Save $5,000 on Childcare With This One Easy Trick

>>When my kids were born, I was working at a nonprofit making more than I ever had in my life — $36,000. My partner was making an additional $30,000. On paper, we should have been in good shape. But in my town, full-day childcare starts at $12,000 a year. You can do the math on what that added up to for my two bouncing baby boys.

Tax credits and pre-tax contributions are intended to offset onerous childcare costs. But they fall short; the maximum amount you can claim for a federal tax credit is $6,000 for two kids — just a quarter of what I was on the hook for. That $6,000 results in about a net $1,200 decrease in taxes for a family in my income range.

>>A new proposal from the Center for American Progress would increase childcare tax credits to something more realistic given the rapidly increasing costs. A CAP report shows that the average cost of childcare for an American family has grown more than $2,300 in the last decade. In some markets– such as mine– the change has been even more steep.

The proposed change would cap family’s contribution to childcare at 12% of their annual income. By leveraging tax credits, families making up to nearly $100,000 would be able to access high quality care without affecting their quality of life.

In more 31 states, preschool and daycare cost more than college tuition. North Carolina families pay, on average, $9,000 per child, per year. Although numerous studies show that universal access to pre-k improves educational outcomes across the board, in our state we don’t have enough pre-k seats for those below the poverty line, much less all 4-year-old’s.

By funding high quality care with tax credits, lawmakers would extend necessary early childhood learning to every North Carolina child. Middle income parents could save up to $5,000 a year while low income parents could save even more. But maybe just as important is the opportunity this would create for parents– specifically mothers.

When one parent stays at home with children, overwhelmingly that parent is a mom. In many circumstances this choice is borne of necessity, not preference. In my case, after taxes, commuting expenses, and childcare, my salary was nearly negated. My partner was unwilling to stay home with the children, so my hands felt tied.

In many other households, women just don’t make enough to afford childcare. The majority of low wage workers in North Carolina are women, and women of color are disproportionately represented in sub-$10 an hour jobs. Subsidizing the actual cost of childcare would give these women — and women like me — the continuity of employment they need to garner higher wages and more benefits.

Any plan that expands access to childcare is going to be good for women. But this plan is a winner because it benefits all families as well. Ensuring everyone who wants to work, can work should be a basic human right. And allowing every child to learn to read, stand in a line, and access school services at the pre-k level is an equalizer we know we need to be a fair and equitable society.

>>Jen is the Editorial Director of Women AdvaNCe, and is a freelance writer living in Chapel Hill, NC.