How Much Do You Get Back For Childcare On Taxes

How Much Do You Get Back For Childcare On Taxes – Child care is so expensive that educated women are dropping out of the workforce because they refuse to allocate more than 25% of their salary to costs

How much of your salary does it take to break even for being a stay-at-home parent?

How Much Do You Get Back For Childcare On Taxes

It was supposed to be a fun holiday activity: taking his kids for a ride on the local Polar Express train. Instead, Jennifer Parks’ excitement subsided slightly as she passed not one, not two, but three pharmaceutical plants in her area that she knew were hiring.

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With a degree in microbiology, Parks worked in the pharmaceutical industry until the birth of her eldest son seven years ago. And she loved it. But now that she’s a mother of three — her youngest is just 21 months old — Parks is a reluctant stay-at-home mom who has no real idea when, or if, she’ll be able to re-enter the workforce.

“I’m right around the corner, why don’t I work?” Parks remembers watching her as she walked past businesses late last year. “I liked working. I loved my job. I have never felt such a sense of self-worth and pride as I did when I was working,” Parks says

. “I love my kids too, but I’m so tired of them crying over the oatmeal they asked for.”

The biggest reason this well-qualified woman isn’t in the workforce? Parks can’t find affordable childcare coverage. “When we started doing the math, there was virtually no way to really cut child care that cost less than $100,000.” And realistically, Parks doesn’t think he can ask for a salary that high.

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Since her husband’s job as an investment banker covers the family’s considerable living expenses in Maplewood, N.J., Parks says that to take a job outside the home, she would need to earn enough to pay for part-time child care full. “I have to cover the costs,” she says. “My ideal goal would be enough to pay for childcare and maximize my retirement, and I feel like it’s also like: Why don’t I want a pony too?

“I enjoyed working and would like to have a professional life again, but the costs, logistics, and high probability of having to be in person [working] at rather set times make it all seem unrealistic,” Parks says.

Like Parks, millions of Americans, especially women, are struggling with the financial breaking point of child care. In January, about 4.5 million Americans remained unemployed because they were caring for children who were not in school or day care.

“It’s not like I’m looking for fancy shows or anything like that,” Parks says. “Or stay home and wait for all my children to go to school, which, given the number of half days, vacation days and summer camps, still involves considerable cost and inconvenience. Or go back to work, making no profit, and continue to juggle deliveries, pickups, and probably the need to work after putting all three kids to bed.

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According to a nationally representative survey of 2,091 U.S. adults by the Harris Poll, nearly nine in ten Americans believe more parents would continue to work if more affordable child care was available.

But how much are most Americans willing to pay? What percentage of their salary are most parents willing to allocate to childcare costs before considering leaving the workforce?

Not much, survey results show. If child care costs consumed a quarter of their paychecks, nearly half of parents with young children under age 5 would consider becoming a stay-at-home parent.

Parks is actually an anomaly in her willingness to spend nearly 100% of her salary on child care in order to work. Fewer than one in five parents (16%) with young children would be willing to spend even more than 75% of their salary on childcare, Harris found.

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On average, according to a recent analysis of U.S. spending data Census Bureau, U.S. families spend an average of 17.8% of their income on child care. But this is an average and varies quite dramatically depending on where families live. Nevada parents, for example, spend about 28% of their income on child care, the highest percentage nationally. That’s not surprising considering 72% of Nevada residents lived in a pre-pandemic desert with child care.

There is a generation gap when it comes to spending on child care in order to maintain your career. Younger Americans – those who are part of the Gen Z and millennial generations – are much more likely to believe it is reasonable to spend much more on child care than older generations.

When asked what they considered a reasonable dollar amount for child care, Americans responded that an average of $617 a month was fair game, according to Harris. Once again, younger workers were more willing than older Americans to pay more for child care. And fathers were willing to spend about $100 more per month than mothers ($668 versus $568), echoing research published last year that found, in general, men are more willing to pay for domestic help compared to women.

Of course, even at $617 a month, it’s far below what the average American family pays. According to the most recent data available from Child Care Aware of America, in 2021 the national average price of child care was about $10,600 per year, or about $883 per month.

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The Department of Labor’s Woman’s Bureau recently estimated child care costs to be between $5,357 and $17,171 per year. But that range is based on 2018 data adjusted for inflation to 2022 dollars. So while it takes into account the effect of rising consumer prices overall, it doesn’t address the substantial industry changes experienced since the start of the COVID-19 pandemic, meaning it’s likely a low range.

The financial burden of child care isn’t just relegated to the “big number” of what the tuition fee is, says Molly Weston Williamson, a senior fellow at the Center for American Progress. There are myriad related costs that go hand in hand with child care: from babysitting expenses to additional costs related to school and summer vacation days to time off needed when a child inevitably gets sick.

“Are you able to get care that meets the time, structure and location of your work needs at a price that you can fit within your budget, even for a short time? That’s the first and most important element,” Williamson says

But even among parents who are able to secure child care that meets their needs, gaps still exist – school closures and children’s sick days – that will require additional coverage and funding.

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While finances are not the only reason why parents, particularly women, drop out of the workforce, they are an important factor. According to the recent Harris Poll, more than a third of stay-at-home parents said they left work to care for their children because of financial difficulties affording child care (19%) or limited availability of child care services. childhood (17%). Among former and current stay-at-home parents, 36% say they have felt forced to leave the workforce to care for their children.

Additionally, researchers analyzing recent DOL data on child care found that a 10% increase in average child care prices was associated with county-level maternal employment rates that were 1 percentage point lower .

With parents facing greater shortages of availability and rising prices (child care costs have increased 25% in the last decade alone), not to mention stricter healthcare policies from providers and outbreaks of COVID, RSV, and regular seasonal illnesses that equate to more sick days, it’s not a solution It amazes me that many parents are considering putting their careers on hold.

Even for parents who can find and afford child care, the current environment still presents a challenge, Williamson says. Many working parents have been forced to keep their sick children at home and still pay for child care they were unable to access.

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Since the pandemic, women’s jobs have been disproportionately affected. According to analysis by the National Women’s Law Center, as of February 2020, women represent 100% of the net exit workforce. There were 217,000 fewer women in the workforce in January 2023 than in February 2020.

And the current child care crisis may get worse before it gets better. During the pandemic, Congress has allocated more than $50 billion in funding to help the child care industry. These typically were transferred to individual day care centers, in-home providers, and child care centers in the form of stabilization grants that reportedly helped about 200,000 providers stay open. But this temporary support is set to disappear by the end of the year, which could trigger another round of permanent childcare center closures.

Staying home and caring for children may help American parents overcome the short-term costs of raising children, but there is still a price to pay. According to the Harris survey, more than half (52%) of stay-at-home parents with children under the age of 5 believe their careers have been negatively affected by this choice. And 68% of both men and women believe that mothers are penalized more in the workforce after staying at home to care for their children.

That career blow lingers. About half (51%) believe that stay-at-home parents rarely recover professionally, even after returning to the workplace. And ultimately, eight in ten Americans believe that keeping both parents in the workforce ensures a more stable financial future for families, Harris finds.

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“When women leave the world of work – or are even excluded from the world of work – because they don’t have the healthcare support they need, it’s not just a matter of

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