If you pay for your child to attend preschool, you may be eligible for specific tax credits or deductions. The preschool location and organization are not restricted, as long as they meet specific provider tests. If you're not sure whether your preschool service and purpose meets the IRS requirements, contact an IRS specialist or talk to a professional tax adviser.
Working Child Care
If you pay for child care services so that you can work, attend school full time or look for a job, a portion of the costs of your child care may be tax deductible when you meet certain other requirements. Only those costs incurred while you're working, looking for work or attending school are allowed to be applied to the child care tax credit.
To qualify for taking the child care tax credit, you must have a source of earned income in the tax year. If you are married filing jointly, both you and your spouse must have a source of earned income unless one of you is a full-time student or disabled. Earned income is income generated from job wages, tips, unemployment or self employment.
The child that you pay preschool tuition for must meet the qualifying child definition of the IRS. For the child care tax credit, that means the child must be your dependent, under 13 years of age and not claimed as a dependent on another person's tax return. In addition, you must have provided more than half of the support for the child during the tax year.
The preschool you choose to send your child to can be a business, church, charity or individual that is considered to be a qualifying provider. A qualifying provider cannot be a dependent of yours, and it cannot be your own child who is not your dependent. A qualifying provider also cannot be your spouse or the parent of the child you are sending to preschool. When claiming the child care tax credit, you must provide the name, address and tax identification number of the church preschool providing service.
- IRS.gov; Topic 602--Child and Dependent Care Credit; February 7, 2011
- IRS.gov; Ten Things to Know About the Child and Dependent Care Credit; March 7, 2011
- IRS.gov: Work-Related Expense Test
- Internal Revenue Service. "What’s new with the child tax credit after tax reform." Accessed Sept. 21, 2020.
- Internal Revenue Service. "Publication 972: Child Tax Credit," Pages 1, 3. Accessed Sept. 21, 2020.
- Internal Revenue Service. "Child Tax Credit and Credit for Other Dependents at a Glance." Accessed Sept. 21, 2020.
- Internal Revenue Service. "Publication 501: Dependents, Standard Deduction, and Filing Information," Page 11. Accessed Sept. 21, 2020.
- Internal Revenue Service. "Dependents." Accessed Sept. 21, 2020.
- Internal Revenue Service. "Publication 504 (2018), Divorced or Separated Individuals." Accessed Sept. 21, 2020.
- Internal Revenue Service. "Publication 501: Dependents, Standard Deduction, and Filing Information," Page 17. Accessed Jan. 28, 2020.
- Internal Revenue Service. "Publication 5334: Do I Qualify for EITC?" Accessed Sept. 21, 2020.
Kathy Burns-Millyard has been a professional writer since 1997. Originally specializing in business, technology, environment and health topics, Burns now focuses on home, garden and hobby interest articles. Her garden work has appeared on GardenGuides.com and other publications. She enjoys practicing Permaculture in her home garden near Tucson, Ariz.