylvania recently introduced a Child and Dependent Care Enhancement Tax Credit (refundable). It is based on the federal credit but offers fixed amounts: families can get between $600 and $2,100 from PA, depending on number of children and income. Essentially, if you qualified for the federal credit, PA will give you a state credit: up to $1,050 (one child) or $2,100 (two or more) for lower-income, with minimum credits of $600/$1,200 for moderate incomes that hit the expense cap. This was new in 2023 and is a nice boost for PA parents.
Rhode Island	✅ Yes – State credit. Rhode Island offers a nonrefundable credit equal to 25% of the federal child care credit. (You must qualify for the federal credit to get it.) So, it’s a direct percentage add-on to whatever you got federally.
South Carolina	✅ Yes – State credit. South Carolina allows a small state credit equal to 7% of the federal child care credit for full-year residents. It’s capped at $210 for one child or $420 for two or more (which is 7% of the $3k/$6k expense times 35% I believe). It’s nonrefundable and not available to part-year residents or if married filing separately. It’s not huge, but it’s on the books.
South Dakota	N/A – No state income tax. (No personal income tax in SD, so no credits or deductions needed.)
Tennessee	N/A – No state income tax. (Tennessee has no tax on wages/salaries – only on certain investments, which is phasing out – thus no child care tax provisions.)
Texas	N/A – No state income tax. (Texas has no state income tax, so nothing to claim for child care expenses.)
Utah	❌ No state child care credit. (Utah does not currently offer a dependent care credit or deduction. It focuses more on a state child tax credit for dependents, but no credit tied to child care costs.)
Vermont	✅ Yes – State credit. Vermont gives a refundable credit equal to 72% of the federal child & dependent care credit. This is quite generous and fully refundable, meaning Vermont families get back nearly three-quarters of whatever their federal credit was, on top of it.
Virginia	✅ Yes – Deduction. Virginia doesn’t have a direct credit, but it allows a state tax deduction for child care expenses. You can deduct up to $3,000 of expenses for one child, or $6,000 for two or more, from your Virginia taxable income (these amounts align with the federal expense limits). This effectively gives a tax benefit roughly equivalent to a credit of 5.75% of those expenses (since VA’s top tax rate is 5.75%). It’s not as big as a credit might be, but it helps. Notably, Virginia even lets you take this deduction if you couldn’t claim the federal credit due to zero tax liability or other issues, as long as you meet the work criteria. There’s also an extra $1,000 deduction per foster child in permanent care, as a side note.
Washington	N/A – No state income tax. (No personal income tax in WA, so no credits/deductions available or required.)
West Virginia	❌ No state credit. (West Virginia, as of now, does not offer a dependent care credit or deduction for individuals. Residents rely on the federal credit only.)
Wisconsin	✅ Yes – State credit. Wisconsin recently expanded its child and dependent care credit. Starting 2024, Wisconsin matches 100% of the federal credit (previously it was 50%). And Wisconsin raised the expense caps to $10,000 (one child) / $20,000 (2+ kids) for state purposes. This means a Wisconsin family can now get up to $3,000 (one child) or $6,000 (two+) as a state credit – a massive increase from before. It’s nonrefundable, but effectively wipes out a lot of state tax for families paying for child care.
Wyoming	N/A – No state income tax. (Wyoming has no personal income tax, so no applicable child care credits or deductions.)

Note: “No state credit” doesn’t mean you get nothing at all – you still can use the federal credit on your federal return. It just means that particular state doesn’t give you an additional benefit on your state tax return. In states marked with ✅, you have an extra opportunity to save on state taxes, so don’t forget to claim it when filing your state return! For states with deductions, remember a deduction’s value equals the expense times your state tax rate (so often a smaller benefit than a credit of the same size, but still worthwhile).

We can see from this table that about 30 states (and D.C.) provide some type of tax relief for child care. The rest either have no income tax or offer no specific credit/deduction. Always check your state’s latest tax forms or instructions to be sure you claim what you’re entitled to – these rules do change occasionally (for instance, Pennsylvania’s credit and Massachusetts’ credit were new in the last year or two, Wisconsin’s just increased, etc.).

Real Examples: How Preschool Expenses and Tax Credits Play Out

Let’s explore a few detailed scenarios to see how claiming preschool tuition on your taxes actually works. These examples will illustrate the do’s and don’ts and show the differences in outcomes based on various factors:

Example 1: Dual-Income Family, Preschool Tuition Credit

Situation: Maria and John are married, both working full-time. They have a 4-year-old daughter in preschool. In 2024, they paid $8,000 in preschool tuition. Maria earns $70,000 and John earns $65,000 (AGI ~$135,000 combined).

Analysis: They clearly meet the “both working” requirement. Their daughter is under 13 and is their dependent, so she’s a qualifying person. They paid $8,000, but the federal credit limit for one child is $3,000 of expenses. Their joint income is well above $43k, so their credit rate is the minimum 20%.

Federal Child & Dependent Care Credit = 20% of $3,000 = $600. (Even though they spent $8k, the extra $5k doesn’t count for the credit due to the cap.)

They file jointly, attach Form 2441 with the preschool’s EIN and $3,000 listed as expenses (it will disregard the rest). They get $600 off their federal tax. Not huge, but something.

What about other strategies? Maria’s employer offers a Dependent Care FSA. If she had run $5,000 of the preschool cost through the FSA, that $5k would be pre-tax, saving them maybe ~$1,100 in federal tax (since they’re in the 22% bracket plus FICA savings). Then they could only claim $3,000 – $5,000 = $0 for the credit (because the $3k allowable would be offset by the $5k benefit used). In their case, using the FSA would have been more beneficial than the $600 credit.

Ideally, they would use the FSA for $5k and still be able to claim $1,000 of expenses for a credit of $200 on the remaining (since $3k max – $5k FSA used = $0 left, actually they’d max the FSA and forgo credit entirely). If they expect similar costs next year, they should consider maximizing the FSA. This example shows how higher earners often get more bang from an FSA.

State impact: They live in California, which offers a state credit. With AGI $135k, California’s child care credit percentage would drop to 0% (CA’s credit phases out completely for AGI > $100k). So they actually get no state credit in CA. If they lived in New York with that income, they’d still get a NY state credit of maybe 20% of the federal amount = $120. Every state differs.

Example 2: Single Parent, Moderate Income, Full Credit Benefit

Situation: Alexis is a single mom with a 3-year-old son. She works and earns $32,000 a year. Her son goes to a local preschool so Alexis can work. She paid $3,500 in preschool tuition in 2024.

Analysis: Alexis qualifies for the credit (working, head of household filing status, child < 13, etc.). Her income of $32k will give her a credit percentage of around 27% (approximate, since the 35% phases down – $32k AGI likely puts her in the mid range). The expense limit is $3,000 for one child, and she spent $3,500, so $3,000 is countable.

Federal Child & Dependent Care Credit ≈ 27% of $3,000 = $810 (approximately). This directly cuts $810 from her tax. If her tax liability was, say, $1,200 before the credit, it would drop to around $390 after – a significant savings.

She could not use an FSA (her small employer doesn’t offer one), so the credit is her main relief.

State impact: She lives in Ohio, where her income under $40k qualifies her for the state credit. Ohio would give her 25% of her federal credit as a refundable credit. If her federal credit is $810, Ohio’s would be about $203 back. That’s extra cash via her state refund. If she lived in a no-credit state, she’d only have the federal $810.

Example 3: Attempted Deduction – Pitfall to Avoid

Situation: The Thompsons have one child who turned 5 in 2024. He attended a private kindergarten that year and they paid $5,000 tuition. One parent works, the other is a homemaker. On their tax return, they try to deduct the $5,000 as “education expense” or claim the dependent care credit for it.

Analysis: This is a mistake. Kindergarten tuition is not an allowable expense for the Child and Dependent Care Credit (the IRS says schooling from kindergarten up doesn’t count as care). Also, since one parent didn’t work, they fail the work-related test entirely. If they tried to slip this in, the IRS would likely deny it. In fact, the IRS has caught and disallowed many such claims. The U.S. Tax Court has upheld that personal education costs for a child are not deductible and that the dependent care credit cannot be claimed when one spouse isn’t working (barring the limited exceptions).

Better approach: Unfortunately for the Thompsons, with a stay-at-home parent, they aren’t eligible for child care tax benefits. Their scenario is a common misconception. The thing to remember: you can’t deduct grade school tuition on your federal taxes, and you can’t claim the daycare credit if one parent is fully available to care for the child. The Thompsons should not list that $5,000 anywhere on their tax forms; it won’t help and could raise flags.

(On the bright side, if the working parent’s job offers a Dependent Care FSA, sometimes even a non-working spouse scenario can use it if the non-working spouse is a student for part of the year, etc., but that’s not the case here. Or in a state like Virginia, they could potentially take the state deduction if certain conditions met, but generally not.)

Example 4: Special Needs Preschool as Medical Expense

Situation: Dana’s 4-year-old daughter has a severe learning disability. On her doctor’s advice, Dana enrolls her in a specialized therapeutic preschool program that focuses on her developmental delays. The program is costly: $20,000 for the year. Dana’s insurance doesn’t cover it. She wonders if any of this can be tax-deductible, beyond the normal child care credit.

Analysis: Dana will qualify for the child care credit like anyone else (assuming she works). However, $3,000 of $20,000 at 20–35% doesn’t come close to addressing the cost. But because this is a special therapeutic school, Dana may be able to claim some of the cost as a medical expense deduction.

If the primary purpose of the school is to alleviate or treat a physical or mental disability (and a physician recommended it), the IRS allows those tuition fees as a medical expense in Schedule A. Dana would need to itemize deductions and could include the $20k as medical expense. Of course, medical expenses are only deductible above 7.5% of income, which is a hurdle.

But if her income is, say, $80k, any medical expenses above $6,000 would count. So potentially she could deduct $14,000 of that tuition as a medical expense. The tax benefit would be her marginal tax rate times that $14k. If she’s in the 22% bracket, that’s about $3,080 saved in federal tax through itemizing, in addition to the child care credit on the first $3k.

This is a complex scenario and would require documentation (letters from doctors, the school’s credentials as specializing in special education therapy, etc.). It’s something to pursue with a tax advisor. But it highlights that in extraordinary cases, there are additional tax angles.

For most families, Example 4 won’t apply – you’ll be using the credit or FSA routes. But it’s good to be aware of.

Pros and Cons of Using the Child Care Tax Credit for Preschool

To wrap up the discussion on the dependent care credit, here’s a quick pros and cons overview. This will help you understand the advantages of this tax credit, as well as its limitations compared to other possible tax strategies:

Pros of the Child & Dependent Care Credit	Cons and Limitations
Direct Tax Savings: It directly reduces your tax bill dollar-for-dollar (better than a deduction). Even a $600 credit is $600 off your taxes.	Expense Caps: Limited to $3k (one child) or $6k (2+) of expenses – which is often far below actual preschool costs. Any amount you pay beyond those caps gets no federal tax assistance.
Reward for Working Parents: It’s available to working or job-seeking parents, providing a needed break for childcare costs. It effectively subsidizes a portion of daycare/preschool.	Non-Refundable: Under current law, you don’t get the credit back as a refund beyond your tax liability. If you have little or no tax due (perhaps due to low income or other credits), this credit won’t pay out to you (unless laws change or like in 2021).
Broadly Applicable: Covers many types of care – preschool, daycare centers, licensed in-home providers, nannies, day camps, etc. (Gives flexibility to claim whatever care arrangement you use, as long as it’s not schooling K-12 or overnight camp.)	Both Spouses Must Work: For married couples, it essentially forces a two-earner situation (or student/disabled exception). Families with a stay-at-home parent can’t use it, which some feel penalizes traditional single-earner households.
Easy to Claim: Simply fill out a form with provider info; no need to itemize deductions or anything. And there’s no complex phase-in; if you qualify, you get it.	Small Percentage at High Incomes: The credit % drops to 20% for most middle/high incomes – which is modest. Coupled with the low cap, it often covers only a sliver of actual costs (e.g., $600 on a $10k expense feels underwhelming).
Stackable with State Credits: If you live in a state with its own child care credit, your federal claim can trigger an extra state benefit (e.g., 50% more in NY, or a separate refund in PA, etc.). This multiplies the value beyond just the federal savings.	Can’t Combine Same Expenses with FSA: You have to choose between using pre-tax dollars via a Dependent Care FSA or claiming the credit on those expenses. Some planning is required to maximize benefits without double-using the same expense. Also, higher earners might get more benefit from an FSA, making the credit less useful in practice.

Overall, the Child and Dependent Care Credit is a helpful provision – especially if your income isn’t very high or you don’t have access to other savings vehicles. It’s “free money” for doing what you’re likely doing anyway: paying for someone to care for your child. But it has its shortcomings, and many parents find it only chips away at the true cost of childcare. This is why some families lobby for expanding these benefits, and why certain states have stepped up to augment the credit.

Common Mistakes to Avoid (Don’t Let the IRS Disallow Your Claim)

Dealing with taxes is tricky, and child care credits are no exception. Here are some things to avoid and watch out for when trying to claim preschool or child care expenses on your tax return:

❌ Claiming non-eligible expenses: Remember, kindergarten tuition is NOT a qualifying expense for the dependent care credit. If you try to include private kindergarten or higher grades, the IRS will disallow it. Also, expenses like tutoring, dance classes, or summer overnight camps don’t qualify (because they’re not primarily for care while you work, or in the case of overnight camp, the IRS explicitly excludes them). Stick to actual care settings – preschool, daycare, nanny, day camps, etc.

❌ One spouse not working: If you’re married filing jointly and one of you had no earned income (and wasn’t a full-time student or disabled), do not claim the credit. This is a common error. The IRS cross-checks income and will deny the credit if one spouse’s W-2 is missing. Both need earnings (or meet an exception) for the credit to be valid.

❌ Missing provider info (or paying under the table): The tax form requires the caregiver’s ID number. Don’t skip this. If you paid your preschool in cash and don’t have an EIN, or you paid a babysitter who won’t give her SSN, you’re in a tough spot. The IRS can deny the credit without that info. Always get the tax ID from the school or caregiver. Legitimate preschools will provide an EIN on request (often on your tuition statements). For informal care, use Form W-10 to request the SSN. If a provider refuses, technically you can still try to claim the expense by showing due diligence (filling in “Refused” and attaching a statement), but it’s a hassle and invites scrutiny. Best practice: ensure any caregiver is willing to share their tax ID and report the income.

❌ Double-dipping FSA and credit: As discussed, you can’t claim the credit for expenses that were reimbursed by a Dependent Care FSA or paid by your employer. A mistake would be to list the full $5,000 of preschool expense on Form 2441 when you also got $5k from your FSA. The IRS gets your W-2 with a $5k code in Box 10, so they know you had that benefit. They will reduce your credit anyway – but if you try to circumvent it, it’s considered an incorrect claim. Be sure to subtract any employer-provided dependent care benefits from the amount you put on the form.

❌ Not filing the proper form or schedule: If your state has a credit or deduction, don’t forget to claim it on your state return. Many people overlook the state benefit. For instance, in New York, you must complete a separate form (IT-216) to get the state child care credit. In Virginia, you’d need to actually take the deduction on Schedule ADJ. These don’t happen automatically – you have to fill in the forms. Missing out means leaving money with the state that could be yours.

❌ Assuming the credit isn’t worth it: Some parents don’t bother claiming the credit, thinking it’s too small to be worth it, or they are unsure of eligibility. Even if you only get $200, that’s real money. Always run the numbers or let your tax software/CPA check. As long as you qualify, take it! It doesn’t trigger audit red flags if done correctly; it’s a common credit.

❌ Forgetting the age cutoff: The year your child turns 13, you can only claim expenses up until their 13th birthday. For example, if your child turned 13 in June and you paid daycare through December, only the portion before the birthday counts. Many folks don’t realize this subtle rule. The IRS will look at the child’s birthdate and limit the credit accordingly. Plan ahead for that year – after 13, you lose this credit (though if your child can be left home alone at that point, you might not have the expense either, aside from maybe after-school programs which also wouldn’t count once 13).

⚠️ Watch out for audits: Child care credits aren’t audited at extremely high rates, but they can be reviewed. Common triggers include: large amounts of expenses (especially if claiming the max $6,000 for one child – which shouldn’t happen, since max for one is $3k; $6k is for two or more), missing provider info, income mismatch (claiming you’re looking for work but you actually had no wages and didn’t file unemployment, etc.). If audited, the IRS may ask for documentation: proof of payments (canceled checks, receipts) and that you actually had the care arrangement. Keep a folder with receipts or year-end statements from the preschool or daycare. If paying an individual, keep a log of amounts and dates, and ideally pay in traceable ways.

By avoiding these pitfalls, you can confidently claim what you’re entitled to without hassle. When in doubt, consult IRS Publication 503 (Child and Dependent Care Expenses) for detailed guidance – it’s the go-to resource that tax professionals and parents alike refer to for the nitty-gritty rules.

Key Terms and Concepts for Preschool Tax Questions

Before we conclude, let’s clarify a few important terms and tax concepts that have come up, to ensure there’s no confusion:

Child and Dependent Care Credit (CDCC): The official name of the tax credit you claim for work-related child care expenses (including preschool). “Dependent care credit” or “child care credit” in this article all refer to this. Not to be confused with the Child Tax Credit (CTC), which is a separate credit just for having children (with no requirement of expenses).

Form 2441: The IRS form filed with your 1040 to claim the CDCC. If you’re filing taxes and want this credit, make sure Form 2441 is completed. It calculates the allowed credit and also documents any dependent care benefits from your employer.

Dependent Care FSA (Flexible Spending Account): A benefit offered by some employers that lets you pay for child care with pre-tax dollars (up to $5,000 per year). It appears on your W-2 and reduces what you can claim for the credit. Often labeled as Code “DD” or “Dependent Care Benefits” on the W-2. Use of an FSA can be an alternative to the credit or complementary for additional expenses beyond the credit cap.

Qualifying Person: For the purpose of the credit, this is the person who received the care. Typically your child under 13. A spouse or other dependent who is physically or mentally incapable of self-care also counts (for those who might be caring for an elderly parent, etc., though that’s outside our preschool scope).

Work-Related Expense: A key phrase meaning the expense was incurred to allow you to work or look for work. If you or your spouse were not working (or seeking work), the expense is not “work-related” in IRS eyes, and the credit won’t apply. Volunteer work doesn’t count (must be a paying job or actively job-hunting). If you are a student, the IRS assumes you are working for purposes of the credit.

Earned Income: Generally, wages, salaries, tips, self-employment earnings. For the credit, your eligible expenses are limited to the amount of the lesser-earning spouse’s earned income (if married). If one spouse earns $50k and the other earns $2k, then at most $2k of expenses could qualify, because one spouse didn’t earn much (this prevents abuse in edge cases). Students/disabled spouses get “deemed” earned income of $250/month (one child) or $500/month (two or more) for each month they qualify, to allow some credit.

U.S. Tax Court cases: Occasionally mentioned to highlight that these rules have been tested in court. For example, cases where someone tried to deduct childcare as a business expense (the court said no – it’s personal), or cases about whether a nanny’s wages were eligible (yes, if properly documented), etc. The Tax Court generally follows the IRS regulations closely on this topic. Knowing that courts have upheld disallowances helps taxpayers realize the IRS means business with these requirements.
- One famous Tax Court quote in a denial of a childcare credit claim was essentially: “Having a child is a personal choice and responsibility, and the related expenses, no matter how necessary, are personal and not deductible.” That sums up the strict stance on deductions – hence why we only get a credit as a specific carve-out.

Educational vs. Custodial Care: A distinction we touched on – if an expense is for education (like tuition for actual schooling), it’s not covered by the care credit. If it’s for care (supervision, wellbeing), it is. Sometimes the line blurs (preschools educate too), but the IRS classification is based on the child’s age and nature of program (pre-K is care, K-12 is education).

Now, let’s address a few frequently asked questions that often come up from parents (in forums, Reddit, and tax offices alike) about preschool expenses and taxes.

FAQs (Frequently Asked Questions)

Q: Can I deduct private preschool tuition on my federal taxes?
A: No. There is no federal tax deduction for private preschool or daycare tuition. You can only get a tax break via the Child and Dependent Care Credit or a Dependent Care FSA.

Q: Is nursery school or preschool considered “child care” for tax purposes?
A: Yes. The IRS counts preschool (and nursery school) as a form of child care, as long as it enables the parent to work. Those costs can qualify for the dependent care credit.

Q: If my child is in kindergarten, can I claim those fees for the Child Care Credit?
A: No. Kindergarten (and higher grades) are viewed as education, not eligible child care. The credit only covers care for children before they reach kindergarten (plus after-school care for older kids under 13).

Q: My spouse stays at home with our kids. Can we get any child care tax credit?
A: Generally no, not if one spouse had no earned income. The credit is intended for when both parents work or are looking for work. A stay-at-home parent means the family doesn’t qualify for the dependent care credit.

Q: Do I need the preschool’s tax ID number to claim the credit?
A: Yes. You must provide the care provider’s name, address, and Employer ID Number (or SSN if an individual) on your tax form. Without it, the IRS can deny your credit.

Q: Can I use a 529 plan or Coverdell ESA to pay for preschool and get tax-free growth?
A: No. Tax-advantaged education savings plans (529 or Coverdell) cannot be used for expenses before kindergarten. They only cover K-12 tuition (kindergarten and up) or higher education.

Q: Are there any federal programs that help with preschool costs?
A: Outside of tax provisions, the main federal support is funding for programs like Head Start or childcare subsidies for low-income families. But on your tax return, the help comes from the Child/Dependent Care Credit or possibly the Earned Income Tax Credit (indirectly, if you qualify).

Q: What if the preschool is half-day and only allows me to work part-time? Can I still claim it?
A: Yes. Even if the program is part-time, if you use that time to work or search for work, the cost can be claimed. Your work hours and care hours just both need to exist – it’s fine if it’s not full-time care.

Q: My child’s grandma watches him after preschool. I give her $100 a week. Can I claim that?
A: Possibly, yes. Paying a relative for care is allowed if that relative is not your dependent and you report their name/SSN and amount. Note that grandma is supposed to report that income on her taxes too. You also cannot pay the child’s other parent for care and count it.

Q: We paid our church for a preschool program. Can we count that, or is it a donation?
A: You count it as child care expense for the credit. It’s a fee for services, not a charitable donation, so you cannot double-dip and call it a donation. Use it for the credit, and get the church’s tax ID if it’s required (most churches have an EIN).

Q: My 12-year-old goes to after-school care; can I claim that?
A: Yes, after-school programs or babysitters for a child under 13 are eligible expenses for the credit. Once the child turns 13, expenses after that point are not eligible.

Q: Do I need receipts for the IRS to prove my preschool expenses?
A: Usually you don’t submit them with your return, but keep receipts or statements in your records. If audited, you’ll need to show proof of payment (cancelled checks, receipts, year-end statements showing tuition paid, etc.).

Q: What if I qualify for the credit but my tax owed is zero?
A: If your tax liability is zero, a nonrefundable credit won’t give you money back. The Child and Dependent Care Credit currently is nonrefundable (except for that one year in 2021). In this case, you wouldn’t get any benefit from it. Check if your state’s credit (if any) is refundable – some states will still give you a refund.

Q: Is the Child and Dependent Care Credit the same as the Child Tax Credit?
A: No, they are different. The Child Tax Credit (CTC) is for having a qualifying child (no spending required) and can be up to $2,000 per child (refundable up to $1,600 in 2024). The Dependent Care Credit is only if you pay for child care to work. You can potentially claim both if eligible.