If you are a parent and have to work, there is a good chance that you will have to pay for your child’s care during work hours. This can be quite expensive, but thankfully there is a tax credit which can help to compensate for the cost of childcare. The is the Child and Dependent Care Credit available to working parents who pay for child care. The IRS lists the following ten credit facts, which you must know to make full use of:
If you pay someone in the last tax year to look after your child, dependent adult or disabled spouse, you may qualify. You have to prove that the care was necessary to obtain work or that you were scheduled to work for hours. This also applies to your spouse if you file together. To qualify, a dependent must be a child under the age of 13 or a spouse or adult dependent who is unable to take care of himself, whether mentally or physically. In addition, they have resided in your home for more than half a year. While there are special rules for disabled spouses or students, you must earn income to qualify if you file with your spouse. If you have a single file, you’ll need wage proof. You can not claim expenses you paid for a child’s car to your spouse, a child under the age of 19 (even if the child is not your dependent), or to the parent of a qualifying person or dependent.
The tax credit can compensate for up to 35% of the cost of care and depends on your total income. The threshold is $ 3,000 per person and up to $ 6,000 per person for two or more dependents. If you receive benefits from an employer for dependent care, there are additional rules. For more information, see Form 2441, Child and Dependent Care Expenses. You must provide the social security number of the person qualifying for the loan. You will also have to provide the name, address and telephone number of the company or person who cared for the credit. A social security number is usually sufficient for an individual or a company’s identification number for an employer. In addition to your tax return, you will need to submit Form 2441 to claim the credit.
