Federal Aid For Child Care
Lower-income families are caught in a situation that seemingly has no good solution. On the one hand, usually both parents (or the only parent, in a single-parent household) must work and earn an income. On the other hand, many families have children who are too young to remain at home by themselves while their parent is working.
Yet the cost of decent childcare is so high that it can often completely negate the income that the parent earns, especially if more than one child must be in paid care. For a parent working 40 hours a week at minimum wage, the cost of placing two young children in daycare can completely wipe out the parent's entire paycheck. In this case, the parent might be financially better off by not working and collecting welfare.
Fortunately, there are some programs that can help with the expense of childcare while a parent works. In fact, the federal government provides more than $5 billion (yes, billion) dollars every year to states and tribal agencies to be used to support families who need child care services so they can go to work or attend classes. Following are some programs you can look to for help. Also, if you are a single mom, you should check out this article specifically about assistance for single moms.
Flexible Spending Accounts
Some federal aid for child care comes is available indirectly through Flexible Spending Accounts offered by employers. If you are lucky enough to have one available at work you should take advantage of it. These accounts let you set aside pre-tax money from your paycheck for childcare expenses. Though you might hesitate to have any more money taken out of your paycheck, you will save money because you do not pay income taxes on the money that was set aside. So if you're in the 15% tax bracket, you are saving 15% on your childcare expenses. And that savings is actually additional income to you.
State-Sponsored Subsidies
These are programs made available by the $5 billion+ we mentioned above, that comes from the federal government. Contact the Child Care Development Fund agency in your state to see what your state offers for low-income family childcare expenses. There will be applications to fill out but if you qualify, you can get cash assistance to help out while you are working or going to school. You can also get help finding child care, including not only full day care but also after school programs. You can call 1-800-424-2246 for information on an agency in your area.
Head Start
If your child is younger than school age (birth to 5 years old), you can apply to Head Start to get your child enrolled in a free preschool program. Head Start is administered by the U.S. Department of Health & Human Services and provides early childhood education for low-income families, so that their children do not find themselves falling behind their higher-income peers in the educational system. The fact that low-income are cared for as well as educated through this program is a bonus for cash-strapped families.
Income Tax Credits
This is another option that comes indirectly from the federal government through reducing the amount of income taxes you have to pay. You may be able to deduct daycare expenses on income tax returns. Low-income working parents with children may also qualify for the Earned Income Tax Credit, which can provide much-needed financial relief. Don't underestimate how powerful these credits can be! You should be aware that you can get FREE TAX HELP. We recommend you do that so you can take advantage of these tax reduction strategies which do add up.
Local and Federally Sponsored Facilities
There may be daycare facilities in your area that are run by non-profit organizations and subsidized by local, state or federal funds. The government is aware of the extraordinary burden of childcare for low-income families, and tends to help out organizations that are offering assistance to these families. These facilities may offer low-cost care to families who qualify. Locate them by talking to a local community services agency, by doing a simple internet search for your town or county, or even by calling a local church for referrals. Also check out the Government Programs section of Grants for Healthy Kids to learn more about awards for child care facilities available from the Department of Agriculture.
Child Care Aware
Child Care Aware is an organization that works with federal, state and local governments to help parents locate and fund their childcare needs. The organization connects parents with facilities and programs that can assist in financing high-quality, affordable childcare for all families. It is recommended by the U.S. Department of Health and Human Services as a trusted childcare resource. Child Care Aware works with outfits in 99% of the populated areas of the U.S., so it is very likely that they will be able to help you even if you live in a pretty remote area.
Conclusion
Childcare is an expensive and unfortunately necessary burden in many households. It can be nearly unaffordable in low-income families, leaving parents to make difficult and potentially dangerous choices. Government programs offering subsidies and tax credits can make the situation much more reasonable for struggling parents. In addition to the resources listed in this page, you should also take time to read through the section about Grants for Kids Individuals Can Win on our home page.
Lower-income families are caught in a situation that seemingly has no good solution. On the one hand, usually both parents (or the only parent, in a single-parent household) must work and earn an income. On the other hand, many families have children who are too young to remain at home by themselves while their parent is working.
Yet the cost of decent childcare is so high that it can often completely negate the income that the parent earns, especially if more than one child must be in paid care. For a parent working 40 hours a week at minimum wage, the cost of placing two young children in daycare can completely wipe out the parent's entire paycheck. In this case, the parent might be financially better off by not working and collecting welfare.
Fortunately, there are some programs that can help with the expense of childcare while a parent works. In fact, the federal government provides more than $5 billion (yes, billion) dollars every year to states and tribal agencies to be used to support families who need child care services so they can go to work or attend classes. Following are some programs you can look to for help. Also, if you are a single mom, you should check out this article specifically about assistance for single moms.
Flexible Spending Accounts
Some federal aid for child care comes is available indirectly through Flexible Spending Accounts offered by employers. If you are lucky enough to have one available at work you should take advantage of it. These accounts let you set aside pre-tax money from your paycheck for childcare expenses. Though you might hesitate to have any more money taken out of your paycheck, you will save money because you do not pay income taxes on the money that was set aside. So if you're in the 15% tax bracket, you are saving 15% on your childcare expenses. And that savings is actually additional income to you.
State-Sponsored Subsidies
These are programs made available by the $5 billion+ we mentioned above, that comes from the federal government. Contact the Child Care Development Fund agency in your state to see what your state offers for low-income family childcare expenses. There will be applications to fill out but if you qualify, you can get cash assistance to help out while you are working or going to school. You can also get help finding child care, including not only full day care but also after school programs. You can call 1-800-424-2246 for information on an agency in your area.
Head Start
If your child is younger than school age (birth to 5 years old), you can apply to Head Start to get your child enrolled in a free preschool program. Head Start is administered by the U.S. Department of Health & Human Services and provides early childhood education for low-income families, so that their children do not find themselves falling behind their higher-income peers in the educational system. The fact that low-income are cared for as well as educated through this program is a bonus for cash-strapped families.
Income Tax Credits
This is another option that comes indirectly from the federal government through reducing the amount of income taxes you have to pay. You may be able to deduct daycare expenses on income tax returns. Low-income working parents with children may also qualify for the Earned Income Tax Credit, which can provide much-needed financial relief. Don't underestimate how powerful these credits can be! You should be aware that you can get FREE TAX HELP. We recommend you do that so you can take advantage of these tax reduction strategies which do add up.
Local and Federally Sponsored Facilities
There may be daycare facilities in your area that are run by non-profit organizations and subsidized by local, state or federal funds. The government is aware of the extraordinary burden of childcare for low-income families, and tends to help out organizations that are offering assistance to these families. These facilities may offer low-cost care to families who qualify. Locate them by talking to a local community services agency, by doing a simple internet search for your town or county, or even by calling a local church for referrals. Also check out the Government Programs section of Grants for Healthy Kids to learn more about awards for child care facilities available from the Department of Agriculture.
Child Care Aware
Child Care Aware is an organization that works with federal, state and local governments to help parents locate and fund their childcare needs. The organization connects parents with facilities and programs that can assist in financing high-quality, affordable childcare for all families. It is recommended by the U.S. Department of Health and Human Services as a trusted childcare resource. Child Care Aware works with outfits in 99% of the populated areas of the U.S., so it is very likely that they will be able to help you even if you live in a pretty remote area.
Conclusion
Childcare is an expensive and unfortunately necessary burden in many households. It can be nearly unaffordable in low-income families, leaving parents to make difficult and potentially dangerous choices. Government programs offering subsidies and tax credits can make the situation much more reasonable for struggling parents. In addition to the resources listed in this page, you should also take time to read through the section about Grants for Kids Individuals Can Win on our home page.