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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.


The cost of care can be a significant barrier for families searching for quality programs for their child. Fortunately, there are several financial aid programs and tax relief plans that can help make high-quality care more affordable. You can call Parent Aware at 888.291.9811 for assistance in finding the right resources.

You can also check out this free Financial Aid Screening Tool from Bridge to Benefits to see if you may be eligible for for child care assistance and other economic support programs. This tool is only a guideline and does not determine eligibility.

By planning, you can improve your chances of finding a quality program at a cost you can afford. You may use the Paying for Child Care Checklist as a financial aid guide.


Financial Aid Programs

Child Care Assistance Program (CCAP)

Who
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.

What
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 famiies that haven’t recently received cash assistance.

How
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

Who
For families meeting income eligibility requirements and having 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 active in a Full-Rating cohort.

Starting July 1, 2020, Early Learning Scholarships – Pathway I can only be used at programs with a Three- or Four-Star Rating.

What
Available statewide, scholarships help families afford high-quality child care and early education programs. Families can receive up to $7,500 per scholarship when parents choose a qualifying program.

How
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.


U.S. Army

Who
Families with a parent or guardian on active duty in the National Guard or the Army Reserve. To be eligible, families must receive CCAP and must not live on or near a military base.

What
Additional financial aid from the U.S. Army for families in the Child Care Assistance Program.

How
After families are approved for CCAP, they can call Parent Aware at 800.424.2246 or visit the Army Fee Assistance website for more information about this option.


Minnesota Postsecondary Child Care Grant Program

Who
Students with low incomes who have young children in child care while they attend postsecondary classes.

What
Grants for part-time or full-time student parents continuing their education after high school.

How
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.


Local Scholarships

Who
Usually low-income families.

What
Child care programs, local United Way or community organizations sometimes offer help paying for child care.

How
Child care programs often know about financial aid opportunities in their areas.

 

Tax Relief Plans and Credits


Dependent Care Assistance Plan (DCAP)

Who
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.

What
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.

How
Family members ask their employers’ human resources departments if they offer a Dependent Care Assistance Plan and how to enroll.


Federal Earn Income Credit and the Minnesota Working Family Credit

Who
Families that file Minnesota and Federal tax returns. Even families that don’t pay any taxes may qualify, but they must file tax returns.

What
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 with children earning up to $40,000, or $45,000 if they have two or more children, are generally eligible for these credits.

How
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.

 

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 651.296.4444 or visit revenue.state.mn.us.

 

Tax Filing Assistance
Between February 1 and 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 651.296.3781.

Paying for Care and Education

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