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 The cost of paying for child care is a major consideration for most families. There are many reasons why child care can be so expensive. Some of the reasons include low ratios of adults to children, teacher or provider qualifications, location of care, and costs of space, insurance, equipment, and special programs. Quality care for infants and toddlers can be especially expensive, due to small group sizes. Hiring an in-home caregiver tends to be the most expensive form of care, followed by centers and family child care homes.
Find out more about the cost of care, government assistance, employer-sponsored programs, and tax credits that may be of benefit to you.
You may know that the money you spend on child care qualifies your family for some federal and state tax credits. Knowing what you are eligible to receive for tax credits can help when you are preparing your taxes each year.
Child and Dependent Care Tax Credit: Helps families pay for child care for children under the age of 13, if the parents are working, or looking for work. Parents who are full-time students can also claim the credit. Qualifying care includes child care centers, family child care homes, and care provided by paid friends or relatives -- as long as the relative is not a dependent of the taxpayer. The size of the credit depends on the number of children in care, your family income, and the amount you paid for child care during the tax year. There are limits on the credit given for one child, and two or more children.
Earned Income Tax Credit: A refundable tax credit for low- and moderate-income families, particularly those with children. The EITC is based on family income and the number of children in the family. Both single- and two-parent families are entitled to the credit, as long as one parent is employed.
As a Maine resident, you are eligible for a tax credit if you place your child or children in a "quality" child care center or home. This tax credit is available for child care expenses incurred after December 31, 2000. The credit is refundable up to $500. To be considered a "quality" program, a provider must meet certain criteria:
Child care centers must meet one of the following:
OR
Family child care providers must meet one of the following:
OR
- The provider holds at least one of the following:
In addition, providers MUST HAVE a "Certificate of Quality" issued by the Department of Human Services.
For further information click on: www.state.me.us/revenue/incomeestate/childcare.html
When you hire an in-home caregiver, you become an employer under federal law. You need to be aware of laws regarding taxes, verification of employment eligibility, and minimum wage. For information on these topics, contact the Department of Labor, the Internal Revenue Service, an accountant, a tax advisor, or an insurance agent.
Some companies offer a Dependent Care Assistance Plan (DCAP) program, which allows employees to set aside up to $5,000 of their pre-tax salary per year to pay for dependent care expenses. There are certain restrictions that apply -- e.g., unspent funds are usually not refundable to the employee. Speak with the benefits coordinator at your workplace for more details on the plan.
Many employers now offer some form of employer-sponsored child care assistance to their employees. Some examples of assistance include:
- Matching funds or subsidy programs that are paid for by the employer for employees’ child care needs. This is offered as an employee benefit.
- Work and family resources, offered through the HR department, that may include enhanced CCR&R services in child care, elder care, and work/life issues.
- Employer funding for camp programs for employees’ children during school and summer vacations.
- Some employers offer on-site care for mildly ill children and emergency back-up care.
- Many employers find that providing on-site child care creates benefits both for the employee, by providing reduced tuition costs and stress-relief, and for the employer, with increased productivity, retention, and hiring incentives.
| Average Costs for Child Care |
These are the average weekly rates for child care centers in the Aroostook County region. Please note that these rates are subject to change.
Center Average Weekly Fees for Full-Time Care; Age Groups: Infant $164.00; Toddler $150.00; Preschool $133.00; Kindergarten $95.00; School-age $85.00.
These are the average weekly rates for family child care homes in the Aroostook County region. Please note that these rates are subject to change.
Family Child Care Homes Average Weekly fees for Full-Time Care Infant $85.00; Toddler $85.00; Preschool $85.00; Kindergarten $82.00; School-age $80.00.
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