Having children is not an easy task. You are responsible for someone else and they are entirely dependent on you. Even if you planned on your little angel, no one can fully prepare for the increasing costs of child care and how fast it has grown over the years. Child care costs could reach up to 10% of your income, according to Care.com in the 2020 Cost of Care Survey. It might seem overwhelming to think about. But, there are options that can help you afford child care. Fortunately, you may not have to carry the full weight of child care only on your shoulders.
What are Child Care Subsidies?
Child care subsidies are the federal government’s way of helping you and your child. With child care subsidies, you will be able to, more easily, afford quality child care. You will not only find child care subsidies from the state; there are other sources for child care subsidies. Your employer and your children’s school can help with child care, as well. There are eight different forms of child care subsidies that you can receive. The subsidies come in the form of tax credits, discounts on child care, and financial assistance. However, you should keep in mind that each form of child care subsidies is implemented differently. Also, you might find that there are states that vary in administration and eligibility.
Subsidies from the State
The federal government tries to lend a hand with child care by providing funds to states to help combat the rising costs of child care. Funds to individual states are used to provide assistance to qualifying families. But, the child care subsidies might be provided in different ways; it varies from one state to another. Typically, child care subsidies that are offered by the state have very strict income eligibility, and apply mostly for families who have children under the age of 13. If you have a child with a disability, the age limit could be extended. Make sure you check the type of child care subsidies available and the eligibility requirements.
Assistance for Military Families
For military families, the federal government provides child care subsidies. Members of the military and the U.S. Department of Defense can receive child care subsidies. However, each military branch of service or agency determines the eligibility requirements of military families. If you want to find out the eligibility requirements for your military branch or agency, then you can visit Child Care Aware of America. There are different eligibility requirements for the U.S Army, the U.S Marine Corps, the U.S Navy, and the U.S Air Force. Child Care Aware of America is responsible for administering child care subsidies for all qualifying military families.
Child and Dependent Care Tax Credit
If you are a working family, then you might be able to receive a tax break through the Child and Dependent Care Tax Credit. This tax credit will allow you to itemize up to $8,000 in child care expenses for each child. You will have a maximum limit of $16,000. When you file your personal income tax return, make sure to use IRS Form 2441 to itemize child care expenses per child. However, if you have more than one child and you have a Dependent Care Flexible Spending Account (FSA), then the situation is a little different. You can receive a tax break, only if you set aside a maximum of $10,500 in your FSA. Typically, you will claim approximately $5,500 towards the Child and Dependent Care Tax Credit.
Child Tax Credit
If you want to maximize the money you have, then you should consider the child tax credit. As soon as your little bundle of joy is ready to meet the world, you are qualified for the child tax credit. Child tax credit can reach up to $3,000 for every child you have that is under 18 years old. If your child is under the age of 6, then you can receive child tax credit up to $3,600. The eligibility requirement and the amount you receive depends on several factors. To find out the eligibility requirements, you should visit the Internal Revenue Service website.
Earned Income Tax Credit
The Earned Income Tax Credit is a form of tax credit that is accessible to low-income to moderate-income working families. This tax credit can reach from a few hundred dollars to several thousand dollars. The Earned Income Tax Credit determines the amount you can claim based on how many children are in your family and your filing status. If you want to know whether you qualify for the Earned Income Tax Credit, then you should visit the Internal Revenue Service website. The IRS website will also inform you on how to file for the EITC.
Dependent Care Accounts
Believe it or not, you can receive child care subsidies through your employer. The federal government employers with Dependent Care Accounts. Dependent Care Accounts are a form of Flexible Spending Accounts and the eligibility requirements are the same. If you and your spouse are working or going to school and you have children who are younger than 13 years old, you can qualify for a Dependent Care Account. You can receive child care subsidies from a Dependent Care Account, only if your job offers the account. You will be able to set aside up to $10,500 in pre-tax dollars to pay for child care costs. So, if you want to find out if your company offers Dependent Care Accounts, then you should contact your Human Resources department.
Child Care Network Programs
With larger companies and corporations, you will find that they have created relationships with child care providers. Child care providers offer reduced prices and discounts to the employees of the corporation. Typically, these child care providers offer both short-term child care and long-term child care. To find out if your company offers a Child Care Network Program, you should contact your Human Resources department. Make sure that your company has established relationships with child care providers and find out how you can receive discounts.
In the case that you and your spouse are students, you might find that your school offers child care subsidies. There are some universities that provide plans for families to assist in paying for different types of child care. If you are eligible, you can receive on-campus child care at a reduced cost. Additionally, there are some states that provide grants for students who cannot afford to pay for child care. However, these grants are distributed through different offices in varying branches. So, if you want to find out about school-sponsored child care subsidies, then you should check with your college or university.
Overall, you will find that there are many different resources for child care subsidies. Taking care of a child is stressful enough, without worrying about the costs associated with child care. You should consider applying for any of these child care subsidies to provide financial relief. Additionally, you will find that there is a form of emotional relief, since you do not have to carry the burden on your own. You are not alone and you do not have to take care of your child or children alone. There is help out there; you just need to know where to look.