Making a go in the professional world is difficult while taking care of a family. While parents work eight or more hours a day, we need to know that our kids are well cared for in our absence.
However, parents often have to make sacrifices to cover the cost of child care. The average price for day care for infants is $10,468 per year, according to 2016 Care.com member data, but it can range above $20,000. The average for toddlers is $9,733, with a top range of over $18,800. And the average cost of a nanny for one child is $28,905, with a range of about $27,000 to nearly $33,000.
What is a frazzled parent to do?
My adventures in child care story
I know all too well the struggle with the juggle. My kids were 28 months apart and my husband traveled a lot, so we got a nanny. It was expensive, but it provided peace of mind. The nanny was an extension of our family, and my children learned Indonesian, their dad’s native language.
When my kids were old enough for pre-school, they attended a cooperative nursery school. With a co-op, there is a teacher, assistant teacher and a parent volunteer every day. Not only did we save money on pre-school tuition, it was an enriching and rewarding experience. Please don’t laugh, but here in the Washington, D.C., metro area, pre-school is actually more than in-state college tuition at the flagship institution University of Maryland, College Park.
Later on we turned to Grandma and Grandpa for help. Monday was Grandparents Day for my son, while Wednesday was Grandparents Day for my daughter. My parents and children alike cherished this special time together.
Cut back on costs, not care
Coming up with a strategy for quality child care arrangements at a price you can live with involves coordination of schedules and tax benefits. It takes a village, but there are ways to make it more affordable without compromising safety or well-being.
Each parent could consider asking for a four-day workweek and/or the ability to work from home. This means only having to pay for three or four days of child care instead of five.
Parents should look to see if day cares offer a price reduction in the event a child is not there. Also look into trimming costs such as meal costs if your child is only there part-time.
They could create a group with trusted friends and family members to take turns babysitting for each other’s children. Meet each week either in person or by phone conference to discuss issues or concerns. A small fee could be collected to pay for gas and other items needed to watch the kids.
Take advantage of tax breaks on expenses
Many companies offer a benefit called a flexible spending account, which allows employees to put money from their paychecks into a type of savings account. The account is used to pay for out-of-pocket expenses, such as health and dental care … and child care. As an employee, you don’t pay taxes on the money in the account.
According to the Institute on Taxation and Economic Policy, almost half of the states offer some variation of a state income tax break for families with dependent care expenses. Of those, the majority (22 states and the District of Columbia) model their state credit after the federal credit.
The Internal Revenue Service maintains that if you paid someone to take care of your child, spouse or dependent last year, you may be able to claim the Child and Dependent Care Tax Credit on your federal income tax return. The CDCTC provides a credit worth 20% to 35% of child care costs, up to $3,000 per individual, for a child under age 13 or any dependent who is physically or mentally incapable of self-care. Eligible child care expenses are limited to $6,000 per family. The child care must be necessary in order for you and/or your spouse to work or find work or go to school.
A useful resource is Child Care Aware, which allows users to click on a state to view info on child care benefits. Visit http://childcareaware.org/resources/map/.
Another resource is the Office of Child Care, which provides a state-by-state directory of Child Care Development Fund (CCDF) grantee state and territory contacts. Visit https://www.acf.hhs.gov/occ/resource/ccdf-grantee-state-and-territory-contacts.