How to cut child day care costs
Those who don't have employer-sponsored child care flex can take advantage of the child care tax credit. According to the IRS, parents with dependent children ages 12 years or younger can receive a 20 percent to 35 percent credit on $3,000 spent on care for one child, or $6,000 for two or more children. Depending on the parents' income level -- those earning under $15,000 per year receive the full 35 percent credit, while those earning $43,000 per year or more only get 20 percent -- the credit is only available to parents who are full-time students, workers or looking for work. Payments must be directed to a child care provider who is not a dependent, so baby-sitting by older siblings won't count. Unfortunately the government won't allow parents to use the child care flex and the tax credit together. Parents will have to crunch the numbers to figure out which is better, but generally those earning higher incomes will benefit more from flex spending, whereas those with lower incomes will benefit most from the credit.