Childcare is a significant decision and a major expense that thousands of families have to manage on a daily basis. For most, it’s not a choice: Without work, there is no money, and we can’t bring our kids to work. That can be intensely stressful for parents who have to balance the demands of their budget with what they want for their children, worrying all the while about the quality of lower-priced care. Affordable care is most crucial for low-income parents who have to work longer hours, work at more than one job, and in some cases continue their education at the same time. Finding affordable and trustworthy care is often both desperately necessary and extraordinarily difficult.
There are programs established to help families who need assistance caring for their children, and resources that parents can use to find help and ease the burden of the associated expenses. These include federal tax credits, subsidy assistance delivered through state agencies, and more.
Let’s review the most common types of care arrangements.
Child Care Centers – These centers (sometimes referred to as day care centers) are non-residential, meaning that they provide care at places that are not homes. Licensed specialists look after your child during the center’s business hours.
Family Child Care – This set-up is designed to accommodate children of different ages, typically within a caretaker’s home, and can be flexible enough to meet the schedules of the parents. Many parents prefer home care to a non-residential facility, and the caregiver in these arrangements is typically the same individual or team on a consistent daily basis.
Part-time Preschool – For part of the day, staff members who specialize in working with children five years old and younger look after, supervise and prepare children for formal schooling and help them learn to socialize with each other.
Community Recreation Facilities – These facilities provide program activities for school children who are already in school so that they can participate in healthy, often physical activities after school and on weekends. Sports, games, performing arts and visual arts are often on the activity menu. These programs are often available at a school, at a local community center or gym, at a church, temple or synagogue or other space dedicated to recreation activities.
Playgroups and Parents Cooperatives – A group of parents takes turns creating and overseeing group activities involving each other’s children. Parents volunteer to supervise a group of children, usually including their own, for a set number of hours.
Babysitter/Nanny – A babysitter or nanny is a versatile but high-cost option for parents who prefer a dedicated individual to look after kids at their home. This option requires a high level of parental responsibility in checking the backgrounds of prospective caretakers as part of the selection process. There is helpful guidance about the process of finding a caretaker that parents can read. For example, at the bottom of this article, there is a resource link called Selecting A Babysitter/Nanny with a PDF document that provides useful information on selecting and hiring an individual caregiver.
Each of these options has a place, and each has advantages and disadvantages. Assistance programs may provide one or more of these services directly or may provide subsidies or tax breaks to help offset their cost.
Let’s look at some of the most popular and useful sources of assistance. We list links to organizations discussed here at the end of this article.
Child Care Aware/National Association Of Child Care Resource And Referral Agencies
Each state has an agency that provides information and guidance on this critical issue. There’s also a national umbrella organization called Child Care Aware, managed by the National Association of Child Care Resource and Referral Agencies (NACCRRA). Child Care Aware helps parents across the country to connect with local providers and referral agencies that suit their specific needs and preferences.
Assistance For Low-Income Families
There are assistance programs in place across the country that offer child care subsidies for low-income families. In most cases, the money comes from the federal government, but the programs are administered on the state level. The amount of help available and the requirements will vary from state to state. The federal government also offers its own child care tax credit, which offers significant tax breaks to compensate for the costs of arranging care for children. Military families are eligible for assistance.
Contact your local or state Child Care Assistance Office (see link at the end of this article) for more information.
Head Start/Early Start
The U.S. Department of Health and Human Services provides funds to states to run Head Start and Early Start programs, which provide free care and other services to low-income families. In most states, families with an annual income of $20,090 or less (for a family of three) can qualify for Head Start/Early Start, which prepares children under the age of 5 for school and provides additional health and social services. To find the office in your state, check the Head Start/Early Start resource link at the end of this article.
Child Tax Credit
The US government provides a tax credit that allows parents to reduce their federal income taxes up to $1000 for each qualifying child younger than 17 years old, which can help to offset the cost of care. Your tax preparer can determine the actual amount of the credit using Internal Revenue Service guidelines, Publication 972 and Schedule 8812. To qualify for the credit, the son or daughter must be younger than 17 years old, with a relationship to the parent/tax filer as a son, daughter, step child, foster child, brother, sister, stepbrother, stepsister, or legally adopted child. The dependent cannot provide more than half of his or her support, and parents must claim the dependent on their federal tax return to qualify. The dependent must be a U.S. citizen, U.S. national or U.S. resident alien, and must have lived with the parent filing the federal tax return for more than half of the tax year. See the link below for more information on this vital tax credit.
Child And Dependent Care Tax Credit
If you have paid someone to take care of your kids or another dependent so that you could work, look for work, go to school, or because the dependent is disabled, you may be able to claim this tax credit. It can be worth between 24% and 35% of the amount you paid for care, depending on your income. That percentage is taken from up to $3000 of expenses per dependent. You should have a qualified tax preparer calculate the actual amount of the credit. The bad news: This credit is not refundable, so it is worth nothing if you don’t owe income tax.
Earned Income Tax Credit
Low to moderate-income working individuals and couples, especially those with children, can apply for the Earned Income Tax Credit, also known as the Earned Income Credit. Your tax preparer will calculate the actual amount, which will depend on your income and number of children, whether each child meets the relationship, age, and shared residency requirements set out in Internal Revenue Service Publication 596.
Military Family Support
Military parents can obtain childcare or childcare fee assistance through Child Care Aware of America in partnership with the U.S. Department of Defense and the U.S. Military. Eligibility requirements will depend on your branch of the military where the parent serves. A resource link called Military Family Support is included below through which parents serving in the Navy, Army, Air Force, or Marine Corps can find out more about eligibility for support.
Financially stressed parents who need child care to give them time to work can tap many resources to meet that need. The federally funded Child Care Aware/National Association Of Child Care Resource And Referral Agencies is an umbrella entity that can help connect parents to local childcare providers and assistance agencies. State agencies administer most of these programs, and the requirements and services offered will vary from state to state, so contact your local Child Care Assistance Office to get up to date on what’s available in your state. The US government also offers significant tax breaks to help offset the cost of care. Consult your tax preparer for more information.
Trying to raise children and earn a living at the same time can be an enormous burden, especially for single parents, parents with limited income, multiple jobs, or both, or parents who are working and trying to improve their educational level at the same time. If you’re in one of these categories, you and your children deserve any help you can get. Help is out there, and it’s worth the effort it takes to find it!