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. Administrative Plan 4/1/16 <br />. <br />Page 6-33 <br />Earned Income Limit on Child Care Expense Deduction <br />When a family member looks for work or furthers his or her education, there is no cap on the <br />amount that may be deducted for child care – although the care must still be necessary and <br />reasonable. However, when child care enables a family member to work, the deduction is capped <br />by “the amount of employment income that is included in annual income” [24 CFR 5.603(b)]. <br />The earned income used for this purpose is the amount of earned income verified after any <br />earned income disallowances or income exclusions are applied. <br />When the person who is enabled to work is a person with disabilities who receives the earned <br />income disallowance (EID) or a full-time student whose earned income above $480 is excluded, <br />child care costs related to enabling a family member to work may not exceed the portion of the <br />person’s earned income that actually is included in annual income. For example, if a family <br />member who qualifies for the EID makes $15,000 but because of the EID only $5,000 is <br />included in annual income, child care expenses are limited to $5,000. <br />SAHA must not limit the deduction to the least expensive type of child care. If the care allows <br />the family to pursue more than one eligible activity, including work, the cap is calculated in <br />proportion to the amount of time spent working [HCV GB, p. 5-30]. <br />SAHA Policy <br />When the child care expense being claimed is to enable a family member to work, only <br />one family member’s income will be considered for a given period of time. When more <br />than one family member works during a given period, SAHA generally will limit <br />allowable child care expenses to the earned income of the lowest-paid member. The <br />family may provide information that supports a request to designate another family <br />member as the person enabled to work. <br />Eligible Child Care Expenses <br />The type of care to be provided is determined by the assisted family. SAHA may not refuse to <br />give a family the child care expense deduction because there is an adult family member in the <br />household that may be available to provide child care [VG, p. 26]. <br />Allowable Child Care Activities <br />SAHA Policy <br />For school-age children, costs attributable to public or private school activities during <br />standard school hours are not considered. Expenses incurred for supervised activities <br />after school or during school holidays (e.g., summer day camp, after-school sports <br />league) are allowable forms of child care. <br />The costs of general housekeeping and personal services are not eligible. Likewise, child <br />care expenses paid to a family member who lives in the family’s unit are not eligible; <br />however, payments for child care to relatives who do not live in the unit are eligible. <br />If a child care provider also renders other services to a family or child care is used to <br />enable a family member to conduct activities that are not eligible for consideration, <br />SAHA will prorate the costs and allow only that portion of the expenses that is <br />attributable to child care for eligible activities. For example, if the care provider also <br />3-161