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Military Finances 301: DoD's Child Care in Your Home Program Thumbnail

Military Finances 301: DoD's Child Care in Your Home Program

Military Pay and Benefits Managing Your Finances

The other day I had a client ask me about the tax ramifications of the DoD’s Child Care in Your Home (CCYH...yet another acronym) program. To be honest, I hadn’t heard of it. So, I decided to check it out and do some research. Here is what I learned.

What is the DoD’s Child Care in Your Home Program?

The CCYH is a pilot program to provide financial assistance to military families that have/need full-time (30 – 60 hours per week) childcare in their home. The program is only available in certain areas and has limited capacity. It is specifically designed to support families with nontraditional work hours (nights, rotating schedules).

Who is Eligible for CCYH?

You need to have a child (I know that is obvious) that lives with you and is at least 6 weeks old until the child enters Kindergarten. A school-age child may be enrolled if a brother or sister is eligible and enrolled in full time care.

Members of all military services are eligible if they meet the following criteria:

  • Single/Dual active duty or Guard/Reserve on active duty parent(s)
  • Active duty or Guard/Reserve on active duty with a spouse who works full time, OR
  • Is enrolled full time in a postsecondary educational institution, OR
  • Works part time while enrolled part time in a postsecondary educational institution

The servicemember must be stationed in one of the following areas: Alaska; Colorado Springs, CO; Fayetteville, NC; Fort Walton Beach, FL; Hawaii; Jacksonville/Mayport, FL; Las Vegas, NV; National Capital Region; Norfolk, VA; San Antonio, TX; San Diego, CA; Seattle/Tacoma, WA.

How Much Assistance will I Receive under CCYH?

This one is complicated. It will depend on the following:

  • Your income. You will establish with DoD your Total Family Income (TFI) and TFI category. The more income you have, the more you will pay. You can see the TFI categories and the amount you’ll pay here.
  • How much your provider charges. The DoD sets a cap in each region. If your provider charges more than the cap, that amount is on you and the DoD will pay you the amount between your parent fee (based on your TFI category) and the cap. If the provider charges less than the cap, then the DoD pays the difference between the actual fee and the parent fee.

It is important to note that you will not receive assistance with taxes like the employer portion of Social Security and Medicare (7.65% of salary) and unemployment insurance.

How do I Sign Up for CCYH?

You start by setting up an account on the CCYH website. If you’re stationed in an eligible region and you met the eligibility criteria, CCYH will appear as a childcare option for you.

Will I Pay Taxes on the Assistance I Receive?

CCYH is not an allowance, so it is considered earned income for federal (and potentially state) tax purposes. It is also subject to Social Security and Medicare tax. It is unclear to me if DFAS will withhold income taxes on the assistance. I’d check my LES after payments start to make sure one way or the other.

Military Finances are Different

I’m not aware of an equivalent program like CCYH available to civilians. That isn’t the only way your military finances are different than a civilian’s. That is why we think Active and Retired Military Officers and NCOs should work with a financial advisor or planner that deals with your unique issues each and every day. If you’d like to find out how we work with clients just like you, use the link below to schedule a free, initial consultation.

If you found this article useful, you might like the following blog posts:

New Tax Law, New Rules for Military Spouses


Tax Relief for Children Receiving SBP Payments


Should You Sell Back Leave or Take Terminal?





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