Tax deductions for third-party childcare costs

In order to treat working parents equally for tax purposes, the deduction for third-party childcare costs for direct federal tax and in many cantons has been adjusted from 2023/2024. The aim is fairer taxation based on economic performance.

Who can use the deduction? Married, unmarried couples and single parents can deduct childcare costs from their income as long as the children under 14 live in the same household. The childcare costs must be related to employment, education or incapacity to work – leisure care (e.g. babysitting) is not deductible.

The deductible costs must be verifiable, e.g. daycare centre, childminder or nanny. The maximum amount for direct federal tax was increased from CHF 10’100 to CHF 25’000 per child in 2023 and adjusted to CHF 25’500 from 2024. The maximum amounts vary from canton to canton. Parents with a high workload will benefit in particular in order to incentivise employment.