There is a deduction that is allowed if you have child and dependant care expenses, however there are specific guidelines that determine what deductions are allowed, and what is not.  However, you must be very careful when determining if you are able to claim an expense for the deduction or you could be making problems for yourself.  

If you are separated or divorced then the custodial parent is the only parent allowed to claim this deduction.  The non-custodial parent is not able to claim this deduction.  There is no form that can be signed that will allow the non-custodial parent to claim this deduction unlike the dependant exemption, which can allow a non-custodial parent to claim an exemption.  

In order for childcare expenses to be deductible, they must be associated with your pursuit to find work or with working directly.  While expenses directly related to working or attempting to find work are allowed to be deducted, expenses for volunteer work or while you are sick and not actually working are not allowed.  

If you are paying child care expenses all year long, but only work for a portion of the year then you are only able to deduct the child care expenses that occurred while you are working.  If you are not working then you are not allowed to deduct the expenses.  However, if you are not working but are trying to seek employment for a job then the expenses are deductible, but once again only for the days in which you were seeking employment.

If you have not worked all year or searched employment all year then you will only be allowed to claim the deduction on the specific days in which you were working or seeking employment.  For example, if you paid for child care expenses all year, but only searched work for 5 days and worked another 10 days of the year you will only be allowed to claim a maximum of 15 days worth of child care expenses for the deduction.  

There are also some very specific rules about who must be paid in order to claim the deduction.

 

You are typically not allowed to pay your spouse or the parent of the child if you are deducting child care expenses.  You are also forbidden to deduct expenses you paid one child to watch another child, unless the child doing the child care is over 19 years old, and is not eligible to be claimed as your dependant.  

There are also some limits for how much you are allowed to claim for the deductions.  The maximum amount you can claim for one dependant is $3,000 or $6,000 for two or more dependants.  However, this amount can be reduced if you are married and your spouse does not make the maximum amount allowed for the deduction.  For example, if your spouse only earns $3,000 in a year and you paid $4,000 in child care expenses then you are only able to claim a deduction for $3,000.  

As you can see, the rules and guidelines that are involved in the child and dependent care expenses are quite lengthy and long.  It is best to read over the exact IRS rules before attempting to claim this deduction to ensure that you meet all of the guidelines, and have all of the required information for your care giver.  With the correct documentation, this can be a huge asset to help reduce your overall tax bill and is a huge help to many families.  Nevertheless, it is always best to ensure you follow all rules and guidelines carefully when discussing tax related issues.