603.05 Child/Dependent Care Deduction (FAM)
Deduct the actual verified unreimbursed cost of care for a dependent child or incapacitated parent only:
• from earnings; and
• for the period of child care which occurs:
- during hours of employment; and
- for the time to go to and from the child care location.
To receive the deduction, the child or incapacitated parent must:
• live in the employed person’s home;
• be applying for financial *assistance under one of the Department’s programs; or
• be in the same or related FANF financial *assistance case.
Do not exceed the maximum allowable deduction limits. Unreimbursed costs are total costs minus any reimbursements made by non-assistance group members. See the entry for Training Expenses in Section 603.09, Other Allowable Deductions, for child care costs incurred as a result of training or education.
Exception: Do not allow the child/dependent care deduction for individuals whose employment-related expenses have been suspended.
The child/dependent care deduction maximums are:
• for a full-time employee (individual earning > $377 or more per month):
- $200 per month for each child less than 2 years old; and
- $175 per month for each incapacitated parent and for each child age 2 years or over.
• for a part-time employee (individual earning less than $377 per month):
- $100 per month for each child less than 2 years old; and
- $87.50 per month for each incapacitated parent and for each child age 2 years or older.
For an individual to receive the child care deduction, the provider must meet all of the following:
• meet the licensing requirements under state law and the Division of Public Health Services rules;
• cannot be the parent or legal guardian of the individual receiving the care; and
• cannot be a member of the same FANF assistance group.
Determine if FANF recipients who claim child care costs would be eligible for Department of Health and Human Services’ (DHHS) child care reimbursement payments. If they are potentially eligible, ask if they would prefer DHHS reimbursement or the child care disregard. If they choose the reimbursement method, allow only costs above the reimbursement amount as a deduction.