Child Care: Options and Difficulties in our Everchanging World
Finding and securing the right childcare for your family is always a big decision. However, the unique challenges of COVID-19 may have upended your childcare situation all together. In some situations, those with young toddlers may now be looking for childcare for the first time! Although individual situations and circumstances will differ, today we are going to help you lay out all the options and recent tax incentives that may make the decision a little easier to understand.
Child Care Centers:
Typically referred to as a daycare, the center is a state-licensed facility that is often designed for infants, toddlers and preschoolers. Children are typically separated by age and do not interact with children outside their age group (especially right now!). Child care centers typically have normal work day hours, so they work best for families who also work a traditional work day. Substitute childcare workers are brought in, so you won’t need to worry about finding alternative care if a member of the staff is ill. Daycare is a great option where many children thrive interacting with one another, but there may be less one-on-one attention throughout the day.
An in-home day care is run in an individual’s home. Children of a range of ages may come to the home every day to stay with a provider and possibly assistants. Siblings may be able to stay together throughout the day and have a home-like environment. However, oversight may not be as stringent in an in-home setting. Depending on the relationship with the provider, you may be able to work out a flexible schedule that works better with your work week.
Relative or Neighbor Care:
Depending if you live near family, you may be able to rely on grandparents or siblings to watch your children during the day. You may have extreme comfort knowing family or a close neighbor is supervising your child with your same values. However, mixing “business” and family can be tough, so do keep a line of communication open if you choose this kind of care.
A nanny is a caregiver who comes to your home each day and watches all of the children. Having a nanny can be great for one-on-one attention, taking care of your home, pet, other household tasks you may not have the time to tackle, etc. An au pair is a live-in nanny that you host from another country. Both nannies and au pairs can be found through agencies online. However, be aware that the cost can be steeper than the other child care options, and you are relying on one person. A broken car or unexpected illness can cause issues finding backup or requiring you to take time off.
Of course, you may find that a combination of some of these ideas above work best for you and your family. Don’t be afraid to be creative with childcare, there are definitely times when you will need to think outside the box!
So now that you have an idea about childcare, are there any tax incentives? Yes! On March 11, 2021, President Biden signed The American Rescue Plan Act into law. This Act temporarily increases the child tax credit for the 2021 tax year. Previously $2,000, the Act has now increased to $3,000 per child and $3,600 for kids 5 years old and younger. This credit allows for advanced payments for 6 months periodically, while the rest will be claimed on your tax return. The plan for these advanced payments will run from July to December and are scheduled to be monthly. There is an income threshold that begins to phase out the payments and credits, so to check if you will be eligible, Kiplinger has provided a calculator you can access here.