Deductions & credits

You can include that area of the house that is used regularly for Daycare but not exclusively.  

But you have to meet these requirements:

If you use space in your home on a regular basis for providing daycare, you may be able to claim a deduction for that part of your home even if you use the same space for nonbusiness purposes. To qualify for this exception to the exclusive use rule, you must meet both of the following requirements.

 • You must be in the trade or business of providing daycare for children, persons age 65 or older, or persons who are physically or mentally unable to care for themselves. 

• You must have applied for, been granted, or be exempt from having a license, certification, registration, or approval as a daycare center or as a family or group daycare home under state law. You do not meet this requirement if your application was rejected or your license or other authorization was revoked.

To find the percentage of time you actually use your home for business, compare the total time used for business to the total time that part of your home can be used for all purposes. You can compare the hours of business use in a week with the number of hours in a week (168). Or, you can compare the hours of business use for the year with the number of hours in the year (8,760 in 2022). If you started or stopped using your home for daycare in 2022, you must prorate the number of hours based on the number of days the home was available for daycare. 

If you qualify, you would have to enter two home offices in TurboTax. One home office is the area that is used exclusively for business and the other home office will be the portion that is only used regularly but not exclusively.

1. Sign in TurboTax online.
2. Wages & Income > Self-employment income and expenses > Edit/review
3. On the screen, “Your 2022 self-employment work summary’,” Edit/review > Daycare 
4. Continue entering your income and expenses.
5. On the screen, “Home office summary,” > Edit
6. Then click on "add another home office" to add the area of the house info for the section used regularly but not exclusively.

Once you have figured out the percentage of use for the area that is not exclusively used for business you can proceed to enter the 2nd home office. This is how you will answer this question:

Continue through the program to enter the info on the second portion of the home office.

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