Is Daycare / Child Care Tax Deductible for Your Business?

No, daycare / child care is generally not tax deductible as a business expense. The IRS considers this a personal expense, even if it has some connection to your work activities. However, there may be limited exceptions in specific circumstances.

Key Rules for Deducting Daycare / Child Care

Daycare is NOT a business deduction. However, you may qualify for the Child and Dependent Care Tax Credit on your personal return (up to $3,000 for one child, $6,000 for two or more).

How to Document Daycare / Child Care for Tax Purposes

Proper documentation is critical for any business deduction. For daycare / child care, you should:

• Keep all receipts and invoices showing the amount paid
• Record the date of the expense and the business purpose
• If mixed-use, maintain a log showing business vs. personal usage
• Store records for at least 3 years (7 years for major purchases)

Source: IRS Publication 503. This information is for educational purposes only. Consult a qualified tax professional for advice specific to your situation.