I've heard mixed things about this. Some people I know claim childcare expenses (my son is in daycare three days per week) on their tax returns (California) when their partner does not work. The IRS states this is so the partner can work or look for work.

http://taxes.about.com/gi/o.htm?zi=1...503/index.html

Thoughts?

The tests show the below, which we meet, however both parents do not work.

* Your child or dependent must meet certain qualifications,
* Your daycare provider must meet certain qualifications,
* You must have earned income,
* The care provided must enable you to work or to look for work, and
* You must reduce your eligible daycare expenses by any amounts provided by a dependent care benefits plan through your employer.

I was told we couldn't deduct unless we were both working.

You've got to be looking for work, so if your applying for jobs, you'd be eligible is how I'd read it, but sounds like you also must have some income, so probably need one parent to be working even if part time?

Well one parent works (me) but my wife does not. I guess its how closely defined / audited the "looking for work" part for her is.

Seems pretty clear you can't claim regardless of how "looking for work" is defined. In the link you provided to the IRS document, I found this:

and then

You could file married filing separately however, but you may be worse off with only one income.

Thanks for the replies. My tax refund is looking smaller by the minute