Paying for Care and Education
Financial aid and tax relief plans help families pay for child care.
The cost of care depends on several factors, including the child’s age, type of program, and program’s location.
There are several programs that can help make child care more affordable. These include the Child Care Assistance Program (CCAP), Early Learning Scholarships, and credits and deductions on your income tax.
You can call 888.291.9811 for help finding the right resources. Or, you can use Bridge to Benefit’s free financial aid screening tool to see if you might be eligible for help. Free help filing your tax return is also available in many communities. You can use the Paying for Child Care Checklist as a financial aid guide.
Financial Aid Programs
Child Care Assistance Program (CCAP)
Families may be eligible to receive CCAP benefits if:
- They have a low income. This includes families currently or recently in the Minnesota Family Investment Program (MFIP) and those who have never received cash assistance.
- They have children age 12 and younger or children with special needs who are ages 13 and 14 that need child care.
- They need help paying for child care to work, look for work, or attend school or training.
This program pays a portion of families’ child care costs to the family’s child care provider. Families must use a legal provider. There may be a waiting list for assistance in some counties for families that haven’t recently received cash assistance.
Families can apply for child care assistance at their tribal or county human services office. Once they apply for CCAP, a child care worker will determine their eligibility and help them understand the program.
For more information about the Child Care Assistance Program, visit the Minnesota Department of Human Services
Early Learning Scholarships
For families meeting income eligibility requirements and who have a child between the ages of 3 and 4 – and in some cases children younger than 3 – who choose a program with a Parent Aware Rating or one that will earn a Rating within six months.
Starting July 1, 2020, Early Learning Scholarships can only be used at programs with a Parent Aware Three- or Four-Star Rating.
Available statewide, scholarships help families afford high-quality child care and early education programs. Families can receive up to $7,500 per scholarship annually when parents choose a qualifying program.
For more information call Parent Aware at 888.291.9811, contact your local scholarship administrator, or visit the Early Learning Scholarships page on the Minnesota Department of Education website.
Families with a parent or guardian on active duty in the National Guard or the Army Reserve. To be eligible, families must receive Child Care Assistance and must not live on or near a military base.
Additional financial aid from the U.S. Army for families in the Child Care Assistance Program.
After families are approved for the Child Care Assistance Program, they can call Child Care Aware of America at 800.424.2246 or visit the Army Fee Assistance website for more information about this option.
Minnesota Postsecondary Child Care Grant Program
Students with low incomes who have young children in child care while they attend postsecondary classes.
Grants for part-time or full-time student parents continuing their education after high school.
Families complete the Free Application for Federal Student Aid (FAFSA) and a separate application for this program. More information is available on the Minnesota Office of Higher Education and the college’s financial aid office.
Usually low-income families.
Child care programs, local United Way or community organizations sometimes offer help paying for child care.
Child care programs often know about financial aid opportunities in their areas.
Tax Relief Plans and Credits
Dependent Care Assistance Plan (DCAP)
Family members whose employers offer a Dependent Care Assistance Plan. This plan is sometimes called a Flexible Spending Account or a Pre-Tax Dollars Account.
Families estimate how much they will pay for child care in the coming year. The employer sets aside that amount from their paychecks to pay for child care. That amount is not subject to income tax.
Family members ask their employers’ human resources departments if they offer a Dependent Care Assistance Plan and how to enroll.
Child and Dependent Care Credit
Families who pay child care expenses and qualify for the federal child and dependent care credit. Families must have earned income for the year. Even families that don’t pay any taxes may qualify for a refund of the state credit, but they must file tax returns.
The Child and Dependent Care Credit is both a federal and state credit that is available if filers paid for someone to care for their child or other household services. The care or services must be needed in order for them to work or look for work. Taxpayers earning less than $64,230 with one qualifying person or $76,230 with two or more qualifying persons are generally eligible for these credits.
Families apply for tax credits on their annual Minnesota and Federal tax returns. The credits reduce the amount of tax owed. The Minnesota credit may also increase the amount of a refund, depending on the family’s situation. For more information, visit the Minnesota Department of Revenue’s Child Care and Dependent Care Credit page or call 800.652.9094.
Federal Earn Income Credit and the Minnesota Working Family Credit
Families that file Minnesota and Federal tax returns. Even families that don’t pay any taxes may qualify, but they must file tax returns.
The Earned Income Credit is a special credit for working families with low incomes that reduces the amount of federal tax that they owe, if they owe any tax. The credit is subtracted from the amount of tax owed, so families pay less tax or get money back from the government. Families must meet certain eligibility requirements to claim the credit. Taxpayers who qualify for the federal Earned Income Credit also qualify for the Minnesota Working Family Credit. Taxpayers earning up to $41,500 ($47,300 if married) with one child, $47,600 ($53,500 if married) with two children, or $51,200 ($57,000 if married) with three or more children are generally eligible for these credits.
Families apply for tax credits on their annual Minnesota and Federal tax returns. The credits reduce the amount of tax owed or increase the amount of a refund, depending on the family’s situation. For more information, visit the Minnesota Department of Revenue’s Working Family Credit page or call 800.652.9094.
Minnesota Renters and Homeowners Refunds
Minnesota renters and homeowners’ property tax refunds provide tax relief to homeowners and renters whose property tax or rent is relatively high compared to their household income.
For more information on state refunds, and to see if you qualify, call 800.652.9094 or visit the Minnesota Department of Revenue website.
Tax Filing Assistance
From February 1 through April 15, trained volunteers are available at sites around Minnesota to help families with their tax preparation. For more information and to see if you qualify for help, call 800.657.3989 or visit the Minnesota Department of Revenue’s Free Tax Preparation Help page.