Paying for Childcare
Many of us chose the location of our homes based on the local school district. As a working parent, it was a big relief to not have to pay for pre-school childcare anymore. With the growing likelihood of school districts conducting in-person schooling for part of the week only, that continues to leave working parents in a bind.
Neverland Virtual Reality has recently offered a solution to support this new normal. Visit our Education Support page to learn more about that. This blog post is focused on funding resources that many of us may have forgotten about or simply don't know about.
Child and Dependent Care Tax Credit
First, non-overnight childcare expenses that facilitate a parent working or looking for work are still tax deductible. Depending on whether a household qualifies for this tax deduction, the value amounts to that household's effective tax rate times the cost of the childcare.
For example, at an effective tax rate of 20%, our 4-month education support service would yield a value of $1,200. Therefore, the effective cost of our 4-month service would be $6,000 - $1,200 = $4,800; or $1,200 per month.
For the 3-day partial week education support service, this childcare deduction amounts to $672 (20% effective tax rate). Therefore, the true cost for this 4-month program would be $2,688 or $672 per month.
Dependent Care Flexible Spending Account (FSA)
For those families that already budgeted for this amount as part of a Dependent Care FSA program, these funds can be used to help pay for our education support service.
The federal government lists additional information for childcare on the childcare.gov website.