Deduction for Gifts

[Maggie]

Does anyone know if the deduction is still $25 per child/parent per year?

[TomCopeland]

Gifts

Does anyone know if the deduction is still $25 per child/parent per year?

You can't deduct more than $25 per person to the parents of the children in your care. If you give items to the children in your care, you need to determine if what you gave was a "gift" or an "activity expense."

If your wrapped a present for a child and the child took it home and opened it and never returned with it to your program, this is a gift and is subject to the $25 rule.

If you have a present to a child that was only used by the child (clothing, gift card), then this is also subject to the $25 rule.

However, if you gave an item to a child (happy birthday) and the child opened the present and played with it with the other children (even if only once) then this is an activity expense and is not subject to the $25 rule.

Here's an article I wrote about this: http://www.tomcopelandblog.com/2010/...ing-gifts.html

[Maggie]

Thank you very much.

[krosey5]

You can't deduct more than $25 per person to the parents of the children in your care. If you give items to the children in your care, you need to determine if what you gave was a "gift" or an "activity expense."

If your wrapped a present for a child and the child took it home and opened it and never returned with it to your program, this is a gift and is subject to the $25 rule.

If you have a present to a child that was only used by the child (clothing, gift card), then this is also subject to the $25 rule.

However, if you gave an item to a child (happy birthday) and the child opened the present and played with it with the other children (even if only once) then this is an activity expense and is not subject to the $25 rule.

Here's an article I wrote about this: http://www.tomcopelandblog.com/2010/...ing-gifts.html

Wonderful information! Thank you