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Dependent Care Deduction - SNAP (Food Stamps)

In the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamp Program), households may deduct the actual amount paid out-of-pocket for the care of each dependent child or incapacitated/dependent adult living in the home.

NOTE: On June 18, 2008, Congress enacted Public Law 110-246, The Food, Conservation and Energy Act of 2008 (FCEA). Section 4100 includes a provision that renames the Food Stamp Program the "Supplemental Nutrition Assistance Program" or SNAP and renames the Food Stamp Act of 1977 the Food and Nutrition Act of 2008, effective October 1, 2008. State agencies may continue to use state-specific program names.

Additionally, Section 4103 contains a provision that eliminates the cap on the deduction for dependent care expenses (previously $175 or $200 per month, depending on the dependent's age) and allows families eligible for the deduction to deduct the entire amount of dependent care expenses when calculating eligibility and benefit levels. This provision takes effect on October 1, 2008.

Before October 1, 2008, dependent care costs were deductible up to the following maximums:

·        $200 per dependent child if the dependent child was under age two; or

·        $175 per dependent child or incapacitated/dependent adult if the dependent was age two or older.

NOTE: This deduction will be calculated by WorkWORLD for you based on the information you provide. When responding to the WorkWORLD question, enter the entire amount of this expense before any deduction in order to have WorkWORLD correctly calculate your actual expenses.

Expenses must be paid directly by the household and are not deductible if paid in goods or services (i.e., payment-in-kind). Also, dependent care expenses cannot be reimbursed by a third party or paid on behalf of the household by a third party.

In addition, the dependent care may not be paid to a member of the group and must be necessary for a household member to do one of the following:

·        To accept or continue employment;

·        To comply with employment and training requirements; or

·        To attend training or pursue education which will help the individual prepare for employment (provided these expenses are not otherwise covered by an educational benefit or program).

The Dependent Care Deduction is used to calculate your household's net income, and in fact, it reduces your household's net income. By reducing the amount of net income that is counted when determining whether a household meets the net income test or when calculating the level of benefits for a household, the Dependent Care Deduction allows households to have higher incomes and still qualify for benefits. In addition, it helps a household to receive higher benefits.

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