Childcare tax deductions

Whoops, just found I already have the announcement.

will introduce a new tax deduction for pre-school childcare costs, with the deducation taking effect on 1 April 2006, and will cost around$160 million per year.

Several of my friends (who seem to all beccoming mums) have said childcare costs is a huge barrier to being able to not have too long a break from the workforce.

National is effectively saying that childcare costs will be treated as a legitimate work expense for second-income earners who would otherwise be engaged in childcare, and for employed sole parents. Up to $5,000 per child will be claimable off tax – a net reduction in tax of $1,650 per kid.

Just found the official release which is here. Also has links to some FAQs.

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