Tax Break for Child and Dependent Care Costs

  • Description
  • Funding History
  • Proposals

The Tax Break for Child and Dependent Care Costs (officially known as the "Deduction for Business-Related Child Care Expenses") is a tax break provided by the Commonwealth to taxpayers who must pay for childcare or dependent care in order to work.

This deduction is allowed for amounts paid to care for a child under age 13 or a disabled dependent or spouse so that a taxpayer may work or look for work. Eligible taxpayers may claim up to $4,800 in expenses for one child (or other qualifying dependent) and up to $9,600 for two or more children (or other qualifying dependents). These expenses are deducted from the taxpayer's taxable income, reducing the amount of state income tax owed by the taxpayer to the Commonwealth.

The amount of expenses claimed for this deduction must be reduced by the value of any daycare services the taxpayer has received through his or her employer under the Tax Break for Daycare Expenses (Tax Expenditure Item 1.011). Married taxpayers who choose to file separately may not claim this deduction.The Department of Revenue estimates that the total cost to the Commonwealth of providing this tax break is about $20 million annually.

Updated August 2016

Are you an expert in this area? Do you know someone who is? Let us know so that together we can make this the most up-to-date, useful resource on children's programs in Massachusetts.