April 21, 2024

Newparent

Veteran Baby Makers

Millions of Americans could get cash to help with child care costs

CHILD care can be costly – but an expected state proposal may give parents some relief.

New York Governor Kathy Hochul and the state legislature are reportedly hoping to boost child care funding in her first executive budget proposal due on April 1.

New York is proposing billions in funding for child care

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New York is proposing billions in funding for child care

The budget may include up to $3billion in child care funding, anonymous sources have told Zach Fink, the host of Off Topic/On Politics podcast.

He tweeted yesterday: “GovKathyHochul wants to make it available to those at 300% of poverty level, or families making $120,000 and below.

“Would also raise pay for providers. Goal is to get it running this year.”

Before anything is confirmed, New York state lawmakers and the governor would have to agree on the state budget.

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Each house of the legislature has released its own budget proposals, known as the “one-house budgets”.

Then the executive and one-house budgets form the basis for negotiations between the governor, legislative leaders and their staff.

Senator Jabari Brisport of Brooklyn, who helped craft the Senate plan, told the New York Times that she proposed they commit $2.2billion, making child care free for all low-income families.

Senator Brisport also said they would like to see an increase in the number of families who will be eligible to receive benefits each year.

The Senate plan would allow families that are earning up to five times the poverty line to qualify for subsidized care by 2024.

This would then raise the state’s commitment to child care funding to more than $4billion.

Millions of parents could be eligible for these programs as over 19% of New Yorkers live in poverty and over 41% are at risk, according to the City’s calculations.

Though Biden’s Build Back Better has dialed back its child care funding, many states and territories still have programs that help.

What are other states offering?

Many states receive funding from the federal government that provides financial assistance for low-income families.

Eligibility requirements are different for each state so be sure to check the “see your state’s resources” page for the correct qualifications and then click on the “financial assistance for families” tab to find your local child care financial assistance program.

According to a study by SmartAsset, the three states below have the best child care options.

North Dakota

North Dakota received over $100million in federal funding as part of the Congressional Covid-19 response and recovery packages.

These funds are specifically dedicated to early childhood and the child care sector.

In February, its Child Care Assistance Program also increased the qualifying level from 60% to 85% of the state median income.

Now, a North Dakota family of three with a household income of $6,193 a month is able to qualify – up from $4,372 previously.

Mississippi

Mississippi has its child care development Fund that provides financial assistance in the form of vouchers for low-income families to afford quality childcare services.

The funds are distributed through their Child Care Payment Program (CCPP).

CCPP is administered by the Division for Early Childhood Care and Development (DECCD) at the Mississippi Department of Human Services.

South Dakota

The childcare assistance is available to families who meet income guidelines and minimum work and/or school requirements.

Some families may be required to make a co-payment based on the household income and family size.

To apply, the application will ask for your provider who must be licensed or registered, a relative (grandparent, great-grandparent, aunt, uncle, or non-resident sibling), an in-home provider, or a family friend who cares only for the children of your family.

All providers must be at least 18 years old.

Other ways to get help with child care costs

Child and dependent care credit

If you pay for someone to look after your child so you could work or find a job, you may be able to apply for child and dependent care credit.

This previously let you claim expenses of up to $3,000 per year to cover the costs of someone looking after your child.

While you could claim up to $6,000 (20% to 35%) for more individuals.

Following the pandemic, you can now claim up to 50% of these expenses, maxing out at $8,000 for one kid and $16,000 for two or more dependents.

It means you can reduce your tax bill by up to $4,000 per child, or $8,000 for two or more.

This tax subsidy can be claimed when you file your taxes each year.

The deadline to file 2021 taxes is on April 18, 2022.

To help you claim, you’ll need to keep a detailed account of all child care expenses, complete Form 2441 and attach it to your return.

Expanded child tax credit

To maximize your money, make sure you’re also taking advantage of the expanded child tax credits (CTC).

These are part of the landmark $1.9trillion America Rescue Plan, which was signed into law last year.

Couples who earn less than $150,000 or an individual who earns less than $75,000 can get the maximum credit of up to $3,600 per child.

Whether you received the first half as advance payments, you’ll still need to file a tax return to claim the rest.

Earned income tax credit

Low-income workers can get an extra credit on their tax bill called the earned income tax credit (EITC).

You can currently claim up to $6,728 annually depending on how you file your return and how many children you have.

Married couples can now earn up to $27,380 a year in combined income – up from $21,710 previously and still qualify.

You will get a refund if the credit is worth more than the tax owed.

Early Head Start and Head Start

Early Head Start is for children from birth to three years old and Head Start serves children aged between three and five years old.

These programs aim to support children’s development and work with families to help support their children.

Both are federally funded programs and are in every state, territory, and many tribal communities.

Families with incomes at or below the poverty level may be eligible for Head Start services.

Special consideration is given to children who have disabilities, children in foster care, families experiencing homelessness, and families receiving certain types of public assistance.

To find out if your family is eligible, contact your nearest Head Start program.

State-funded prekindergarten

State-funded prekindergarten programs serve children between three and five years old.

They focus on early education and school readiness.

Some states offer these programs to eligible families at low or no cost, and the programs may be part-day or full-day.

Your state child care resource and referral agency can usually tell you if there is one near you.

There are almost 400 agencies across the US – find your nearest one here.

Dependent Care Accounts

Some employers have plans that allow workers to earmark a portion of their paycheck into a special fund to use for child care.

This money isn’t taxed and can only be used for child care costs.

Like the child and dependent care tax credit, families are eligible if both spouses are working or going to school and if the children are under 13.

Talk to your HR department at work to see if a dependent care account is available to you and how you can get started.

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