Kindergarten is not mandatory in Michigan, so can I add the kindergarten tuition in figuring the Child Care Tax Credit?

Kelly Phillips Erb the Tax Girl for Forbes writes: Taxpayer asks:  Most of what I read says that kindergarten tuition cannot be used in figuring the Child Care Tax Credit. However, that said, I thought that if a person resides in a state that does not have mandatory attendance in kindergarten, the tuition can be used to figure the Child Tax Credit. Kindergarten is not mandatory in Michigan, so can I add the kindergarten tuition in figuring the Child Care Tax Credit?

Taxgirl says:

Whether kindergarten is mandatory in your state doesn’t change the answer.

Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are deductible for purposes of the child care tax credit if they otherwise qualify as child care. The IRS takes the position in Pub 503(downloads as a pdf) and in the Regs that expenses to attend private or parochial kindergarten or higher grades are not deductible.

I have a slightly different take. Since it’s clear that expenses for before- or after-school care of a child in kindergarten or a higher grade at a private school can be deductible (also in the Regs), I believe that if you can clearly carve out a child care piece associated with attending the kindergarten, that portion should be deductible. However, the IRS believes that kindergarten is always educational: rebutting this presumption would be very fact dependent (and an uphill battle). Such facts would include (but are not definitive) if, during the non-educational portion:

• Attendance is not mandatory;
• Promotional materials refer to child care;
• The facility boasts a child care license;
• Grades are not assessed; and
• During the non-educational portion, a certified teacher is not present.

Again, tread carefully. Start with the general assumption that kindergarten won’t qualify and only give it a second look if your circumstances warrant. And always check with your tax professional.