Can A Noncustodial Parent Deduct Daycare Costs?

The Child and Dependent Care Credit (CDCC) is a tax credit for parents or caregivers to help cover the cost of qualified care expenses for a child under 13. It allows them to claim up to 20-35% of care expenses, up to a maximum of $2,000 per child. However, only the custodial parent can claim the credit, even if the child is being claimed as a dependent by the noncustodial parent under divorced or separated rules.

For tax year 2023, the maximum amount of care expenses allowed to claim is $3,000 for one person, or $6,000 for two or more people. Noncustodial parents often have a misperception that they can claim a child as a dependent merely by paying child support. However, this is irrelevant for the release of claim.

The Dependent Care Credit is a tax credit available to non-custodial parents that can help cover up to 20-35 of care expenses, up to a maximum of $2,000 per child. If the noncustodial parent qualifies, they can claim the child as a dependent and the child tax credit for the child (up to $2,000).

An exception applies for children of divorced or separated parents. The IRS allows a noncustodial parent to claim the child as a dependent if the custodial parent has signed Form 8332. The CCC is a tax credit for parents or caregivers to help cover the cost of qualified care expenses for a child under 13, a spouse, or parent unable to pay child support.