We have had several questions regarding the Child Care Tax Credit and whether or how Settlyd includes this in the computation of child support. 

First, know that there are two child care tax credits available to parents.  First, there is the South Carolina Child and Dependent Care Credit available to qualifying taxpayers. 

Second, there is the Federal Child and Dependent Care Tax Credit.  There is no applicability for this credit to be considered under the South Carolina guidelines.

The South Carolina Child Support Guidelines provide the math to account for both tax credits in paragraph 3(A)14 of the written regulation.  Settlyd has incorporated this math into our child support calculation.

By default, Settlyd strictly follows the math in paragraph 3(A)(14) which accounts for both state and federal child care costs.

However, the guidelines caution as follows:

 While (the math) will hold true in most cases, judges can always review child care costs with the actual credit method, below. The maximum amounts for the tax credits that can be subtracted from actual or allowed day care are based on the maximum qualifying childcare expense according to federal and state tax code. The other method would be to take the actual costs and subtract the actual value of the federal and state tax credit such as determined by the last filed IRS Form 2441 and SC 1040, Line 11. This adjusted amount would then be entered on line 6.c.

As well, this approach is not applicable to all child support cases simply because daycare is being paid. Keep in mind the South Carolina guidelines set out threshold income levels based on the number of children supported in a specific calculation. Once an applicable threshold is met, then the forgoing will be applicable.

We hope this helps!

Guy and Sean