Is preschool tax deductible? It depends on how you file

Parents Of Preschoolers Could Have A Tax Benefit Waiting For Them

It's all about how you file.

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Chances are you have a few questions about filing your 2021 taxes in 2022 after a rollercoaster of a year. Parents in particular will want to get the most credit possible for their child’s expenses. With this in mind, is 2021 preschool tuition tax deductible? Here’s what financial and tax experts want parents of preschoolers to know.

“Preschool and day care are not tax deductible, but you can be entitled to credits instead, which could mean better tax benefits for you,” Paul Sundin, a CPA and tax strategist at Emparion, tells Romper. And these credits can be very helpful for parents. “Any type of school payment — pre-school, elementary, middle school, or high school — is not tax-deductible,” Rafael Alvarez, founder and CEO of ATAX, tells Romper. (College tuition is the exception.)

For families looking to claim preschool as a tax benefit, you must file this tax under the Child and Dependent Care Expenses tax credit. And thankfully, the amount of credit you can get back increased this year. Thanks to the American Rescue Plan of 2021 — the pandemic relief package that went into place in March 2021 — that tax credit was expanded to up to 50% of qualifying child care expenses with a $8,000 maximum for one qualifying person, and $16,000 for two or more qualifying individuals per child.

However, it is important to note that the more a taxpayer earns, the lower the percentage of employment-related expenses are considered when determining the credit. If your adjusted gross income is more than $125,000, the 50% threshold will be reduced. That being said, it was still increased from previous years’ tax credit. Everyone’s situation is different, but these credits will likely help you feel a little more satisfied after filing.

How to qualify for child and dependent care credit


This is where things really start to feel like dealing with taxes, so buckle up. “The details can be super technical,” Michael Bloch, the founder of Pillar Life (now Acorns) and a partner at Quiet Capital, tells Romper. He notes, though, that the main points families need to think about to see if they qualify are the following:

  • You are the main caretaker or custodial parent of the child
  • You have someone take care of your child so you can work or look for work
  • Your child is under the age of 13 at the end of the tax year (no age limit if they are disabled)
  • You must be able to claim your child as a dependent
  • Your filing status must be single, head of household, qualifying widow or widower with a qualifying child, or married filing jointly

The full criteria for who’s eligible to claim the Child and Dependent Care Credit is available on the website for the IRS.

How to file for the credit

When you’re gathering documents to file 2021’s taxes in 2022, include receipts for preschool payments. “Families will need to provide proof of payment indicating the total amount paid for the year,” ” says Alvarez. “Some preschools will provide the IRS form, the W-10, to the taxpayer.” Should you have any questions, contact your child’s preschool.

If your brain is buzzing from all the info, remember that even financial pros can feel a bit overwhelmed when trying to file taxes as a parent. “As a first-time millennial parent myself, navigating this new world of child tax deductions is scary,” says Bloch. However, this year, the COVID-19 relief package has provided parents with the opportunity not only to keep child tax deduction requirements, but make them even broader. If you’re still in a jam wondering if preschool tax is deductible for you, contact a tax pro in your area.


Paul Sundin, a CPA and tax strategist at Emparion

Rafael Alvarez, founder and CEO of ATAX

Michael Bloch, the founder of Pillar Life (now Acorns) and a partner at Quiet Capital

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