63-233†††† Dependent Care Deduction

 

Table of Contents

 

Section

Definition of Dependent Care Deduction

233.1

Allowable Dependent Care Deduction

233.2

Dependent Care Paid for and/or by an Ineligible Noncitizen

233.3

Prospective Budgeting of Dependent Care Costs

233.4

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63-233.1
Definition of Dependent Care Deduction

The dependent care deduction is the actual amount paid for the care of a child or other dependent in the household.

Refer to 63-117.19 for dependent care verification requirements.

 

63-233.2

Allowable Dependent Care Deduction

The dependent care cost will be allowed as a deduction when necessary for a household member to:

         Accept or continue employment; or

         Attend training or pursue education to prepare for employment; or

         Comply with CalFresh Employment and Training Program requirements or an equivalent effort to seek employment by those not subject to CalFresh Employment and Training.

A dependent care cost is only deductible when:

         Care is provided by someone outside of the household, and

         The household makes an out-of-pocket payment for the service.

Do not allow a dependent care deduction when:

         The service is provided by another household member; or

         Care is paid for by in-kind benefit such as housing.

The dependent care deduction shall not include any amount that is covered by a subsidy.

Example:

Situation

A family of four consisting of mother and three children ages 11, 9, and 4.

The mother is attending a vocational training school to become a medical assistant and takes her four year old child to a licensed daycare center.

The total child care cost is $1,200 a month, but she receives a $1,000 subsidy.

Outcome

The actual child care cost for the dependent child is the difference between the reimbursement rate and the total child care cost:

$1,200 - $1,000 = $200.

The deductible dependent care cost is $200.

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63-233.3

Dependent Care Paid for and/or by an Ineligible Noncitizen

When an ineligible noncitizen has income and shares or pays the dependent care expense, the worker will prorate the dependent care evenly among all members and only the eligible memberís share is counted as the deduction. Refer to 63-238.4.

 

63-233.4
Prospective Budgeting of Dependent Care Costs

A. Billed Expenses

A deduction will be allowed only in the month the out-of-pocket expense is billed or otherwise becomes due, regardless of when the household intends to pay the expense.For example a dependent care expense that is due should be allowed as a deduction even if the household has not yet paid the expense.However, amounts carried forward from past billing periods are not deductible, even if included with the most recent billing and actually paid by the household.

An expense may only be deducted once.

B. Anticipating Expenses

The worker will calculate a dependent care cost based on the expenses the household expects to be billed for during the certification period. Anticipation of the expense will be based on the most recent monthís bills, unless the household is reasonably certain a change will occur.

         The worker will not average past out-of-pocket dependent care payments for the last several months as a method of anticipating dependent care costs for the certification period.Anticipation of the dependent care cost will be based on the most recent monthís out-of-pocket expenses, unless the household is reasonably certain that a change will occur.

         If the household just started receiving dependent care services from the provider and has not yet paid for dependent care, the worker will calculate the householdís expenses based on the out-of-pocket payments the household expects to pay during the certification period.

C. Fluctuating Expenses

When the household has dependent care expenses that vary from month to month or are billed less often than monthly, the household can elect to have the expenses averaged prospectively over the interval between scheduled billings.

If there is no scheduled interval, households can elect to have expenses which are billed less frequently than monthly averaged over the period the expense is intended to cover or over the remaining months of the certification period.

NOTE: Expenses paid on a weekly or bi-weekly basis will be converted to a monthly deductible expense by multiplying the weekly expense by 4.33 or bi-weekly expense by 2.167 (refer to 63-282.7, 8). The worker will document the methodology of the determination in case comments.

Refer to 63-117.19 and 63-282.13.