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MS 5450

[1]

Volume - Supplemental Nutrition Assistance Program (SNAP) MS 5450 – R. 8/1/25 – OMTL – 677 Dependent Care Deduction

Allow a deduction for care of a child or other dependent when such care is necessary for a household member to seek, accept, or to continue employment, training, or education preparatory to employment. The dependent care deduction also includes the expense of transporting the child to and from the care provider. Effective 10/1/08, there is no longer a limit on the allowable dependent care deduction.

A. Recipients may potentially be eligible for childcare assistance:

When childcare is paid by the Childcare Assistance Program (CCAP), do not allow a dependent care deduction for the expense covered by vendor payment to the provider. However, if the participant's expense exceeds the vendor payment, allow a deduction for the difference.

For those households who receive CCAP benefits and are required to pay a daily co-payment to the childcare provider, allow the co-payment as a childcare deduction.

Do not allow a deduction for services provided by a household member.

B. If dependent care expenses for the household are covered by an excluded reimbursement, including reimbursements under employment and training programs and the childcare disregard in Kentucky Transitional Assistance Program (KTAP) budget calculations when childcare is not paid by CCAP, only the portion which exceeds the excluded reimbursement is allowed as a dependent care deduction.

Example: A KTAP recipient with earnings receives $372 in monthly benefits because they incur a childcare expense of $100 per month and do not receive CCAP assistance. If their benefits were calculated NOT allowing the childcare expense, they would receive $317. The KTAP benefits have been "adjusted" in the amount of $55 due to childcare. The difference ($372- $317 = $55) of $55 is the "adjusted" or reimbursable amount of childcare. This amount is excluded income. The difference in the total childcare expense and the "adjusted" or reimbursable amount ($100 - $55 = $45) is $45. $45 is the amount of dependent care deduction allowed in the case.

C. Do not allow as a dependent care deduction any portion of the dependent care expense which is allowed as an educational assistance payment exclusion. For a complete overview of student financial eligibility, refer to MS 5650.

D. Because kindergarten attendance is mandatory in Kentucky for any child expecting to enter the first grade, do not allow kindergarten expenses as a dependent care expense. School attendance is required for any child over the age of five and under the age of 17; disallow school costs for these children. If childcare is provided for these children before or after school hours, allow that expense as a deduction.