Does Pre-K Registration Count Toward Tax Deductions?

Tom Streissguth, Demand Media writes:   Tax laws offer some valuable deductions for education, as well as a credit for child-care expenses. The IRS puts some conditions on the latter, while requires any deduction for education expenses to be for post-secondary schools. You may be able to claim pre-K tuition and fees for the child-care credit.

Child-Care Credit

The IRS does not allow you to deduct pre-K fees, but provides an alternative with the credit for child-care and dependent-care expenses. If you paid for child care for someone 12 years old or younger to work or to look for work, then you may claim part of the cost as a credit. If you are married filing a joint return, then both you and your spouse must be working or looking for work. The IRS will accept a pre-K program, either public or private, that charges a fee as a qualified child care provider.

Conditions and Limits

There are some important conditions on the child-care credit. You may not claim it for payments to your spouse or to the other parent, or if you are filing as "married, separate." You must identify who received your payment. In addition, the IRS limits the credit to a percentage of your expenses, from 20 to 35 percent depending on your adjusted gross income. The dollar limit is $3,000 paid for one child or $6,000 paid for two or more; you may not claim expenses that exceed your earned income. You must reduce the expenses by any amount you received from an employee benefit plan used for child care.

Identifying Providers

You claim the credit by filing Form 2441 along with your 1040 or 1040A ( you can't claim the credit with a 1040EZ). You must identify the school, church, day-care facility, YMCA or wherever your child is enrolled. The IRS requires the name, address and taxpayer identification number, which in the case of a school or church would be the employer identification number. If the organization is tax exempt, you simply enter "tax exempt" in the space calling for a taxpayer identification number.

Educational Expense Deduction

The deduction for educational expenses, which you list along with other itemized deductions on Schedule A of Form 1040, applies only to post-secondary tuition and fees. Fees you paid for a college, junior college, university, or vocational or technical school would qualify, as long as you (or the student/dependent) attended classes at least half-time. Pre-K tuition or fees would not qualify for the deduction, nor can you claim tuition or fees paid for kindergarten, elementary or secondary education for the child care credit.