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Fiscal Cliff: How it could affect child care deductions

6:46 PM, Dec 10, 2012   |    comments
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With each passing day, families are becoming increasingly concerned about the "fiscal cliff" and how this will affect their monthly budget, especially when it comes to child care.

Working parents barely breaking even to pay for childcare might find the fiscal cliff to be the tipping point.

Not only is the child tax credit in danger of going away, costing families and average $1,000 thousand per child but the Child and Dependent Care Credit could shrink, according to some analysts.

Expanded Coverage: Fiscal Cliff

It currently covers 35 percent of eligible expenses up to $3,000 for one child or dependent. But after the first of the year, that could drop to $2,400 per child.

"To me, that is so sad because to me this is sort of basic. You need that child care for you to go to work, for you to earn the money to pay your taxes," says Sheilagh Roth, with the English Nanny & Governess School in Chagrin Falls.

Roth says the daycare industry will take a hit, but it's parents who will suffer most with a shrinking budget.

"I was counting on that money, I don't have it now I'm going to have to move my children to somewhere that is not quite the standard that I want."

WKYC-TV

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