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Kindergarten Cop: IRS Halts Child Care Credit

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in Small Business Tax

Q. We will be paying for our 5-year-old to attend a private kindergarten. Can we claim the child care credit for this cost? D.R., Rye, N.Y.

A. No. Under its recent rule proposal, (RR, 7/10/06) the IRS says the cost of kindergarten tuition doesn’t qualify for the dependent care credit (commonly called the child care credit). Reason: The expense is in the nature of schooling, not child care. But the cost of preschool programs will continue to qualify, including any expenses attributable to incidental meals. Tip: For joint filers to qualify for the credit, both spouses must be gainfully employed.

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