2023 - ERB FINANCIAL

  • Home
  • About
    • Our Company
    • Our Team
  • Tax
    Services
  • Investment
    Services
  • Resources
    • Helpful Links & Websites
    • Financial Calculators
    • Tax Topics
    • Tax Preparation Checklist
    • Newsletters
    • Forms & Worksheets
    • Women and Investing
  • Blog
  • Contact
    • Contact Us
    • Driving Directions
  • broker

How can I get a tax break for child care?

More than 60% of children under age six in the United States have two parents in the workforce. 1Many of these working parents must spend a burdensome share of their earnings on child care, especially if they don’t have relatives who are willing and able to help out.

The following tax benefits may help you offset some of the costs paid for a nanny, babysitter, day care, preschool, or day camp, but only if the services are used so you can work.

Child-care tax credit

Families with one qualifying child (typically age 12 or younger) can claim up to $3,000 per year in child-care expenses; those with two or more qualifying children have a $6,000 annual limit. The credit is worth 20% to 35% of eligible child-care expenses, depending on income. As income rises, the credit amount drops until it hits a minimum of 20% for households with $43,000 or more in adjusted gross income.

For example, families with one qualifying child can receive a credit of $600 to $1,050; those with two or more children can receive a credit of $1,200 to $2,100. A tax credit lowers a family’s tax liability dollar for dollar.

Dependent-care flexible spending account (FSA)

Higher-income families may realize a bigger tax benefit from an FSA if it is offered by an employer. Up to $5,000 a year can be set aside to cover eligible child-care costs for qualifying children, and this money is free of federal income tax and Social Security and Medicare taxes. You are not allowed to use pre-tax money from an FSA and take a credit for the same expenses. However, after spending $5,000 from an FSA, you may take a tax credit for up to $1,000 in additional child-care expenses if you have more than one child.

 

          1Child Care Aware® of America, 2017

IMPORTANT DISCLOSURES

ERB FINANCIAL is an independent contractor who offers Investment Advisory Services & Securities through Excel Securities & Assoc., Inc. member FINRA, SIPC, 200 Canal View Blvd., Rochester NY 14623, 585-424-1234.

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

This communication is strictly intended for individuals residing in the state(s) of NY. No offers may be made or accepted from any resident outside the specific states referenced.

 

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019.

Filed Under: Articles, Children, Tax Topics

Call: (585) 426-8190

sidebar-Group-Indoors

Retirment Savings Challenges for Women


©2025 Broadridge Investor Solutions, Inc.

Receive Our Newsletter

Subscribe Now

Recent Posts

  • Erb Financial: June Newsletter 2025
  • Peer-to-Peer Payments Are Popular, but Be Careful
  • Fine-Tuning with Sector Funds
  • Will You Pay a Medicare Surcharge?
  • State and Local Sales Tax Across the Map
  • Erb Financial: May Newsletter 2025
  • Are Extended Warranties Worth It?

Post Topics

Recent Posts

  • Erb Financial: June Newsletter 2025
  • Peer-to-Peer Payments Are Popular, but Be Careful
  • Fine-Tuning with Sector Funds
  • Will You Pay a Medicare Surcharge?
  • State and Local Sales Tax Across the Map

Tax Help

Investment Help

Subscribe to Newsletter

Financial Calculators

Call: (585) 426-8190

rochester erb financial
Contact Us

rochester erb financial Check the background of this investment professional on
FINRA’s BrokerCheck

Copyright 2019 - ERB FINANCIAL is an independent contractor who offers Securities and Investment Advisory Services through Ashton Thomas Securities, LLC, member FINRA/SIPC, 200 Canal Park Blvd, Rochester, NY 14623, 585-424-1234 • Ashton Thomas Securities, LLC and Erb Financial are separate entities; There is no common ownership between the two. Ashton Thomas Securities, LLC is a Member of [FINRA] and [SIPC]
[financial advisors websites]

  • Home
  • About
    ▼
    • Our Company
    • Our Team
  • Tax
    Services
  • Investment
    Services
  • Resources
    ▼
    • Helpful Links & Websites
    • Financial Calculators
    • Tax Topics
    • Tax Preparation Checklist
    • Newsletters
    • Forms & Worksheets
    • Women and Investing
  • Blog
  • Contact
    ▼
    • Contact Us
    • Driving Directions
  • broker