Can You Claim Preschool Tuition on Your Taxes?

A couple working on finances at home.
Image Credit: Andrey Popov/iStock/Getty Images

You can't claim preschool tuition as a tax deduction, but the Internal Revenue Service does you one better. Some families can claim a tax credit instead. A deduction only decreases the amount of income you must pay taxes on. A credit comes directly off your tax bill, so it's a better deal.

The Child and Dependent Care Credit

Preschool tuition counts toward the Child and Dependent Care Tax Credit. You must have earned income to qualify, and you must show your child has to attend so you can work or look for work. If you're married and only one parent works, you may still qualify if the other is a full-time student or is physically or mentally incapable of caring for the child.

How Much You Get

The amount of the credit is based on adjusted gross income. As of 2014, if your AGI is $15,000 or less, you can claim 35 percent of what you pay in preschool tuition up to $3,000 for one child. If two of your children attend, you can claim a percentage of up to $6,000 in tuition costs. The percentage drops gradually with the more you earn, dropping to 20 percent if your income is $43,000 a year or more. The exact figures can be worked out on tax form 2441, which must be filed with your return.

references