1.5.2 Childcare Expense Deduction
1.5.2 Childcare Expense Deduction aetrahan Fri, 12/16/2022 - 11:48Childcare expenses may be deducted from a tenant’s annual income if the childcare is needed so that a member of the household can work. Even if there are other members of the household available to watch the child, this deduction can still be taken. Receipts or other documentation from the childcare provider may be requested. Check your local PHA’s administrative plan any documentation requirements.
For example, suppose that Mary is a public housing tenant making $800 per month at her minimum wage job. She lives in a unit where she does not pay for any of her own utilities. She has two children ages 3 and 6. She pays childcare expenses of $75 per week.
Rent computed without the childcare expense deduction:
| Annual Income: | $800 x 12 = | $9,600 |
| Minor Deductions: | $480 x 2 = | $960 |
| Adjusted Income: | $9,600 - $960 = | $8,640 |
| Adjusted Monthly Income (AMI): | $8,640 / 12 = | $720 |
| Rent at 30% of AMI: | $720 x .30 = | $216 |
Rent computed with the childcare expense deduction saves Mary $97 per month:
| Annual Income: | $800 x 12 = | $9,600 |
| Minor Deductions: | $480 x 2 = | $960 |
| Childcare Deductions: | $75 x 52 = | $3,900 |
| Adjusted Income: | $9,600 - $960 - $3,900 = | $4,740 |
| Adjusted Monthly Income (AMI): | $4,740 / 12 = | $395 |
| Rent at 30% of AMI: | $395 x .30 = | $119 |