Childcare element of Working Tax Credit

Families paying for childcare may be able to get some of the costs back through Working Tax Credit (WTC), depending on their income.  This is called the childcare element of WTC. If you meet the conditions for the childcare element, it will be included in the calculation. This means it will take longer for your tax credits to be reduced by your income. 

The rules for the childcare element are:

• Childcare costs can be claimed for children until the week of 1^st September after they are 15, or 16 if they are blind or on Disability Living Allowance
• The childcare must be registered or approved and not provided by a close relative if it is being given in your own home. Most school-based childcare is also covered. The rules on what childcare counts are slightly different in England, Scotland, Wales and Northern Ireland – get advice if you are not sure, or check the Revenue leaflet WTC5 ‘Help with the costs of childcare’.
• If it is a one-parent household the parent must work 16 hours or more.  If there are two adults both must work 16 hours or more unless one is on certain benefits or national insurance credits for sickness or disability (for example, getting Disability Living Allowance), in hospital, in prison, or a carer entitled to Carer's Allowance.
• The maximum childcare costs taken into account are £175 a week for one child or £300 a week for more than one child.
• The maximum award is 70% of what you pay or 70% of the maximum childcare costs, whichever is lower. This means the most help you can get is £122.50 a week for one child or £210 for two or more children, but remember that you may get less than this because tax credits are reduced by your income.

If your childcare costs vary it may be better to give the Tax Credit Office an average figure, or if  you only pay childcare costs at certain times during the year, you can report these fixed dates to the Tax Credit Office.

There is lots more information about the childcare element on the Revenue website.