Yes, the service fee for locating a nanny is an IRS Child and Dependent Care expense.
Per 2016 Publication 503 - IRS.gov page 7, Fees and deposits. Fees you paid to an agency to get
the services of a care provider, deposits you paid to an
agency or preschool, application fees, and other indirect
expenses are work-related expenses if you have to pay
them to get care, even though they aren't directly for care.
However, a forfeited deposit isn't for the care of a qualifying
person if care isn't provided.
Example 1. You paid a fee to an agency to get the
services of the nanny who cares for your 2-year-old
daughter while you work. The fee you paid is a work-related
expense.
Example 2. You placed a deposit with a preschool to
reserve a place for your 3-year-old child. You later sent
your child to a different preschool and forfeited the deposit.
The forfeited deposit isn't for care and therefore not
a work-related expense.
To enter your Dependent and Care expenses:
- Sign into your account and open your return by clicking the orange Take me to my return button.
- Then, search for this exact phrase in the upper right corner: child care credit (if necessary, copy/paste from here). In your search results, click the "Jump to" link and we'll take you right there.
