Dependent Care Deduction

Refer to Section 4.407.6 if the attendant care is for a household member who is age sixty (60) or older or who receives SSI or Social Security disability payments. The attendant costs, including meals provided, shall be considered as a medical expense. A. Dependent care expenses, as billed to a household member or as paid by or billed to a person disqualified for being an ineligible non-citizen or failure to provide or apply for a SSN, for the care of a child or dependent with disabilities shall be considered when the dependent care expenses are necessary for a household member to accept or continue employment, seek employment, or attend training or pursue education which is preparatory to employment. Dependent care expenses that are paid by or billed to the disqualified person shall be divided equally among all household members and the disqualified person. All except the disqualified member's pro rata share is considered for a deduction. The dependent care deduction that is paid by or billed to individuals disqualified for intentional Program violation/fraud will be allowed in its entirety. Allowable dependent care costs include: 1. The cost of care given by an individual care provider or care facility; 2. Transportation costs to and from the care facility. Mileage expenses must be calculated based on the prevailing Internal Revenue Service (IRS) business rate published annually at https://www.irs.gov/tax-professionals/standard-mileage-rates; and 3. Activity or other fees associated with the care provided to the dependent that are necessary for the household to participate in the care. B. The total dollar amount that the household is responsible to pay for dependent care expenses is deductible. C. Only direct monetary payments to an agency or a person outside of the household will be allowable. The value of in-kind benefits paid to an attendant, such as meals, is not considered for a dependent care deduction. D. A child care expense which is reimbursed or paid for by the JOBS program under Title IV-F of the Social Security Act or the Transitional Child Care (TCC) program shall not be a deductible expense.